Mind over matter: Balancing emotions in property buys

Although homebuyers are increasingly knowledgeable, savvy and discerning, particularly with the influx of property information available as pre purchase references, there are still some who will ‘wake up’ after signing on the dotted line. The reasons were varied, ranging from reliance on a particular party such as the sales representative, the property showcased or temporal ignorance even if the home seeker had already considered a holistic set of issues and possibilities, but leaving out the most critical aspects which only came to his realization after a purchase.

Obsession is often a reason as well, where home seekers essentially are too captivated by what they see, wish to see, or in fact what they hope to hear. Property buying aside, in daily circumstances, the motivation or the desire is often developed before one’s purchase and in many cases, one has already conceptualized what he wish to buy. If he listened about the reasons for buying the item which map his strongest objectives, there is a stronger case to purchase, notwithstanding some important aspects like budget constraints and the potential of the item may not be significant.

There are some who attribute it to sales talk and psychological manipulation, but this could be a case of weaker will power, such that one becomes remorseful after his property purchase. There are some who are have not suffered such cases but are highly wary, including from related ones like friends who shared such experiences. There is thus a need to recognize the possibility of obsession in one’s property search, particularly as today’s context has so many diverse housing products offering differentiated, or even untested potential. But there are always potential returns for the risk buyers, so what is ‘an acceptable level of obsession’ and what is driven by pure emotions?

Indeed psychological manipulation?
While there are likelihoods one can be psychologically manipulated in a purchase, there are often cases where the buyer willingly allow to be psychologically manipulated. A sharp home seeker, or at least one who is rational, should know that buying a property has to fit into his budget requirements unless there is seemingly growth potential of the property arising from its inherent characteristics such as location and upcoming infrastructural and neighbourhood enhancements. Even that so, the buyer should understand that improved connectivity and amenities are probably common for residential properties with the development of the Circle Line and future MRT stations and is thus essential to have a clear sense of what is aspects of these have been priced in by the seller. It is also crucial to look at the condition of the property, specifically for one which have weaker locational attributes but are asking for fairly high prices.

An old property in a less accessible location will have the poorest property fundamentals and hence is unlikely to warrant a high selling price. If there are comparable alternatives with a better condition and property specifics like height, then the property is over priced. A large size development usually will have more alternatives available and it is critical not to make up your mind too fast unless it is confirmed the development is hot, even at subdued economic conditions.

Although we are generally impressed by smooth presentations, in the course of a house hunt, a perfect property presentation may have overlooked or have latent property issues not discussed. It will be useful for home seekers to critically evaluate the strengths of the property he heard as it is his job to, while the sales party have only the rights to present the strengths and of course, to alert you of some key issues or answer your concerns. A cool home seeker should not overlook his own responsibility and succumb to a smooth presentation, which after purchase, he realizes it was ‘too choreographed’. While we may have our favourite sales representatives, particularly those who are really personable, it is crucial to bear in mind one is looking for a property to purchase. The duty of the sales representative will be done after the purchase, and one will start his relationship with his property from then.

There are still plenty of areas for one to be steadfast in a property purchase but these essential aspects, if not practiced, the home seeker can thus in some part be considered a willing victim, unless there are cases of property mis-representation.

Extra pre-cautionary measures
The truth is, it is hard to lose one’s rationality in the midst of property search, where one is repeatedly exposed to different properties, each with its unique selling points. If it is difficult to remind oneself conscientiously, or for one who understands his weakness of will power, it could be advisable to view the properties with related ones such as family members or friends. If the property is not for his personal stay, this ensures the occupants are comfortable with the property. But at the reverse side of this, one should not adhere to the advice of companions who are more emotionally swayed, and the key is really to get objective companions along in the housing spree. Even if the property is for personal stay, such as studio units, one can still have friends who are seasoned in the financial or property aspects, or simply highly rational people to add in the walk through the properties. This will be beneficial to his friends if they are also open to purchase a residential unit.

Balancing emotions
Buying a property really requires a cool mind. Being psychologically manipulated is the least one should do in moderated economic environment, as it is not a rising market which presents all the upcoming opportunities such that one can easily lose his thoughts. But that said, it is also essential for one not to be devoid of emotions in his property search and miss the choice property. Fundamentally, buying a property is quite a personal affair, where one needs to have an affinity with his property. A property buyer will most often settle for the purchase because he can see aspects which others are not able to and decide to place an extra value for the property.

Since the implementation of the raise in the sellers’ stamp duty in early 2011, buying a property has become a long term objective as speculators are eradicated in the new era of property purchase. The buyer has to be comfortable with his property which is likely to be with him for a longer term to see financial payoffs and hence he really has to like the property he is buying. For some who may be having some regrets, it may be worthwhile to be optimistic that the property is to be with him for long term and there may still be some potential upsides or breakeven opportunities.

Ong Kah Seng, Director, R’ST Research
[email protected]
Tel: +65 6407 1029
Hp: +65 912 84953

About R’ST Research
R’ST Research is an independent property market research company in Singapore, offering a comprehensive range of property research and advisory services. R’ST Research covers all sectors in Singapore, residential, retail, office, industrial, investment, leisure and hospitality research. R’ST Research and Consulting studies all property related issues, and is not involved in property transactional and agency activities. R’ST Research & Consulting conducts independent market, feasibility and development consultancy studies on the property sectors in Singapore.
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