Top 5 Emotional Barriers in SELLING & BUYING Real Estate

We can’t blame you. Real estate is something that you usually fall in love with. It’s an emotional decision and it’s also a highly logical one. Of course while we can’t avoid talking about emotions when you’re purchasing real estate because it’s such a big purchase, it’s also an investment that you have to take care of.

As in investment, we have to deal with the numbers, logic, and common sense so that we will be able to make you more profit upon selling of the property. But being human, we are also sometimes prone to emotions, and we have to be able to spot these potholes so that we won’t get into them once we enter a real estate transaction.

Today we’re going to talk about some of the TOP FIVE EMOTIONAL BARRIERS that keep one person from experiencing the true high returns of his real estate asset.

Top 5 on the list is falling in love with the property and overspending on all of the improvements. We do know that you love the home or the condo but sometimes you have to keep in mind the fair market value of the property. We’ve discussed more on the fair market value of the property in one of our previous articles, but sometimes overspending on improvements can also have a negative effect. There are also exceptional cases where the property’s improvements add more value to the property, but we’ll talk about that at another time.

For this particular discussion we’ll limit ourselves to unnecessary improvements that are overly spent on the house or some homes that we’ve seen here in the Philippines, they’ve had 3 coats of wallpapers, and they’ve changed the flooring too often unnecessarily.

There are so many ways that this can go haywire. When we’re talking about spending, it’s the easiest thing to do for a person, most especially if it’s something you love right? Another thing is that when you’re looking at improvements for your home these are also one of the high-priced things that you have to worry about such as flooring, interior design, countertops, and finishes.

Maybe the quick fix strategy for this is to plan it ahead. You have to know how you want it to look. You need to be able to finalize this ahead of time so you don’t have to keep on changing it depending on your mood because sometimes when somebody presents to you a new flooring, a new finishing, a new wall painting, a new wallpaper, you become emotionally attached to all of these things. You’d like to see it in your home and you end up accumulating a lot of expenses, and without you noticing it, you’re already way above the fair market value of the property.

If it’s all well planned, well designed, and it all comes together into one single functioning unit that’s elegant, neat in design, and well-functioning for the owner, then it might add a premium to the property, but if it’s just repetitive, it’s uncalled for, and it’s not really necessary, then it might pull the property’s value down, or if it’s just there, if it’s an unnecessary revision, and the cost have already gone up more than the fair market value, then that might drag your net profit down because you’ve overspent already.

The Top 4 emotional barrier that keeps you being poor in real estate transactions is being snooty with inquiries. What is snooty? Snooty according to Merriam Webster Dictionary means “Looking down the nose, showing disdain, characterized by snobbery.” So in short it’s simply called being a snob.

Sometimes when you’re handling inquiries you will get a lot of varied types of people, but that’s not a reason for you to snob them or look down at them. Sometimes when you’re trying to sell your property, and we’ve seen it also sometimes, when someone inquires about a property the conversation goes like this: “Hi, I’m looking for a property. I’d like to inquire about your property.” And then the other line goes: “I’m not available right now, can you call later?” You just lost an inquiry right there.

The inquiry is the gateway to the sale. So when you have an inquiry, you have to make sure that this is handled very well at the time that they are ready to listen because your buyer will also have other things to do, and this is just the only opportunity for them that they are ready to listen to what you have to say about the property. So it’s not the perfect time to exercise those ownership muscles, or pride of ownership, but sometimes when we have inquiries, and we’re selling our own property, we forget that we have to be catering it for them because they are the buyer and we are actually also serving them, we’re offering it to them.

So at the time that they need to see the house or they have to have few queries assisted, we have to be there for them and then assist them in the best way possible so that all of their concerns are well addressed.

The 3rd emotional barrier that keeps people poor in real estate transactions is over passionate selling. I know selling is overrated. But in your excitement to sell the property, sometimes when you meet the buyer, as soon as you shake their hand, you go and on about selling the property, the advantages, it’s near the clubhouse, it’s nice, it’s near the main road, all of these things, without you even thinking is this for you or for the buyer.

Are you actually talking about the advantages for him, or the advantages you think work for you. You have to remember that we are actually assisting them in this particular moment in time. You have to think how it will be an advantage to them more than selling them all of the advantages. Also this kind of selling technique creates distrust because you are just trying to sell the advantages and you’re not really listening to them. I think that’s the keyword: “Listen” to them. You have to listen to what their needs are, what’s important to them, and offer the property if it fits their needs. Don’t forget, the buyer is buying for his own reasons, so he wants to see some things that fit into his lifestyle. Look for something that is really fitting for his needs, and if your property fits then good.

