Buying a home in Ontario? Survey finds half of homeowners are influenced by emotion when making Real Estate Decisions
New research by the Real Estate Council of Ontario reveals half of Ontario home owners are influenced by emotion, with younger home buyers most emotionally – and financially – vulnerable.
A new study into the behaviour of Ontario’s home owners, released today by the Real Estate Council of Ontario (RECO), paints a sobering snapshot of a sometimes contradictory experience – where rational decision-making is valued, but the heart overrules the head when it comes to purchasing a home.
Among the key findings: While more than 90 per cent rank price (96 per cent), functional fit (95 per cent), structural integrity (91 per cent) and neighbourhood quality (91 per cent) as the top factors when purchasing a home, 51 per cent admit to having been influenced by emotion when buying their home. This jumps to 64 per cent of owners aged 18-34.
“Despite the fact that Ontarians are fairly home smart, we’re seeing more and more people – especially younger home buyers – getting swept up in the frenzied market, making emotional decisions they could later regret,” said Joe Richer, Registrar of RECO. “This is why we are launching Be Home Smart – a public education campaign to remind Ontarians of the tools, resources and protection available to help them make smart home buying and selling decisions.”
This study of Ontario home owners was hosted on the Angus Reid Forum for RECO as part of the province-wide public-education campaign. It revealed that while just 15 per cent report going over budget and bidding over asking price to secure their dream home, the figure jumps to 25 per cent of home owners 18-34.
Further, first-time home owners are more at risk for costly surprises due to a lack of experience, especially when it comes to closing costs. While 43 per cent of home owners found closing costs higher than expected, this rose to more than half (54 per cent) of those aged 18-34.
“Working with a registered real estate professional will help you understand your rights and prepare for the real costs of home buying,” said Richer. “It’s all about being home smart versus acting with your heart – a message that’s particularly important for younger buyers who may feel increased pressure to overextend themselves financially to find their dream home.”
Bidding wars battle of the sexes?
Do men and women surveyed make decisions differently when facing multiple offers or a bidding war in the pursuit of their perfect home? According to the study, they do:
- Nearly three-quarters (73 per cent) of women surveyed would ask their real estate professional for advice, compared to 63 per cent of men surveyed;
- 37 per cent of men surveyed would rely on their own research and gut instinct in making their decision, whereas only 27 per cent of women surveyed would do so;
- Men surveyed are significantly more likely than women surveyed to offer below the asking price to leave room for negotiation (67 per cent versus 54 per cent); and
- Women surveyed (36 per cent) are significantly more likely than men surveyed (27 per cent) to offer the asking price.
Additional study highlights:
- Nearly half of Ontarian home owners (44 per cent) would act fast and put in an offer if they were worried that their dream home would attract multiple offers;
- Eleven per cent of those in the GTA were likely to offer above the asking price compared to only five per cent of those in the rest of the province. And 66 per cent of Ontarian home owners outside of the GTA were more likely to offer below the asking price and leave room for negotiations compared to only 53 per cent of those in the GTA.
RECO helps public education campaign highlights:
- New Facebook page: www.facebook.com/recohelps
- A Choose Your Home Adventure Facebook game: http://recohelps.reco.on.ca/cyha
- Home buying and selling checklists: http://ow.ly/uIFba
- Are You Home Smart or Home Emotional Quiz? http://recohelps.reco.on.ca/quiz
- Twitter chat with personal finance expert, author and television host Gail Vaz-Oxlade. Topic: How to make smart home buying and selling decisions, March 27, 2014, 1:00 p.m. twitter.com/recohelps
- Video series on common pitfalls of buying and selling a home and how to avoid them: https://www.youtube.com/user/RECOhelps
- Targeted online advertising