North Sound Property News

Why do people buy real estate?

I’m not talking about investors here, I’m talking about the average Joe.  Investors buy real estate for completely different reasons than “regular people.”  And regular people, I’d submit, are who most of us as real estate agents work with most of the time.

So, what makes regular people decide to make the leap and buy a home?

Is it because it makes more sense than renting?
Is it appreciation?
Is it the promise of untold riches?
Or is it something simpler?  Something more basic?

Most real estate agents don’t follow the work of today’s leading market researchers, but a few do.  The great thing about market researchers is that you pay them tons of money and sometimes, if you are lucky, they leave you with a fat report that contains an interesting tidbit to play with.  The seed of an idea, if you will.  It then becomes your job as a marketer to water and fertilize that seed.

Unfortunately, if you’re like most companies, the money will be spent, the seed will never be allowed to take root, and 6 months later your company will move on to some new seed.

This is why most market research doesn’t usually lead to any kind of measurable result.

Anyway, one of the leading market researchers in the world today is a guy by the name of Clotaire Rapaille (ra-PIE).  He consults with many of the leading Fortune 500 companies, and my husband has had the opportunity to work with him at Boeing.  Really interesting guy, Dr. Rapaille.

One of the concepts Dr. Rapaille is big on, is the concept of the triune brain.  As far as Rapaille is concerned, everything people do or don’t do comes down to processes that are going on, usually subconsciously, in the reptilian, limbic or cortex brain.  At the reptilian level, are the decisions made at the gut level—the things we do without knowing why we do them.  At the limbic level, are the decisions made at an emotional level—the things we do because we FEEL we should do them. And at the cortex level, you have the decisions that are made by thinking about them, analyzing the situation and determining the course of action that makes the most sense.

Guess which part of the brain controls the decision to buy a home?

Guess which part of the brain in fact controls most of the decisions we make in life?

Here’s a hint—it’s usually not the cortex.

Dr. Rapaille would say, “the reptilian always wins.”

Realtors have said for years that homeownership is an emotional decision.  That’s our non-scientific way of saying that there is no way for us to predict who will buy a home, or what home they will buy, by analyzing the various parts of the decision.  People will tell you they want one thing, and then run right out and buy something else.

I did a fun experiment with this myself earlier this year with a young engineer who was looking for a condo.  We went through a long process of determining what his criteria for a home were and what was important to him.  In our conversations it was determined that quiet, safety and security were important to him.  But, this was offset by the fact that he was a single guy and was looking for a place where he might meet other people (girls) his own age. 

When he had it narrowed down to a couple of properties, we set up a spreadsheet to help him determine which one to make an offer on.  One condo was out in the suburbs, very safe and quiet, good neighborhood…but nowhere near anyplace where a young guy might ever meet a girl.  The other condo was one that didn’t meet most of his criteria, but he couldn’t get it out of his mind.  It was in a downtown location, not quiet, not the safest neighborhood (not unsafe either by any stretch)—but, near lots of activities and places to meet people.

Guess which one he chose?

Of course, he chose the downtown condo, because it was about the life he wanted to live in the condo, the people he hoped he’d meet while he lived there, and the emotional and gut feeling it gave him, not because it met every criteria on his checklist.  The guy just wanted to have fun.

The decision to become a homeowner is, ultimately, an emotional decision.  It’s about the experiences we have, or want to have, in the home.  Most people who eventually become homeowners have a strong reptilian affiliation with the idea of homeownership.

Others don’t have this affiliation.  For some, the reptilian brain has an aversion to the idea of taking on risk and the fear of commitment is a stronger driver than the desire to own a home.

There’s nothing wrong with that.  Just don’t think that any argument made by the first group is ever going to change the mind of someone in the latter group, or vise versa.  Because it’s about the reptilian brain, not about the cortex arguments you might use to justify what the reptilian is telling you to do.

 The reptilian always wins. 

Which is why I believe that a real estate agent’s role should be to help a person make decisions that make sense within the context of what is undoubtedly a “reptilian” process.

It’s not our job to tell someone they should buy a house or not.  That’s up to them and they will make that decision in their own way.  It is our job to provide market insight and advice that is honest and true, so that once the reptilian brain has made a decision, at least there is some kind of cortex process providing proper guidance.  And it is our job to help make the homebuying experience a great one, once they’ve decided to embark on that path. 

 But ultimately not only is it not our job to create demand where it doesn’t exist.  It’s a waste of time to try, anyway.   Arguments such as ”buy now or be priced out forever,” “real estate always appreciates,” “renting is just throwing money down a hole,” and any of the other arguments you might make–however much you may feel they are true–will never sway anyone who has decided that it isn’t a safe time to buy, because their reptilian brain isn’t listening.  It isn’t thinking.  And it is in complete control.

Why?  Because Dr. Rapaille was right.  The reptilian always wins.

About the Author: Sandy Kaduce is Associate Broker of Gallery Homes Real Estate. She serves buyers and sellers in North King and South Snohomish counties. She is 2009 Board President of the Mukilteo Chamber of Commerce, as well as Vice President of Site Selection for Habitat for Humanity of Snohomish County. For more information, visit Sandy on the web at www.sandykaduce.com! Read more from this author