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See also: Renting vs Buying
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Everyone dreams of buying a home. For most of us, it is the penultimate goal in adulthood, sitting closely behind kickstarting your own family. That said, buying a home is never a straightforward process, as there are a lot of hurdles that one must overcome before doing so.
Unfortunately, before we can get there, we are stopped dead in our tracks. One of the two biggest obstacles that stand between us and homebuying is financial (il)literacy. In fact, 70% of Malaysians were found to be financially illiterate, which means it’ll be a long way to go before any of us will get there. Financially literacy, loosely defined as the ability to manage one’s money, is important because it is quintessentially the gateway to affording a home in life, among many other luxuries.
The late singer Prince once said this, “Money can’t buy you happiness, but it’ll pay for the search.” A sentiment many adults can relate to, we’re sure. It doesn’t help that we are living in a world that preaches “inner contentment” over materialistic possession & societal approval either. No, we’re not saying that you should work yourself senseless to afford a home, but it would be foolish to deny the pivotal role that financial literacy and money play in our lives.
The other major obstacle that stands in our way is the lack of homebuying basics. Yes, property literacy amongst Malaysians is surprisingly low and sad. Property literacy and financial literacy often go hand in hand too, so it’s safe to say that there are a large number of Malaysians out there who might be less informed when it comes to buying a house.
Even without any statistics or numbers to add to the topic, the number of homebuying guides targeted at Malaysians on the internet should speak for itself. Put simply, many of us can’t manage our finances well, neither can we achieve our homebuying dreams with ease.
We’re sure you’ve read your fair share of homebuying guides already. So instead of boring you with things you already know, we thought we would focus on the lesser-known things, like the psychology of buying!
Let’s get to it.
You might be thinking… Duh! But let’s see you’re on the same page with us. When talking about buying a home(s), our mind tends to wander off to the big picture – Money and Mortgages. True, these two play a determining factor in how, what, and where your new home will end up looking. But we’re talking about getting to know the area surrounding your home, the people, the roads to name a few.
For starters, spend time visiting the place that your future home is located. Observe the traffic, make multiple rounds and note the difference between morning, afternoon and night. Is the area massively congested in the morning? How does it compare to some of the densely populated areas in Klang Valley? How long would it take for you to get to work with the state of traffic you’re in? What about nighttime, is it dead quiet at night? Is it considered a safe area?
If the place is a rather serene neighborhood with some lush green trees, make time to run through the neighborhood. Breath in the air, hark at the community. Some may prefer a more expatriate-friendly community, others find themselves at home with a suburbia-like setting.
Next, check out the entertainment hubs within the vicinity. How close is the nearest mall to your home? Do you have access to a wet market to procure your fresh groceries? Or will it be store-bought groceries every weekend? Does the place boast a great selection of eatery? Or will the lack thereof be fine with you.
Oftentimes, we harp on the price tag and the years it’ll take for us to pay off the mortgage that we forget about the rest. By the time you have already made the down payment and committed yourself to a lifelong tenure, you may be having second thoughts about the purchase. You don’t want that. Our advice, put aside the price tag for a bit and be one with the place.
Think about it… Would you rather live in a moderate-cost home with a serene neighborhood, or a bourgeois one but with a less-than-ideal environment? Some may prefer the former, others the latter. But if you can’t imagine yourself living happily in either one, then it might be time to look elsewhere. Knowing your environment, both in and outside of your home is important, period.
Everyone wants to buy a home, but the bigger question is – Why do you want to buy a home? People buy homes for a myriad of reasons, and there is no right and wrong answer to the question. However, purchasing a home for the wrong reasons with the wrong expectations never bodes well for anyone.
Are you purchasing a home because that notion has been drilled into you from young? Are you peer pressured into buying one because everyone else seems to be doing it, yet you aren’t? Or are you doing it because you genuinely want to own a home and desire a private space for yourself? Maybe you would like to turn your home into an AirBnB and capitalize on the tourism industry, have a side income? Some people buy a home because they wish to build equity instead, which is a long-term investment and a sound enough reason on its own.
Say you’re looking to profit off your purchased property, either by turning it into an AirBnB or simply building equity. That opens up a different list of responsibilities that you need to take note of. For instance, turning your unit into an AirBnb would involve doing a deep dive into Malaysia’s property law.
These are all fundamentals that require looking into before you set out to turn your place into a mini-suite.
Likewise, the same could be said for building equity, which involves maintaining your home value and ensuring it stays stable for many years to come. Building equity itself yields its unique set of concerns.