Sometimes also another pitfall is (and this could serve as a corollary to this particular emotional barrier), that your assumed advantage might not be an advantage for the buyer. What do I mean by this?

Let me clarify.

Your house sits on the main road. It’s beautiful, it’s nice, you have the wide road, it’s easy access to the gate, that’s an advantage for you. But for your buyer, he doesn’t like that, because he wants to be on an arterial road because it’s more private, nobody really drives there except for his guests, relatives, and the neighbors, and it’s on the quieter side on the street.

Different people have different personalities, and you will always have to take this into consideration. You usually don’t exactly know what kind of person you’re talking to until you let them speak and until you listen to them, so I think the keyword here is to “Listen” to what their needs are and then really help them out. More than just selling and selling and not really minding what their needs are, that’s a huge “X” for me. What I would really rather do is serve more than sell.

The Top 2 barrier that keeps you being poor in real estate transactions is distrust in every single part of the system. I know your property belongs to one of the largest asset classes that you have in your portfolio, and it’s actually alright to be careful with the transactions and the dealings that you go through with this. Though that is understood, sometimes it is overly exercised by some people who just have no trust in every part of the system.

Distrust in every part of the system is not going to be useful for you in this particular case because what you simply have to do is look for the correct professionals that you could work with. How does this mess up the deal?

For example, you want to sell your property and you don’t want to give a title number, you don’t want to give an authority to sell, you don’t want to give the details, you don’t want to give even the address. The buyer has nothing to look at. But of course you don’t give these critical things to just anyone, you give it to a trusted, professional broker, or a real estate professional who’s going to be handling it for you. You need to have some level of trust because if you’re not going to be giving away the property details, how many bedrooms it is, the size, the price, and then when you already have an accepted offer you’re not going to give the title number for due diligence.

Such is not going to work. If you’re withholding all of this information back, there’s nothing going to happen in the transaction. You need to be able to trust the correct person who’s going to be doing this for you and then you also need to trust the buyer who’s going to be doing the purchase for you.

Of course that comes with a lot of caveats and a lot of reservations, but the bottom line is that you have to deal with the right person when you are doing your real estate transactions. Not trusting the system, the correct people, when you are listing the property, giving the details, doing the viewings, you’re actually shooting yourself in the foot because your buyers will not be able to have anything to see or to gauge. They wouldn’t know what they’re buying. I’ve seen it happen sometimes in the local setting and it’s just not going to work. We can’t have an offer first before a listing. It should be a listing first, it should be properly marketed, there should be enough information, then the documents have to be entrusted with a proper professional, and then afterwards marketed. These things are just procedural, but you need to have trust in the system. You can’t not trust anything at all. It’s a highly priced asset; it’s not going to work.

Finally the Top 1 problem that keeps people poor in real estate transactions is confusing personal value with price. As I mentioned earlier, it’s very easy to fall in love with the property. You see a house, you fall in love with it, you see the front yard, the back yard, the pool, the rooms are huge, the living area’s nice, double ceiling height, very clean, it’s so easy. Most especially it’s a very physical and tangible asset. You see it, you fall in love with it, you might even overspend on it as we mentioned in our top 5 emotional barriers. You make it look prettier for you. What you have to keep in mind is that come selling time for your property is that you cannot confuse the fair market value versus your emotional value of the property.

I know it’s a highly difficult situation because you love the property, you felt it, it’s the right property for you, come the time that you have to sell it you feel like you’re selling it for the highest possible price. Though we understand that, there are limits to what is acceptable to the market and not. We have to be a little bit levelheaded as far as this decision is concerned so that when we are out there in the market selling this particular property of yours, our price is not going to be unfounded and it’s going to be the highest one in the market, and it’s going to be difficult to justify to the buyers. This will just simply cause the other properties around the area to sell except yours. So we don’t want that to happen to you.

So when we’re talking about the personal value of your property please do not equate this with price because these are two very different things. Sometimes it’s also very easy to price your property depending on how you think your neighbor’s pricing the property because you’ve seen the high price but that’s a different house or property than yours. In the case of condominiums it’s actually easier said because you have a certain fair market value in the area compared to houses where the improvements are highly relative depending on the owner. When we are talking about pricing your home do not be overly emotional about it, keep your head in check, take a look at the fair market value and what sells, take a look at your home objectively, see the advantages and the disadvantages that you can offer to the market, and then you make a competitive pricing based on that.

And that’s it for today. I hope today’s discussion on these emotional pitfalls was able to give you an idea of what to avoid so that these things will not be a burden or a problem for you. I hope your real estate transactions become very smooth and that you don’t have any trouble selling your property or handling your property, and I hope you get the best rewards for the asset class that you’ve chosen to invest in.

Thank you and we look forward to seeing you again.