If you didn’t check out Part 1 in this series—The Psychology of Marketing Real Estate—I encourage you to do so. We started with the most important ingredient, people, and now we’re moving on to the physical product itself… the home!
There’s a great deal that goes into a purchase decision involving a new home. First off, it’s one of the largest investments most of us make in our lifetimes. That, by itself, is enough to set many folks trembling.
Yet besides the money, there are a large number of complex emotions that also come into play. As with anything that we humans interact with, things can get complicated quickly.
Let’s get started!
The Psychology of Real Estate First Impressions
Psychologists have long touted the power of first impressions. In fact, they write articles, like this one, all the time.
The design of the human brain is incredibly sophisticated. Even though it gives precedence to people first, everything we encourage is being analyzed.
Because our homes are highly personal objects, especially to women. The first impression a home makes sets the stage for the final evaluation each of us assigns a property, after completing a house tour.
For this reason, it’s always (yes I said always) important to make a home’s first impression as powerful and positive as possible. (How’s that for some alliteration?)
When the home buyers pull up to the house, their brains are assessing and gauging everything from the home’s facade to the landscaping, sidewalk, driveway, and even the mailboxes. All this comes naturally to us and is performed seemingly without effort.
The strong marketing Realtor will work with their clients to optimize first impressions because simply… it’s worth it.
“You never have a second chance to make a first impression.” –Harlan Hogan
The Psychology of Real Estate Home Staging
Where the first impression stops and the official home tour begins is debatable. Typically once the front door is opened, we have now progressed into the home staging space.
Each property has its own unique set of variables. Some need a great deal of staging. Others look like they’re already set to be featured in Better Homes & Gardens.
Whether or not a professional home staging company should be hired is largely up to the expert opinion of your Realtor. There’s a great deal that strong agents can recommend to be done. This comes with no additional cost to the homeowner. Veteran agents have seen it all and understand the mindset of today’s home buyers.
Here are the four key points of emphasis when it comes to the psychology of real estate home staging:
- Size: Overall size is highly valued by home shoppers. Remove as many unnecessary furnishings as possible to enhance the space’s perceived size. Declutter and then declutter some more.
- Light: There’s a reason buyers are constantly saying, “It’s so light and airy!” That’s because people love natural light. Stage the home to highlight windows and the incoming light and don’t forget to change any broken light bulbs.
- Condition: Today’s buyers want move-in ready. Each project holds its own Return on Investment (ROI). Consult with your real estate professional to see which projects are going to best enhance a home’s appeal.
- Style: Here’s a tricky one. Not all buyers love the same styles. Sometimes you just gotta make the best of a bad situation. Consider specific, low-cost updates to help transition a less desirable style to what’s currently hot right now.
The Psychology of Real Estate Pricing
There’s been a great deal of analysis when it comes to the psychology of real estate pricing. Unfortunately, most of it is inconclusive. There is one great strategy though but I’ll save it for last. *wink*
A best practice, when it comes to pricing merchandise, is using even numbers for higher-end products. So rather than list a luxury timepiece for $899.99, a more substantial $900 says, “We don’t need to worry about the small change.”
What’s higher-end than a house? I tend to agree that the psychology of a smaller, albeit just by a hair, number will have little effect on the minds of the buyers.
Another concept that is popular with certain agents is exact pricing. The idea here is that if you price a home, let’s say $237,924, the sellers have put a great deal of thought into this number so there is likely less wiggle room.
While some buyers may perceive this to be true, others will find this unusual tactic confusing. The jury is still up in the air as to whether this strategy is effective.
Now here’s the great strategy I teased earlier. Given that most home buyers today are online first, we need to understand the usability of these websites. Each has tiers in their price drop-down menus. These land all over the board. Some are $10,000 apart, others $50,000, and still others let you be more precise. But here’s what happens in practice.
Suppose you are thinking of listing your home for $199,900. House hunters searching online who search for $150,000 to $200,000 will find your listing in their results. But those searching from $200,000 to $250,000 will not.
It’s better to list at $200,000 even and land in both sets of results, right? Right! Cool, huh?
Now that we’ve done Parts 1 and 2 in the series on the psychology of marketing real estate, all that’s left is Part 3. Stay tuned!