Why People Buy Homes – Biases?

Are There Biases in Home Buying?

A 5 Part Series
1: The Emotions of Buying a Home
2. Home-Buying Fears and Anxieties
3: Are There Biases in Home Buying?
4: Identity and Connection in Real Estate
5: Satisfaction in Real Estate

3: Why People Buy Homes: Are There Biases in Home Buying?

Understanding an individual's construction of reality, or biases, is crucial for Licensees looking to assist their clients with effectively navigating the home-buying process. Cognitive biases are inherent thinking patterns that can affect decision-making. They can play a significant role in how home-buyers perceive properties and determine their value.

One common bias is the **anchoring effect**. This occurs when buyers fixate on the initial price of a property, which can skew their perception of value. If a home is listed at a high price, potential buyers might view it as more valuable, or conversely, if they see a lower price, they may assume it is less desirable. Licensees can use this knowledge to discuss prices and strategies, and thus helping buyers' to adjust their perceptions and decisions.

Another relevant bias is **confirmation bias**, which leads buyers to search for information that aligns with their pre-existing beliefs. If buyers have a favorable impression of a property, they may dismiss any negative information they receive. To help with this, Licensees should provide balanced information, and encourage clients to consider both the positives and the negatives.

Lastly, the concept of **social proof** is crucial in the market. Buyers often rely on the experiences and opinions of others to make decisions. Positive testimonials, reviews, and recommendations from previous clients can bolster a buyer’s confidence, making them more likely to engage with a Licensee.

By understanding these biases, Licensees can adjust their own approach to help buyers more clearly match their own interests and wishes to help them make well-rounded choices. Utilizing this knowledge can lead to successful transactions for their clients and can foster trust in a Licensees' knowledge of the market, properties, and the process.

One example that often comes up for me is when clients exclude parts of town for some reason. Sometimes I know they'll like a particular house but it is outside their preferred area. My method is to suggest they look at it as a reference for me to be able to more clearly focus on their wish list. As I travel to the location, I point out the benefits of the area and some reasons they might want adjust the exclusion. Often their comment afterward is, "Thank you, we hadn't seen this area, and we'll keep it in mind." And sometimes their comment is, "This is why we don't like this area." Either way, It helps us both - me with learning more, and them with opening up or solidifying their ideas.

A good licensee tries to get in the head and ideas of their client to learn how and why they are buying. When the licensee can look with the clients eyes, great things happen.

*Next Article Preview: Explore how individuality and personal connection enhance the home-buying experience and the importance of delivering a personalized touch.*

---

A 5 Part Series
1: The Emotions of Buying a Home
2. Home-Buying Fears and Anxieties
3: Are There Biases in Home Buying?
4: Identity and Connection in Real Estate
5: Satisfaction in Real Estate

Best, Heath