Here’s how my brain works (or not).

I try to write one post a week for this blog and usually have no trouble coming up with topics. This week was a little different. Even though I kept coming up with topics, none of them seemed good enough. I don’t want to write about any old thing. I want to provide you with helpful information, valuable insights and entertaining stories. If I can’t think of something worthwhile to write about then I won’t write at all. It’s about quality over quantity. That’s the philosophy I use to guide my business so I may as well use it to guide my blog, too.

Here’s the circuitous route my brain took to arrive at this week’s topic:

Last week I showed 3 similar homes to clients. They were similar in price, style and location. One received a bully offer and sold for significantly higher than its list price. The second received multiple offers on offer night and sold for where I expected it to sell. The third also received multiple offers and sold for quite a bit more than I would have guessed. The day after the third home sold, a fourth similar home was listed and sold to a bully offer for a high price. I don’t know who bought it, but it might have been one of the buyers who made an unsuccessful offer on the third home.

Based on this scenario, I was thinking of writing about bully offers or how the market works or choosing the correct list price, but I’ve written about these already and this scenario didn’t offer enough new material to make it worth your while so I continued searching for a subject.

Then I spoke to a Realtor in Miami Beach who told me about a new condo that just sold for $64,000,000. I had trouble wrapping my head around the condo that sold for $30,000,000 last year so I wasn’t going to spend a lot of time trying to figure out the psychology behind this buyer’s decision. It’s not like the buyer bought a beautiful piece of land. Or any land at all. And I could stand on the beach, which is public, and enjoy the same view. Or I could buy a very nice condo in a neighbouring building for a million or two and enjoy the same view and convenient location. Maybe the buyer’s worth $7 billion, saw the condo, liked it and said “What the heck? What do I care about an extra ten or twenty million dollars?” Is that rational thinking? I don’t think so, but who am I to say? I thought about choosing this as a subject, but I have the wrong kind of professional designations to analyze this kind of decision making. The search for a subject continued.

I’ve spent a fair amount of time over the past year or so learning about and trying different kinds of meditation. When you’re injured and can’t play your usual sports, you look for other ways to relieve your stress. Or at least that’s what I’ve done. I read books, watch videos, use meditation apps, speak to people, visit websites and listen to podcasts. As you’ve probably already figured out if you’ve been reading this blog, I’m an all in kind of guy. Yesterday I was listening to a podcast about using meditation to alleviate the stress caused by our fears, most notably the fear of failure (FOF) and the fear of missing out (FOMO). Apparently fear causes much of our stress and these two specific fears are near the top of the list these days. As soon as I heard the speaker say this, my brain said to me “There’s your subject! It ties everything together.”

And my brain was right. If you want to understand what’s happening in the real estate market, you don’t have to look any further than fear because it plays a part in almost every decision.

The bully offer? Those buyers were afraid of losing out in a multiple offer situation. The buyers who might have overpaid? They were afraid of failing in the bidding war and of losing out to other buyers. The buyers who made a bully offer for the fourth home after losing out on the third home? They were afraid of not finding a home by their deadline. The buyers who bought the $64,000,000 condo? They were afraid it was a one of a kind condo the likes of which they’d never see again.

You can talk about low interest rates and supply and demand all you want, but if you really want to understand how buyers are behaving, focus on fear. It explains much of the seemingly irrational behaviour buyers have been exhibiting lately. But is it really irrational? Buying a home is an emotional decision. It’s not like buying a commercial property. Yes, the numbers matter, but there’s more to it than that. You have to love your home and we all place a different value on this love. This seems to be more true today than it was 20 years ago because 20 years ago the four similar homes probably would have sold for within $10,000 of each other, but today the price spread was approximately $100,000.

So what should you do? Far be it for me to portray myself as an expert because I’m a long way from obtaining my Zen Master certification. I’m continually trying to improve, but I fall prey to the same fears as everyone else.

When it comes to real estate, try to remember that it’s not a matter of life or death. Yes, you want a certain home and you want it by a certain date and you prefer not to spend your time looking at houses, but is the world going to come to an end if it takes you a little longer to find your dream home? Don’t get me wrong. We do everything we can to help our clients achieve their goals, but we often have to hold them back to prevent them from making mistakes. Don’t be afraid. Take your time and make the right decision. Everything will work out. (The only thing I’d say is that you should always keep an eye on prices because it’s possible to get priced out of the market in a rising market and you wouldn’t want that to happen.)

If you know anyone who’s looking for a Realtor who will do his best to keep them calm, who’s interested in learning how the market works and who’d like to receive the kind of help that involves honest answers, straightforward advice, no pressure and being treated like family, please let me know the best way for me to connect with them because I’d like to offer them this kind of help. And as always, don’t be shy if you have any questions or comments about this post! Thanks for reading.