Real Estate From The Head & The Heart
13 Jul 2022, Lynette McFadden
Be it emotional or analytical, much is made of the reasons people transact real estate.
When purchasing or deciding to purchase there is often robust debate about the rationale for someone’s decisions. The parties involved can be vendors, buyers, real estate consultants, lawyers, valuers, building inspectors and can now include digital valuation systems.
Everyone wants to play a part, as well as have a say, and it’s a crowded and often confusing space.
If it’s an investment property, there’s often a predetermined strategy based on the financial benefits or otherwise of the purchase, and this can be seen in a ‘dollars and cents’, ‘return versus costs’ framework.
People usually know the rules.
If they spend too much on the purchase or during renovation and they don’t sell for a certain amount, then the end result will often be disappointment. You see this particular scenario played out most weeks, however the market we have enjoyed over the past 18 months saw the reverse of this: astronomical figures achieved regardless of the initial cost of the property and subsequent investment.
But not everything is analytical. In fact, some of the biggest motivations for people to buy or sell are deeply emotional and might make sense only to them.
Examples I’ve noted over the years have included the purchase of neighboring properties.
The disparaging ‘nosey neighbor’ label gets bandied about more than I care for, but I’ve seen significant prices paid by neighbors who wanted to protect boundaries or views, or wanted other family members to live close by. They believed in the value of the location and in some cases had waited patiently for the opportunity. Owners that chose to sell at auction often achieved wonderful premiums because of this.
Another emotional factor I’ve witnessed is the acrimonious split, where you see two common scenarios: the ‘I don’t care because I’m off to a better life’ and the ‘I’ll fight you every step of the way because I feel betrayed and belittled’.
The skill required to navigate these situations with care and professionalism isn’t the domain of everyone and I’d always suggest doing significant due diligence to find a professional who has the skill to look after all parties whilst delivering the best result, because there may be an emotional minefield ahead.
And before you think it can’t be done, it can; I’ve seen it.
But for me, perhaps the most emotional of all sales transactions are the ones involving couples who – having lived long and wonderful lives together – must sell to move into supportive care.
You walk through properties full of nostalgic memories, photos, books, furniture, mementoes and ‘stuff’. The stuff of life and you realize on their behalf how hard it is.
That’s when emotion really comes to the fore. In one example that comes to mind, I had the enormous privilege of meeting a couple that had lived a full and valued life, but it was time to move.
They worry, have they left it too late? And (this is common) I worry that we have a deadline hanging over us requiring a sale by a certain date so they can move to the residential village.
Their friends worry about auctioning, which we believed was the best process due to the deadlines just mentioned – and the nature of their property – and their family worry about all the things families lose sleep over when they have elderly parents.
Economics are important, of course, but the emotional factors in all of this are much more important.
So why share this?
It could be that I want our elderly clients to move safely and with dignity to their new home.
It could be because my own parents are now at that age and although they tell me in no uncertain terms that they are never moving, I worry every winter.
Or it could be that no matter what any of us think, people will make their own decisions. It might be purely financially driven or it might be deeply emotional. It’s important to find out which it is before you wade in. And for real estate professionals working in this space, know what’s best, do that and more, and remember that life is a mixture of facts and feelings.