I asked my Mom the other day how many houses her and my Dad looked at in 1965 (I was 4 years old) when we moved from Adak Alaska to San Diego, CA. Her answer stunned me. “One”. They looked at only one house! “You didn’t think you needed to compare it to others?” I asked. “to make sure that one was a good deal? “No”, she said. “That one seemed like it would work for us and had everything we needed.”
I remember moving with my family from that same house in San Diego to Corpus Christi in 1982 when I was 19 years old. My Dad and I drove out to Texas ahead of my Mom and brother to rent a house. My Dad wanted something near the Naval Air Station to which he had been transferred. We drove around a little, called an ad in the newspaper, and met the owner to look at a house, walked through, and my Dad said “we’ll take it”. When my mom and brother arrived with the moving van, they moved into a house my Mom had never seen.
There was of course no internet back then, no mapping software with aerial views to check out the neighborhood, no school stats online, no online forums to ask locals 100 questions about the neighborhoods. The only thing my Dad wanted was a house that was close to where he would be working. Since the first house we saw was good enough, my Dad just took it without looking at any others.
Do people pick houses to buy and rent like this anymore? Occasionally. I’ve rented a few sight unseen over the years, and even sold some sight unseen (to investors), but many buyers nowadays overwhelm themselves with the process of finding the “perfect house”. After all, with all the listings online and so much information available, should one not be able to find the perfect home? Not necessarily.
Having too many choices and options results in less happiness with the ultimate choice, and can result in “buyer’s remorse”. Austin provides too many home purchase choices for people who expect to make the perfect choice. For buyers who have basic needs and are happy with a home that’s “good enough“, buying a home in Austin is easy pickings.
In a nut shell, the more you can limit your search as a buyer, the better chance you have of being happy with what you find. The longer you spend looking, and the more homes and areas you look at, the more floor plans you consider, the more people you talk to and information you receive, the more school stats studied, etc., the more you increase the probability that you will have diminished happiness and satisfaction with the home you ultimately choose.
This is because some part of you, the perfection seeker, knows deep inside that there must have been a better house or neighborhood that you simply never found because you didn’t look long enough or hard enough or see enough houses. Or you know that the home you eventually did pick doesn’t have all of the features you saw in the many other homes you passed up, and you now wish you had some of those features. That thought, if you’re the perfection seeker, will nag at you and cause you to feel less than full happiness about the home you did pick.
It sounds backwards – the idea that limiting the home search parameters can result in a happier home search outcome – but we see it in fact play out in the real life real estate market. I know from experience that if a buyer sees more than 12 to 15 homes with me, or spends more than 30 days looking, the chance that that buyer will ultimately purchase a home declines with each additional home shown, and with each additional week that passes. Counterintuitive as it may seem, it’s true more often than not.
Contrast that with less picky buyers, or relocation buyers (or investors) who fly into Austin on a Thursday afternoon, go out looking 4 to 6 hours on a Friday, and sometimes Saturday too, pick a home, make an offer, and are done with the search process by Saturday evening. Then on Saturday night, they head out for a night of fun and live music on 6th Street to celebrate finding a new home.
The buyer who wants to “see everything” and “consider all options”, on the other hand, doesn’t head out and have fun and celebrate their new home on Saturday night, but instead stays in the hotel room, sifting though dozens of flyers and MLS printouts. They can’t decide, and they’re stuck on the internet looking at even more listings, emailing me, as some have in the past, “what about Smithville?” and “should we be looking in Georgetown?” and “how far is Wimberley?”, after we’ve already, long ago, decided on the area of Austin that will best fit their stated needs and price range.
I call this the “manic” buyer. This buyer darts from thought to thought and idea to idea so fast that there is never the opportunity for a decision to settle in and feel right. They drive themselves, and me, crazy. If I’m not able to help that buyer focus on the 2 or 3 most important attributes being sought, and narrow down the search to a geographic area and price range, I won’t be able to help them find the “perfect” home because it will never exist.
In short, too much choice will paralyze some buyers. They fly home Sunday, tired and frustrated at having not found the perfect home. Then they start planning the return trip to try again, possibly with the intention of checking out some new areas and different neighborhoods the next time. These are not the buyers of my Mom and Dad’s era.
Fear Controls Everything
Fear of picking the wrong house or neighborhood causes many buyers to in fact pick no house. This is why so many people rent for a year or two to “get to know the town”, because of the fear of making the wrong decision.
