The Psychology of Home Buying: How Emotions Influence Decisions

House hunting can be an emotional process. For many people, buying a home is one of the biggest financial decisions they'll make in their lifetime. That said, making an offer or walking away from a deal isn’t solely based on a buyer’s finances.

There are deep emotional motivators connected to purchasing a property. A home provides confidence in the future, gives us a sense of security, and serves as a symbol of success.

But those emotional motivators can work for us and against us. Maleno explores how emotions can impact our buying decisions and how to shop mindfully for your home to ensure you make the right choice.

Be Aware of “Affective Forecasting”

Despite the boundless amount of information at our fingertips, research suggests that people are surprisingly poor judges of what will positively and negatively impact their future emotional states. For instance, many people overestimate how happy they’ll be if they win the lottery, buy a luxury car, or move to a new city. By the same token, people overemphasize the devastation from getting passed over on a promotion, breaking up with a significant other, or losing stock portfolio value during a dip.

Coined in the 90s by psychologists Timothy Wilson and Daniel Gilbert, “affective forecasting,” previously known as “hedonic forecasting,” is the process of trying to predict our future emotional state. Wilson and Gilbert’s research showed that people’s current feelings can impair their ability to make clear long-term decisions.

So, how does affective forecasting impact the homebuying process? First, the urgency of the market can get homebuyers overexcited about buying despite financial risks and issues with the home. In fact, 82 percent of 2023-2024 home buyers express regrets about their recent property purchase, with the most common regret being the purchase of a home that requires too much maintenance.

Secondly, eye-catching features can distract buyers from the flaws in a home. Beautiful staging, luxury appliances, hardwood floors, and good lighting can be enough to overlook a poor layout, structural problems, and outdated systems. Case in point: About 1 in 4 buyers cited a home not meeting all their needs as the source of regret.

However, the same principle applies to the features of a home that we prematurely write off as deal breakers. All too often, our negative bias clings to ugly wall color, outdated fixtures, and poor landscaping when it should see those issues as areas of opportunity.

Especially under the duress of a hot market, it’s easy to overestimate how much you’ll enjoy or regret a home purchase. That’s why we recommend giving yourself a cooling-off period, where you:

• Talk with a trusted real estate agent
• Consider the arguments for and against buying it
• Ensure you're not compromising a “deal breaker”
• Reflect on how the home aligns with your House Hunting Wish List
• Consider the location as much as the home

Look Out for “Somatic Markers”

Somatic markers are emotional signals shaped by past experiences that are meant to help influence decision-making. For many people, this reaction manifests itself as a “gut feeling.” The problem is, our gut feeling isn’t always right.

More specifically, certain stimuli may cause us to overreact. Be it the energizing sunlight pouring through the windows, the nostalgia of old built-ins, or the warmth of a wood-burning fireplace, we can experience so many positive somatic reactions that they begin to distract from structural problems, lack of space, or poor location. The same goes for overreactions to dingy basements, poor lawncare, or musty smells.

While somatic markers can guide us to homes that feel right, they can also cause buyers to walk away from once-in-a-lifetime deals. Pro tip: When you feel a strong “yes” or “no” reaction, ask yourself: “Am I reacting to the home itself or to a memory?”

Consider Your Emotional Motivators

It’s a beautiful thing when a home connects with you on an emotional level. But it’s helpful to determine what’s inspiring the desire to make a purchase. While there are hundreds of emotional motivators that researchers have identified, there are 10 that significantly affect consumer behavior:

1. Stand out from the crowd
2. Have confidence in the future
3. Enjoy a sense of well-being
4. Feel a sense of freedom
5. Feel a sense of thrill
6. Feel a sense of belonging
7. Protect the environment
8. Be the person I want to be
9. Feel secure
10. Succeed in life

Identifying and analyzing emotional motivators is challenging but often helpful when deciding to buy a home. Pro Tip: Before making an offer, take a moment to ask yourself which emotional motivators are at play and whether the home truly supports them long-term. This reflection can help separate lasting value from in-the-moment excitement.

Find Someone You Can Trust

It’s clear that buying a home isn’t just a financial decision; it’s an emotional one. For that reason, it’s essential to work with a real estate agent who listens to your concerns, understands your goals, and builds lifetime client relationships. With the proper guidance, you’ll be able to see clearly through the excitement or hesitation and make a decision that aligns with your long-term needs, not just your short-term emotions. Reach out to Maleno to learn more about our real estate services and how we can help you find the home you’ve been looking for.