Home buyers are ignoring major problems in bid to bag their ‘dream’ home. In research conducted by Atom Bank, respondents admitted that they had overlooked common issues such as damp, central heating, electrical and roof problems.
- 67% had overlooked the potential existence of asbestos.
- 82% admitted not looking out for Japanese Knotweed.
- More than a quarter would prioritise the decor of a property over major issues such as subsidence or broken central heating.
David Castling, director of intermediary lending at Atom bank, said: “it’s clear more education is needed for house buyers to highlight the items they should be looking for when viewing a house.”
More education is always beneficial, however the crucial point here is that the respondents already knew it was going to be a costly fix and ignored it. In this instance, it doesn’t seem like education would necessarily benefit someone who has made up their mind to ignore what they know. Education is the easy answer when the truth is more difficult to pin down.
It appears here that people are falling prey to a scarcity mindset. The scarcity mindset occurs when the mind focuses on limited resources and feel that there is too little choice. This mindset can be positive in that it focuses the mind on a goal and prioritises our choices. However it can also blind the mind to other options by only focusing on the present scarcity and overvaluing immediate benefits at the expense of future ones. In the context of house-hunting, this could mean putting greater value on details that are important to the person, rather than taking an overview of the property’s pros and cons. For example, if you are searching for a blue house, then you will discount multiple other houses despite the fact you could probably paint a more suitable house blue.
This bias is a contributor to the increasing house prices, as the scarcity mindset is fuelled by the media’s depiction of house prices increasing astronomically; and the house hunter’s perception that they will never find another house like the one they have just viewed.
Here’s how to avoid letting your heart rule your head.
- Create a pro/con list.
- Take objective friends/family along and get their opinion.
- Know your budget limits
- Before house hunting, create a priority list of must haves – and stick to them.
If you are going to go ahead anyway, after all we do rely on instinct and emotions; try to go into it eyes wide open and fully informed. By getting a survey and asking for costings to remedy all defects, you can be fully prepared for any problems.