Many who do pick a house after excruciating analysis and comparisons may forever after have nagging worry that they didn’t fully consider every single area of Austin, or that they didn’t spend just one more day looking at other homes. They are afraid that they didn’t make the best or most perfect choice.
Meanwhile, the people who do moderate or adequate homework and stop searching upon finding the first home that meets their primary needs, seem, in my experience, happier and more resolved about their purchase decision than those who’s selection resulted from a more thorough and lengthy scouring of homes in Austin. Again, it’s counterintuitive, but it’s true based on what I’ve personally experienced in working with a lot of buyers.
My advise for buyers is to do the homework for sure, but to then find an area that meets and satisfies the most important of your requirements, whether it be quality schools, location, age and style of homes in the neighborhood, or whatever. Then go find the best house in that area or neighborhood and buy it. Once you’ve bought the home you like, don’t ruminate or think about the ones you didn’t pick, or the various better or different features you may have passed up in favor of location, or a bigger yard.
Bottom Line
Where would you rather be on the third night of your house hunting trip to Austin … out on the town celebrating?… or holed up in your hotel room with listings, flyers and pizza spread all over your bed while you search the internet for more listings to consider?
Interesting and insightful post. Do you think it also applies to picking a career? A mate?
> Do you think it also applies to picking a career? A mate?
I think it applies to everything!
Steve
that’s the paradox of everything. if you settle, you might be happier. don’t you think that’s directly against the ideal that things can be better? How often you blame yourself for being lazy so you missed the best deal possible? Sometimes you might think that not only you didn’t snatched the best deal, you probably landed the worst deal.
Life is a competition between each other and one’s self. The result of the competition is not winning, but death.
With all due respect…sounds like a real estate agent needing to sell some homes.
Actually, it sounded to me like someone who has read The Paradox of Choice or Stumbling on Happiness (both excellent books) and wrote a well thought out article on how those ideas apply to the real estate market. I liked it enough to read it aloud to my husband last night.
I am an overthinker who often has regrets later. I’m trying to get better. 🙂
I find it’s the research stage that I really enjoy, so for my moves I’ve been researching areas and what we want ahead of time, but not spending so much time in the actual hunt. When we bought in Austin, we only looked at about 10 houses, most of them model homes. (This was an improvement over looking for our house in Temecula, CA in 2002 where we probably went through 50% of the tract homes in the area – maybe 150 models). We are now looking in North Dallas and I must have gone through every listing and looked up every community that was a vague possibility. When we go up there for the first time this weekend, I only expect to actually look at our top 3-4 choices. If we like the area and decide to move and sell our house here, we’ll be shopping for agent – probably let 2-3 give us the pitch. I plan on calling Steve as one of them on the basis of his posts on the city-data forum and his blog here. Have learned a lot.
Thanks for the book recommendations, Tashina!
Another excellent book that touches on this subject is called “Blink” by Malcolm Gladwell. One of the tasks of the book is to show how sometimes snap decisions are just as good as decisions that were thought out and deliberate. It also explores when it is and when it is not appropriate to rely on snap decisions. The subtitle of the book is “The Power of Thinking Without Thinking” so it focuses a lot on the subconsious and how it affects our decisions.
The funny thing was that one study indicated that the bigger the decision, such as choice of house or even life partner, people were much happier when they had made a snap decision. When it came down to much smaller things, like radios or kitchen appliances, people who spent more time gathering information and making a slow decision were the ones who were most happy with their purchase.
The book provides very interesting insights and scientific studies on how and why we make certain decisions.
The other motivator here is the plethora of renovation/dream home shows on cable (HGTV, at the very least). Peoples’ expectations have changed about what they want/deserve. Homes are now seen as a luxury for all (why do people in a 1200sf starter home expect granite?), not just a place to live that meets their needs.
This is part of a broader movement in society — I recently heard the term “the mainstreaming of luxury.” We all expect more, and see our home as part of our luxury lifestyle. So why not expect picky people?
>> The funny thing was that one study indicated that the bigger the decision, such as choice of house or even life partner, people were much happier when they had made a snap decision. When it came down to much smaller things, like radios or kitchen appliances, people who spent more time gathering information and making a slow decision were the ones who were most happy with their purchase.
That’s really interesting – sounds about right from my perspective.
