McClelland Minute - August 22, 2010

Emotion Trumps Logic

The dictionary describes emotion as a “heightened feeling” about something or somebody.  In real estate you never know when emotion will enter in the equation, but it almost certainly will.  Let me give you an example or two.

Some of the toughest property to sell for a client is the home quarter or the cabin at the lake.  Both evoke strong memories and even mental anguish at the thought of having to let it go.  Ask any farmer or rancher, they don’t want to be the last generation to own the family farm.  Same applies to lake property.  Everyone hopes that one or more members of the next generation will embrace it as they have done.  However the adult children may live hundreds or thousands of miles away and it makes no sense to hang on any longer.

These feelings can, and likely will, get in the way of a realistic valuation of a property’s worth.  It is only normal to want someone to pay for the pain being felt, but I can tell you from experience that money never takes this particular ache away; only time.  Most new owners will respect the heritage of a property, while at the same time breathing new life into it.

I have seen emotion also cause problems in the middle of a sales negotiation.  We work with many personality types on a day to day basis.  There are those who approach bargaining as “win – lose”, they feel they must gain an advantage over the other in order to feel satisfied with the outcome.  Not too long ago, I observed a client lose a certain sale of their house at fair market value due to pride getting in the way of common sense.  Unfortunately I am not convinced they learned a lesson out of it either; I guess time will tell.

There is no doubt that motivation plays a big part in negotiation; the sellers’ reason for putting the property on the market, and the buyers’ desire to own it.  To some buyers it is very important to know why a house is being sold; to others it is of no concern.  There are bargain hunters in every community that continually look for a distress sale, and will try to take advantage of a perceived weakness in the seller’s position.  Bank owned properties or those being placed on the market due to a relationship breakdown often attract this type of buyer.

That is not to say there aren’t a number of happy occasions within real estate too.  The couple that has saved enough to buy their first home.  A young family that purchases a lot at the lake to park their RV on as a step towards building a year around recreation property.  The recently retired individual who has successfully downsized from a large house to a condo, with cash left over for travel or the purchase of second home in a warmer climate.  All of these transitions and more can also evoke strong feelings.  But then, how dull would life be without emotion?

Vern McClelland is associate broker with RE/MAX of Lloydminster.  If you have questions or comments on this article or other real estate matters, he can be reached at 780.808.2700 or through the McClelland Group website www.mcclelland.ca

Comment Notification

Subscribe to this post's comments using RSS