The Psychology of Real Estate – Buyers are Savvy yet Seducible

WSJ’s Smart Money just came out with an article checking in on the ongoing study of the psychology of real estate.  The article quickly covers a variety of issues, but they are a bit enlightening.  For instance, buyers are savvy to broker speak.  I say broker speak because anyone who has searched for a rental or a home to purchase has been met with flowery language that in the end all means the same thing.  For instance:

Come see your new SPACIOUS home in far eastern SoHo at an open house this sunday.  The luxurious pass through kitchen opens into an immense charming living room while the en suite bath compliments the pin-drop quiet and restful cozy bedroom.

This sometimes translates into:

Please check out this averaged sized apartment in Chinatown on Sunday.  The kitchen (it has a dishwasher!) still has a hole in the wall from when they started construction that fits a small plate.  The living room is large because there are no walls or ceiling following the fire (don’t touch the wires) but its charming because you can see cute doodles on the exposed asbestos left behind by the contractors.  The bathroom is only accessable through the bedroom (so clean up before guests come) and enjoy sleeping in a coffin as the window looks out onto brick 6″ away.

OK OK… that is not entirely fair and there are plenty of places that DO match the description (I’m thinking sales do a much better job than rentals, and often come with pictures).  BUt the point is that although this type of effusive description is often used, the consumers often look past it.  Places that describe their home as having “new paint or a new roof ” often end up selling for LESS because people believe that the intent was to put “lipstick on a pig”.  We in the industry call that “putting carpet on a linoleum floor”.  OK, maybe nobody says that. 

Another item of note include the effect of paint color on a potential buyer.  Even though it only requires a couple buckets of paint to make a room any color you want, rooms painted with very particular colors (like pink) will often turn people off.

As well, out-of-town buyers are likely to pay more for the same property as a local.  This seems to have more of an economic base,m as often out-of-town buyers are in more of a hurry, and the cost of traveling to and from for multiple days of showings or losing bids for low-balling an owner may in turn prove MORE expensive in the end. 

Lastly, and more carnal, is the effect of attractiveness in a broker.  Apparently, attractive female brokers tend to get higher bids than unattractive.  This effect is not seen as much in males, though it affects both male and female buyers.  Of course, we’ve always known this to be the case which is why the Blumstein Team is full of knockouts.