Real estate agents or brokers know that there are so many factors that influence an individual to buy a property. Although his decision primarily depends on his financial standing, this isn’t the only determinant. There are several other factors that convince people to buy a house or to invest in a commercial property.
If you want to work in real estate, one of the things that you have to learn and understand is consumer behavior. What is this? Imagine yourself as a consumer. This is easy to do as most, if not all, of us are consumers in one way or another. When you buy something, what persuades you to spend your hard-earned cash? Is it the price; the concept that a product represents; or the way that a product makes you feel? All of these things actually have an effect on you, and these elements have an impact on your behavior as a consumer. Consumer behavior involves all the psychological processes that each individual experiences, whether consciously or unconsciously, when buying something. Consumer behavior affects how a person recognizes his needs, how he finds ways to secure or dispose of things, or how he makes plans about what goods or products to purchase.
Elements That Influence a Person When Buying Real Estate
1. Identified Need or Problem
The process starts when an individual recognizes a certain need or a problem. Here’s an example. A couple, John and Martha, lives in a one-room apartment. When Martha got pregnant, the couple realized that the place was too little for their growing family. Because they also lived in the city, they began to think that it would be better to buy a house that’s a bit farther from the heart of the city so that their child can enjoy a bigger place and a less crowded environment. Hence, the couple’s decision to buy a house started as soon as they realized their need.
2. Internal versus External Factors
According to experts, internal factors refer to several elements, including a buyer’s attitude, perception, personality, lifestyle, and self-concept, to name a few. The buyer has the greatest effect on these internal factors. As for external factors, these are the aspects that one cannot control. The market changes or trends, government laws or regulations that affect prices and property values, as well as taxes are a few examples.
3. Planned versus Unplanned Purchases
Usually, when you want to buy something quite expensive, you plan for it. You have to make sure that you can afford it, and so you conduct an extensive research, compare prices, and you also get recommendations from the people you trust. These are the things that people usually do before they purchase vehicles or properties. They also save money to pay the full amount or the down payment. Usually, a number of internal factors influence a planned purchase, such as an individual’s desire for something new.
As for unplanned purchases, these are also commonly known as “impulse” buys. Several internal and external factors come into play here. For instance, someone who desires a change of pace (internal) is suddenly convinced to buy a house that’s on sale (external). Still, only some have the luxury of buying a property on a whim.
4. People Around a Buyer
A person’s family, friends and acquaintances greatly influence his decision to buy a product or a property. If, for instance, his closest family or friends tell him to invest in a housing project because the price is fair and it’s expected to increase after a few years, then the buyer might be convinced to buy. A consumer will value the input and ideas of the people that he trusts the most.
- Meredith Leigh Collins. “nice house that’s for sale”. March 22, 2010. Online image. Flickr. May 2, 2013.
- License: Creative Commons image source
Claire Flint is a freelancer who regularly writes about home improvement and real estate issues. She also wants to provide more information about a Brooklyn real estate school in order to further encourage those who want to become successful in this field of work.