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The Role of Emotions in a Residential Real Estate Investment

tHE ROLE OF EMOTIONS IN a real estate investment

A residential real estate investment b is an emotional decision for most. Not just in India but for people across the world.

A real estate investment involves a substantial amount of money that is earned after a lot of hard work.

Stocks, bonds and fixed deposits do not evoke such emotions. A home is a refuge from everyday troubles for every person. It is where one raises a family and makes memories.

My favourite part is when the whole family comes for a visit and discuss where they will keep their furniture.

Almost 80 % of the people I meet are end-users who are buying their first home. Rest 20 % of people are multiple investors. For example, I meet many Army officers who have bought properties to create rental income.

In this blog post, I am going to write a few points about the role emotions play in a real estate investment. This blog post like all my blog posts is based on my experience dealing with customers seeking homes in Zirakpur and Mohali.


Pain is one of the most compelling emotion that drives people to buy homes. For example, many people are going through family troubles such as joint families selling their property and going their own ways. Paying rent for many years is another pain point that many people want to get rid of.


In an emerging trend in the Tricity, Elderly people with big houses in Panchkula, Chandigarh or Mohali are selling their houses and buying apartments due to a better & secure environment.


The promise of improved finances, better economic situation, business doing well, a sudden promotion drives many people to buy houses.

Social & Peer Pressure

Buying a house is considered a prestige issue. Young people face pressure from family and peers to purchase a house.

In a close-knit society like ours, family pressure and support is another driving factor for people to buy homes.

Some investors create assets such as apartments to create rental income and capital appreciations. These decisions are also based on emotion to create wealth and financial security.

Do not let emotions drive your decisions

While one cannot rule out the emotional component of home buying, one needs to understand that at the end of the day buying a house is a financial transaction.

Analysis paralysis is a common phenomenon that one encounters when emotions are driving your search for a home.

You may end up buying the wrong house or an expensive house just because you like it or inventory was “limited”. Professional help can help in making the right decision but be careful of who you choose.

5 Things that can help emotional buyers

I am saying again that home buying is a fun decision and that you should enjoy the journey. Never take decisions under pressure. Never finalise a house in the first sitting. Never finalise just because the salesman is pressurising you.

Take your time, Knowing these 5 things will help emotional buyers:

  1. Get pre-approved for a loan and know your budget.
  2. Know that you will never find the perfect property. Be ready to make compromises.
  3. Emotions are actually very rational. They can help but do not be in a hurry. Take your time and do not make decisions in a hurry.
  4. Speak to a professional and trust the advice.
  5. Never commit on the first visit.

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