Which came first, the chicken or the egg? A similar question could be asked about the role of numbers versus personal investment in real estate. At fi
Which came first, the chicken or the egg? A similar question could be asked about the role of numbers versus personal investment in real estate. At first glance, numerical value and personal value may seem like polar opposites, the warring factions of the left and right brain. In reality, however, one begets the other.
In simplest terms, someone will not buy a home or property they are not emotionally invested in. They need to see how it will play into their future, their quality of life, and the nuances of their daily existence for the next indeterminate number of years. On the seller’s end, someone will not happily sell a house they are emotionally attached to for anything less than what they perceive its value to be.
It is clear that personal investment and financial investment are linked, but the actual mechanics of this relationship are a bit more obscure. In fact, it could be argued that the “formula” is vastly different for each individual person, and may even differ within the same person in different situations, levels of stress, or points in the process of buying or selling a property.
Despite being quite nebulous, the translation between personal value and monetary value cannot be overlooked. It would be short-sighted to call real estate simply a numbers game, but a “mind game” of sorts is not an accurate description, either. The difficulty of ascertaining this relationship is compounded by the fact that it is often something that clients are only vaguely aware of themselves.
You cannot simply come out and ask someone, “What is your home worth to you, in emotional dollars?” They would look at you funny and might seek another professional to help. But in one way or another, these types of questions need to be answered, though they do not necessarily need to be asked.
Personal history involves more than just sentimentality. Personal history is a unique marriage of both emotions and numbers. You can get a feel for the interaction of the two by asking the right questions.
Inquire as to how long someone has been living in a particular dwelling place (numbers). Follow up by asking, if they are looking to sell, what is prompting them to move and what they will miss most and like to replicate in their new home (emotions). Ask them how much time, energy, and resources they have put into modifying and maintaining their current home (numbers). Figure out why they made these choices, toward what goals or values they were working, and how much relative effort they would want to invest in a new home, both immediately and over time (emotions).
Asking these questions can give you a glimpse both into the type of buyer, seller, or homeowner someone is as well as how their emotional investments play into their financial investments. You can use their past as a springboard for helping them design their future.
Give and take
Instead of setting emotion and numerical value as opposing sides to be brought together, paint them as supplemental sources of information. Ask a numerical question and follow it up with a personal one that demonstrates how the concepts are related. Get your client thinking about what buying or selling a home will look like in terms of both emotional and monetary output.
As you speak more with your client, their feelings and goals may change, but this is to be expected, and will ideally bring you closer to a sound resolution both in terms of numbers and personal feeling.