A lot of homebuyers feel that they are making a completely logical decision when deciding to purchase a new home but sometimes they don't even realize that emotion may be swaying their decision to a certain degree. Quite often there are smells, sounds and colors that are influencing the buying decision that the homeowner isn't even aware of.
Is Your Home Buying Decision Based on Logic, Emotion or a Bit of Both?
In some cases a home that you're looking at may be reminding you of a home you have previously been in before. For example, the layout may be similar to the one that your childhood sweetheart used to live in and bring on a flood of fond emotions. In this type of scenario you'll be drawn towards the home for other than purely logical reasons.
It's long been known that emotions can sway a decision to purchase for all types of items. A lot of advertising is geared towards impulse buying and sometimes this can also affect you when you're looking at homes. There is a lot of marketing behind selling a property and when it's set up in a particular way it can either turn you away from the house or make you want to buy it on the spot.
Simply understanding that this type of consumer behavior can be a factor in any purchase will help you look at the homes you’re viewing in a new light and give you more objectivity. You certainly don't want to purchase a 2-story 3-bedroom house because it instills positive emotions in you when what you really want and need is a bungalow with 4 bedrooms! While this is a far-fetched example, you get the idea. It's much better to base your final decision to buy on logical points and features of the house rather than on emotion alone.
Other factors like fear of the unknown, expectations, the need for status and what your friends and family will think of the house can also come into play. There are a lot of things that can influence your viewpoint on the home and some of them just aren't logical at all. The more you can separate logic from feelings the better off you're going to be when it comes to walking away with a home that not only makes you feel good but also has all the necessary features that your family needs to operate at an optimal level.
How to Ensure Your Home Search Stays Logic-Oriented
There's a fine line in real estate between emotions and business transactions. When you're trying to find the perfect home it's hard to keep the business and the emotions separated. On one level, you need to love a new home that you're going to purchase - especially if you plan on living in it for many years down the road.
On another level, you need to keep a business perspective on the sale so that you don't end up overspending or getting caught up in a bidding war that seems overwhelming.
The best way to keep the business part of the purchase in line is to create a list. This should be done on a day when you feel business minded and haven't taken a look at any home on the Internet or in person. You should try to create a list of the features that you want the most in a home, the absolute maximum amount that you'd be willing to pay, the type of neighbourhood you want to live in etc. The list should be finalized and kept close by when you're either shopping on the Internet or viewing a home with your real estate agent.
Sometimes it can be overwhelming when you're home shopping and you can't find exactly what you're looking for. The emotions can run extremely high and if you are shopping for a home with your spouse, things can get hot and heated. When you find yourself in this type of situation the best thing that you can do is to withdraw from the home shopping for a day in order to put things back into perspective.
It's very hard to find the perfect home when you're feeling frustrated or desperate. The more you can keep a rational perspective on things, the better off you're going to be. Buying a home is an emotional and a business decision and both of these viewpoints need to be kept in balance. When you're able to do this, the right home will naturally arrive at the right time and you'll instantly know it when it does. It will be a home that you love and can afford situated in an ideal location.
How to Conquer Your Fear and Overcome Homeownership Hurdles
There are many benefits of homeownership. It creates a level of stability in a person’s life and provides a safe environment for children to grow and learn. A home can also have several financial benefits, creating borrowing power for the homeowner and the opportunity to build wealth that can be passed on to children and grandchildren.
Still, many Canadians are sitting on the sidelines because of all the negative news they have heard on the radio, seen on television or read in newspapers. Others may not have enough extra money to save for a down payment or have other financial difficulties, such as poor credit scores that make it difficult for them to get approved for a mortgage
This article will help you overcome these hurdles and take advantage of one of the best times in recent memory to buy a home in one of many wonderful communities across Canada.
First How To Conquer Your Fear Of A Falling Market?
Stop listening to negative news and people. If you are waiting for "all lights to be green" then you will wait forever. You must stop every negative source of information from coming into your mind and concentrate on the positive aspect of the current market such as lower mortgage rates, lower prices and more selection.
Read a self-help book on how to set up goals and achieve success. Every successful person that I know has had to overcome fear of failing in order to reach their goal. You need to fill your mind, body and soul with positive thoughts that keep you encouraged as you embark on your journey towards homeownership.
Speak with your real estate agent. He or she will be able to show you many bargain deals that will make your mouth water. Imagine snatching up a beautiful home in your favourite neighbourhood which is priced twenty thousand dollars below market value because the owners have to move in eight weeks.
Stop listening to advice from family and friends. When the market turns back to a seller's market, the deals and the selection will quickly go away. If you find the right home, and the price is below other similar homes that are comparable then go for it.
Second How To Come Up With The Down Payment?
Using a $300,000 purchase price as an example, the following chart shows the different down payment options available for you and the amount of down payment money needed to qualify for a mortgage:
|Type of Mortgage||% Down payment||Amount of down payment required|
|No Down payment||0%||$0 ($4,500 must be available for closing costs)|
Once you have established the amount of down payment you need, you must put in a solid plan to raise this money in the shortest possible time. Here are a few ideas to help you:
- Simply start saving by having a pre-determined amount of money transferred from your chequing account to your savings account each month.
- If you are a first-time buyer, use money from your RSP as a portion of your deposit.
- Consider moving to a less expensive rental unit and save the difference each month toward your down payment.
- Pay off your credit cards or consolidate them to reduce your debt and the interest you’re paying.
- Consider a second job with the income going directly toward saving for your down payment.
- Borrow from family; relatives may be happy to help.
- Sell some investments or possessions.
- Pass up luxuries such as movies and eating out, and deposit the money you would have spent into savings.
- Take your lunch to work, clip coupons and use them, drive more slowly to avoid unnecessary fuel consumption or take local transit, cut back on
- long-distance calling – it all adds up.
By cutting back on your day-to-day expenses you will be able to put more of your earnings away in a savings account. Budgeting doesn’t have to mean economy meals and nights in with just a book for company – there are many ways you can cut back without feeling like you are depriving yourself.
Work up your plan vigorously. Many first time buyers that I know were able to save up the required down payment in around two years, and now are the proud owners of their own dream homes. It only takes some planning, will power and discipline.