When the homework is said and done, I think it’s a smart idea to go with your gut. A buyer can look at 50 different homes that meet their criteria, and would probably be pleased with any one they bought. Then there’s that ‘gut’ feel. I think sometimes people forget to listen to that. If I go to a nice home that’s at the top of my list, that’s great. But if I go to another home which is just as nice – and I wind up having a great conversation with a neighbor – I would probably buy the house with the cool neighbor.
> and I wind up having a great conversation with a neighbor – I would probably buy the house with the cool neighbor.
We’ve had that happen. A buyer strikes up a conversation with a neighor who happens to be taking out the trash, or out working in the yard, and the result is a “good vibe” about the neighbor or neighborhood, and it becomes the deciding factor the decision. Perfectly understandable, and at the same time irrational if you think about it.
> someone who has read The Paradox of Choice
Haven’t read it, but have read an article about it. Yes, it ties in exactly.
> sometimes snap decisions are just as good as decisions that were thought out and deliberate
I believe that. Looking back, it’s true in my life in many instances.
We are building a new home and I’m trying to limit the decisions. It’s not as hard as one would think as long as I remain aware of the notion that I don’t need to, for example, consider all 12 or 15 different doorknob styles. We decided on a knob style immediately and moved on. On the last house we built 3 years ago, I spent WAY too much time carefully considering each small decision, and it was not a fun process. This time has been different.
Steve
Steve
Re: tashina’s post — I would rather kill myself or go live in a cave with a portapotty than visit 150 homes. Or 30. My current residence was the first and only house I looked at, and I bought my first rental house after looking, in person, at a grand total of less than 10. Whatever works for you…
To Enoch: 🙂
I had lived in a small 1920’s non-renovated house in San Diego (with a 10′ x 20′ backyard) all my growing up years and then lived a while in the same age housing in San Francisco. When we moved to Temecula, it was the first time I had ever been inside of new houses and they were all affordable to me. I was really like a kid in a candy store. There were dishwashers(!), rooms just for washers and dryers(!), countertops that weren’t Formica(!). Every house was furnished with couches and tables and chairs that weren’t from the 60’s(!). Some had pools, some had wine cellars, some had little round cuppola retreats. Amazing. Fantastic. Ha.
You get the idea. We wouldn’t do it again, but it was fun once.
The “picky buyer” syndrome is a ancillary effect of the easy money loans and the peer pressure of all the home buying and investment show on television. In my childhood in the 60’s and 70’s, families would commonly stay put for 15-20 years, and add additions to the house when pinched for space. Then the trend shifted towards came 5-7 years, as folks became more mobile and the throwaway mentality dominated. What you will begin to see very soon, which will increase in frequency the next 5 or so years, is a strong trend back towards the old stay-put days.
While it will not be 15-20 years, you can expect a 10 year average occupancy not uncommon, with renters trending longer as well. Far fewer houses will be on the market, again like our childhoods. Fewer tv shows, fewer home improvement stores, and far less buying and selling buzz in the public commons will result as well. And, finally, real estate agents will be happier, as only bona-fide buyers will be looking. The RE industry will contract, not being seen as viable or hot as it was in the boom. Web 2.0 will probably take over the RE industry at that point, as buyers and sellers get and stay into a DIY mode. The full-time RE agent with the car, and the brick and mortar RE office will be as quaint as the full-service gas station, where windows were washed and oil was checked. This will happen sooner than most think. Expect the change to be full swing within the next 3 years.
Picky buyers will be the least of the old school RE agents at that point. So goes the old french proverb, “The more things change, the more they remain the same”………
Scott – Interesting points. I think, though, you overlook the increased mobility of professionals to shift jobs, which will drive demand in an important sector of the RE market. Population growth and demographic shifts will also continue to drive more demand than your post would indicate.
I would also agree with you that the internet/web 2.0 will change the playing field for agents. It is unclear to me that any of the current alternatives are that compelling, however. What I suspect will happen is that agents’ knowledge will be brokered on a flat fee for service, rather than a percentage. Traditional value of the agent is knowledge of the houses on the market — this will rapidly diminish to near (but not quite) zero given internet search engines and comments. Agents do have local knowledge of geography, roads, neighborhoods, poor soil conditions, etc. as well as resources (contractors, etc.) that will be hard to repeat on the web. The question is — should I pay someone like Steve a percentage of the sales price for that, or rather a fixed or a la carte fee?
Bill…right on. I’d like to add that home prices have increased dramtically in Austin. Just look at the prices in Lakeway and I think you can understand why buyers might be a little afraid of making the wrong move when the economy may be on the cusp of a downturn.