Peter Boehm, author of ‘‘The Great Australian Dream’ has cautioned homebuyers about their emotions.

As a property expert he believes the number one enemy of the first homebuyer is is the influence their emotions have over their mentality.

“Check your emotions at the door,” he advises.

“Buying a property is an emotional experience, because it’s probably the biggest investment you’ll make in your whole life.

“It’s going to be with you for some time, so it’s got to feel right. But the problem with that is that something that might feel right, might be out of your capacity to buy.”

Once you are at the auction, continued Mr Boehm, “never bid with your heart.

“You could end up being a slave to your mortgage and your first home could be a trap, it could be like a prison.”

To that end, the auctioneer is not your friend. He/ she are trying to generate competition among the bidders to drive the price higher.

Psychologist Sarah Godfrey points out 4 psychological archetypes among property bidders. Auctioneers are quick to identify which archetype a bidder belongs to and adapt their strategy accordingly.

  1. The Competitor: “This is the person who is in it to win,” said Ms Godfrey. “It doesn’t matter if they want the house or not, they just don’t want you to have it. They get caught up in ego and pride, because you are bidding against them.
  2. The Dreamer: “The buyer who walks into a house and is off in fantasy land – Women are particularly bad at this. They fall in love with a person’s lifestyle or status and are mesmerised by a clean and beautifully decorated house.”
  3. The adolescent: “Wants it now and doesn’t want to think about the long-term consequences, driven by impulse and immediate gratification. Not realistic about price or essential characteristics of the property.
  4. The Narcissist: “This is the type of person who has the real estate agent tearing their hair out. They believe they should get the house at a better price than anyone else and will not back down, they are grandiose and will fight to the last $1000.”

Everyone has some of each trait in them. But one usually dominates the others. The auctioneers will be sizing up the buyers for these traits, so it’s important to be aware of your own predilections and make sure they are not working against you.

Leave a Reply

Your email address will not be published.