It goes without saying that buying a house is going to be one of the biggest financial decisions you will ever make (and one you will only make two or three times in a lifetime).
Most people like to think they are acting from a rational and logical standpoint when making a significant decision like buying real estate, but the truth is they are not. Our emotions play a much bigger role than we think or would like to admit.
Harvard Business School professor Gerald Zaltman says that 95% of our purchase decisions take place subconsciously.
Neuroscience Behind Decision-Making
There has been a long ongoing debate between the rational vs the emotional as being in opposition to one another. Even some of the greatest philosophers like Plato, Descartes or Kant pleaded that in order to come a rational conclusion, emotions must be kept out.
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Researchers are now starting to discover that you cannot make an effective decision without the emotional input. Antonio Damasio was one of the first neuroscientists to prove that emotions don’t impede rational thoughts but underpin them.
His case study involved a patient called “Elliot” who had a small tumour cut from his cortex near the brain’s frontal lobe. Before the surgery, he had been a model father and husband, holding down an important management job. After the surgery, Elliot’s intelligence remained the same, but his ability to feel emotions was completely removed, turning him into a ‘real life Mr Spock’.
At that time, neuroscience assumed that human emotions were irrational, therefore a person without emotions should be able to make better decisions. However, cut off from his feelings, Elliot was incapable of making any decisions at all. The most banal decisions became impossible, sending his life crumbling down, causing him to lose his job and marriage in the process.
Making decisions based on emotions is neither irrational nor irresponsible. In fact, psychologists and behavioural economists have demonstrated that our subconscious thoughts have a logic of their own, communicating their decision to the conscious mind through emotion. The conscious mind then searches for logical reasons to justify making this decision and the circle is complete.
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Conclusion: People make decisions emotionally and justify them rationally.
How Does All This Apply to Real Estate?
In the past, most Real Estate Agents’ default used to be to market exclusively to Mr. Logical with facts and figures. Location, price, or resale value of the home are all reasonable factors to consider, but they are not what seals the deal. Emotional connection is.
In 2013, the Commonwealth Bank of Australia conducted a survey of Australian buyers and found that 44% paid more for a property just because ‘they really liked it’.
This is when some Agents started to recognise the importance of selling to Mr. Emotional, not just Mr. Logical. And although there are many ways to make a house more ‘likeable’, nothing trumps giving the home some personality with professional home-staging.
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How does Home-Staging appeal to buyer’s emotions?
This is a topic lengthy enough to be covered in a separate article (soon to be published), but to give you an idea, here are some ways how styling a property for sale can influence people’s feelings:
- First impressions count
- Clearing the space for imagination
- Selling a lifestyle
- Psychology of colours
- Details matter
- Creating a multi-sensory experience
- Pulling at people’s heartstrings
- Creating illusions of more light & space
- Perceived value
Read “7 Benefits of Home-Staging“.
Read the story behind the sale of this home HERE. ($110k difference!)
Thanks for reading!
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