Ask the average “man on the street” about the real estate market, and you probably won’t hear very much excitement. Right now, real estate is a big “if” for many people.
The perception of real estate among retail buyers has been permanently changed during the past few decades, causing typical retail home buyers to view themselves as “investors” in real estate rather than mere “consumers” of real estate. This may be a fundamental cause in the “flood” of underwater homes on the market, hypothesizes Isaac Lewis of the “Red, White and Blue Press.” Whether you agree with that particular publication’s politics or not, it is something interesting to think about: While many homeowners are selling because they cannot afford their homes, other owners who can afford their homes are selling (or allowing foreclosure) anyway because they perceive that their home is no longer a good investment.
In other words, the decision to stay or go isn’t fundamentally about whether a property meets a home owner’s needs, but now includes a strong dose of amateur financial planning.
This should change the way we work with potential home buyers. When a typical retail buyer considers a home purchase, they’re likely to look for something that will eventually turn a profit rather than just an area or abode that they might want to live in for the next few decades in happiness and comfort. Perhaps by changing the way we present home-buying in the present to focus on the fact that real estate is still a good investment in present-day comfort and happiness for family and loved ones as well as in future wealth (much like many real estate agents do) we can build our buying base so that our buyers are not so reluctant to put their signatures on the line.
Psychological professionals call this “Framing”. By placing the object your want to sell in a favorable context to the buyer, mental “roadblocks” are removed for the buyer making the transaction far more likely. The “frame” we have to begin to include in our negotiations with buyers is one of “profit potential” or at least “capital preservation”. Food for thought!
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