Rule of fear: Why real estate decision is so vital, boring and worrisome
Real estate is a product category with a high involvement level. Buying a house involves a long process of self-assessment like no other product.
Financially, once one is decided, he must dig deep into his life-long savings and go through sophisticated mortgage procedures with financial institutions. It will mean 20-30 years of paying back loans and maintaining the place in reasonable condition for one to spend the rest of his life in it.
Mentally, it requires us to look hard at what our lives will be like over the next 20 years ask ourselves if this is really what we want.
With the financial burden already in place, whether you are single or married, you have to reprioritise your life because of this single decision. And that, I can assure you, takes guts.
For most people, the rest of their life is being rearranged into a new perspective with a single purchase decision. And I think this logic has been one main psychological factor that has shaped the way real estate, especially the residential segment, is marketed.
Think about it. You are talking about ending your financial freedom, prioritising your life and making sure you have enough to live on and, for some, caring for your families the best you can while paying back the mortgage.
This sounds terrifying for someone who has never bought a house before. And let me tell you, unless you are a silver-spoon-fed type of person, this kind of feeling is very difficult to avoid, because life is all about worries.
That's why the most universal trick employed in marketing real estate is a campaign based on fear and uncertainty, playing subconsciously around the ideas above.
If you were someone who somehow managed to avoid bankruptcy and bought yourself a house a few years after the 1997 financial crisis, you must have been very familiar with the idea of "pre-built" housing projects.
Have you ever wondered why it became so dominant in the minds of consumers? Have you ever considered why we have been so obsessed with this idea? The reason could not be clearer. It was because we felt secure and safe buying into this idea. A completely finished house is there before your own very eyes; why risk buying something that is not yet built? Now you're getting the idea.
Fast-forward to the present, and I think this obsession is still at work. We live in a society based on a simple life, unlike in the West where risk is more encouraged and embedded deeper in people's lives.
Ask yourself when you are looking around for a new home and try to think of the first few criteria that pop into your mind. I bet that besides location and price, they revolve around the developer's credibility and trustworthiness, and a few more that make you feel secure and safe.
In all promotional materials, people would rather see the script below the main visual saying "photo taken on actual location". People flock to the developer's website to see more pictures of the projects as well as look at the past year's financial statements. I think we have become obsessed, too obsessed to break away from this idea. Am I the only one around here who wants to break the norm? I personally think that the landscape of consumers' minds has been more susceptible to new changes and ideas than before, considering the many new trends and ideas that have been adopted by people in recent times.
With the rise of same-sex marriages, young and restless couples without kids, electric vehicles, entrepreneurial spirit, crowd-sourcing, etc, I think the timing has never been more challenging for us to reassess our own mindset and find a way to tap into consumers' minds and converse with them in a smarter manner.
Because life doesn't need to be boring. Nor does the real estate business, does it?