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By: Heidi White

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October 19th, 2017

Psychology: What You Need to Know When Buying a House

Homebuying and Mortgages

I am a passionate person, so I often have to rein in my emotions when making important decisions like buying a house. But you don’t have to be an overly intense person for your decisions to be influenced by emotion. In fact, it has long been known that emotions are the primary drivers behind human decision-making. Though our emotions can help us make quicker decisions based on past experiences, they can also get in the way of good decision-making by allowing us to sidestep our more analytic nature.

I’ll be honest, I’m writing about this topic because I am currently hours away from signing on a new home that I fell in love with within moments of walking through the front door.  Did my instant infatuation with the place lead me to purchase a home that was a poor fit? I certainly hope not, but I can certainly understand how someone in the same headspace could ignore significant issues. To help you use your brain as well as your heart when you purchase your next home,Tweet: use your brain as well as your heart when you purchase your next home. https://ctt.ec/98bWm+ I’ve compiled a list of the issues you can run into when you become emotionally attached to a house, and what you can do to bring your head into the equation.


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Negotiations Are Weakened

Now that I’m safely down to the last day of my purchase, I can admit to myself that falling in love with the house limited my ability to negotiate. I couldn’t even pretend that I was going to stick to my guns if they asked for more. I wanted the house and I’d have paid more if they asked. My initial offer was fairly high, largely because I was afraid of alienating the sellers. Had I been less emotionally involved, I would have been more likely to test the boundaries and may have saved myself a couple thousand dollars.

How do you force yourself to see your potential for negotiations?

The best way to bypass your emotional brain when considering negotiations (something I shoulda, coulda, woulda done) is to do the math on paper. What is the suggested price? Research other homes in the area. Is the suggested price consistent with the value you see in the house and with the value of other homes in the area? What will you likely have to put into repairs or upgrades in order to make the house comfortable for your needs? Do your research and write down all the facts. They’re much more difficult to ignore when they’re on paper.


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The Blinders Are On

My new house is elderly (born in 1893), located on a steep road, with some insulation issues. These are things I knew at the beginning and overlooked because I was looking for a home within a certain price point and I knew I’d have to make some compromises. This type of oversight is okay because it was conscious, but where I found myself putting the blinders on was when the inspector came through the house and started pointing out weak points. I heard him mention them but found myself downplaying the negatives and adding the positives to a long list of reasons the house was amazing. Fortunately, nothing came up that was outside of my comfort zone, but the inspection is a tricky time for the buyer, who has already put some financial skin in the game. This is where many people can get into trouble, moving forward with a sale, despite mounting bad news.

How do you take the blinders off?

To rip off the blinders, you can bring along a friend who you trust to be unbiased and honest. Write down everything you see and everything your friend mentions. When the inspector comes, listen carefully and ask questions when you don’t fully understand something. The inspector will write up a report as well, but you will understand the report more completely if you get your questions out of the way during the inspection.

 

Keep a careful list of everything that must get done, that should get done, and that you’d just like to accomplish. Then prioritize the list so that you know which things the buyer really needs to do to make the place move-in ready and the things you feel comfortable doing on your own or paying for. Write down an estimated cost for everything on the list, so that you know what you’ll have to spend after the purchase to bring the place up to your standards. After you’ve got it all on paper, sit down and have an honest discussion with your spouse or friend to discuss the pros and cons. Open, honest discussion can help you not only see the truth but also become comfortable with it.


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It’s Easy to Forget Location Efficiency

Location efficiency refers to the amount of time/effort it takes to get to the places you spend the most time in. For example, when I lived fifty minutes away from my job, my location efficiency was horrible. The nearly-two-hour roundtrip commute was killing me. I was exhausted all the time and stressed out. The house I’m purchasing today is fifteen minutes from work and about forty minutes from my friends. It was a compromise, but well worth it because I’m closer to the location I travel to daily.

How can you determine the most location-efficient spot?

Location efficiency is a tricky subject because you want to live in a town you like while being closer to the places you travel to frequently and close enough to places you need to travel to occasionally. It is usually a compromise, so the easiest way to calculate this equation is to assess the cost of your daily commute, financially and environmentally, and determine how much you can afford in both of those areas. Then take out a map and mark the towns where you visit frequently in one color and visit less frequently in another color or other colors. Finally, draw a circle showing the boundaries of the area where you could comfortably live while remaining within a reasonable distance from your frequently-visited locations. Is your new house inside this circle? If not, you may want to rethink the purchase.

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Lifestyle Needs Can Go Out the Window

I am a single mother of a college student. In other words, I live on a budget and am more likely to thrive in an area with social opportunities. When I set out to buy a home, I knew I wanted something I could afford to pay off while also helping my daughter get through college. I also wanted a place that was in an area that met my social and athletic needs, was within proximity to work, and felt like home. My needs were specific and if the home I finally decided on didn’t meet one of those needs, I’d have been uncomfortable, financially or socially. Your lifestyle is just as specific and important, so make sure you are moving to a home and a town that will support the activities and interests that are most necessary for your wellbeing.

 

How can you stay true to your original goals?

To stay true to your goals for a new home, write them down and keep them front and center. What are the activities and interests that define you and feed your soul? What type of home would best fit your lifestyle? Do you need a lot of space? Do you prefer small spaces? Do you need a workout room or a studio? What kind of community would you thrive in? Does the area you’re considering moving to offer social opportunities that align with your needs? As you choose new homes to look at, refer to your list and make sure your choices are in line with your goals.

 

If you're shopping for a new home, getting pre-approved is one of the first steps.

Get Pre-Approved Today

 

About Heidi White

Heidi White is the content and communications specialist at VSECU. She is responsible for communicating information and ideas through the written word for the credit union’s internal and external audiences. Her passion is helping people live more joyful lives through timely, useful, and compelling content. Heidi lives in Barre, Vermont.

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