Then there are also indirect factors that play a key in keeping the equity afloat, such as upkeeping, maintenance work. Having to fork out money every half-yearly to keep your place up and running smoothly is a chore on its own, and demands a good chunk of your salary. Are you prepared to put up with that dread?
Sensibility is a must when purchasing a home, as is tampering your expectations. The sooner you can properly identify your reason(s) for getting one, the quicker you can mentally prepare yourself for the future challenges that may present itself.
Emotions are a huge part of consumer psychology. We’re sure you’ve been to a property showroom before. It’s always lovely to look at them and fantasize about your future living space. But it is also worthwhile noting that many people tend to fall prey to the ideals of homebuying and lose themselves in the moment, including ourselves. The property market is highly competitive, and developers employ a repertoire of marketing tactics to capture buyers’ attention.
Some of these tactics include but are not limited to:
Let’s take a brief look at them.
Nostalgia breeds familiarity, and familiarity breeds comfort. This makes nostalgia marketing an incredibly potent tool to encourage emotional spending. In property marketing, this is accomplished through a set of visual cues designed to evoke that feeling. Think furnishing, the accompanying paraphernalia, the tiles, or wall design elements to name a few.
Picture courtesy of atap.co
Does this picture remind you of the time you spent in the UK?
Nostalgia means differently to everyone, and it sparks a unique range of emotions in us. Take the picture above. For some, the brick wall may remind them of their childhood home. For others, the living space stirs up one’s good ol’ memories of their time abroad. Some may find themselves thinking, “Yeah, this could be my home. I want it to look like this!”
Long before you know it, the image will be lodged deeply in your mind, you will be looking at your finances and thinking if you can afford a place. The goal is to elicit a train of positive emotions. So long as you’re thinking about it, even if you don’t make a purchase in the end, the developers have won half of the battle.
Visual merchandising is the complete opposite of nostalgia marketing. Whereas nostalgia marketing taps into the past, visual merchandising focuses solely on the present. The end goal for both tactics is the same, to elicit positive emotions, but the process is vastly different. Visual merchandising is all about wanting it now. Apart from that, it focuses on aesthetics and impression, as opposed to sentimentality.
Picture courtesy of Essential Home EU
Picture courtesy of recommend.my
Surprise, surprise! This came from a bungalow in Klang Valley.
Picture courtesy of Caitlin McCarthy Design
When it comes to visual representation, many businesses focus on the following elements to make their product eye-catching – Lighting, Angle, Placement or Positioning. All of which the above pictures boast.
It’s important to remember that the decors you see in a showroom are sponsored or rented by developers from various home furnishers to spruce up their showroom. Most times, 70% of home décor that you see will never make it into your living space, and at best, half of them are novelty items, which means they serve no purpose other than looking pretty.
When it comes to visual cues, it’s always good to see it in the flesh. Consider switching up your angles and learning to look at things from a different light. Especially in a home tour, property agents will only show you the angles they want you to see. It always helps to ask the property agent in charge for permission to roam around the place on your own, without being tailed around for a change. Maybe then, you just might realize not everything is at it seems.
Writing can evoke certain emotions that images can’t. Despite the fact that we live in a very visual world now, writing and visual elements go together; they complement one another and work in tandem to depict products in the best light possible.
Consider the following images.
Picture courtesy of Brand New Copy
Picture courtesy of Re Tipster
These are two extreme examples. A horribly written property listing doesn’t have to be clickbait-y, tacky or cheesy all the time. As long as it is bland, incapable of speaking to its audience, or retaining attention, it is a bad ad copy. Here’s a more relatable example for our readers to compare.
“Senada Residences is a golfer’s dream come true. Its residents enjoy the full package of benefits from the property, from convenience and practicality to exclusivity and stature, truly making it a world removed from urban KL, and it is easy to get lost in it.”
“Senada Residence is located at Taman Tun Dr. Ismail. The place is an up-scale residence that includes a golfer’s field. Property prices here fetch an average of RM700,000 and the neighborhood here is good.”
The first write up may not convey the information at point-blank, but it is inviting enough for you to want to read on. Meanwhile, the second write up is straight to the point, but lacks the ability to connect with its audience. Assuming the location, price and amenities are a turn off for the readers, they may very well be put off from reading further. Essentially, you have already closed the door on the developer before they’ve even managed to reach in.
Writing helps to ground hard-to-describe feelings by cementing them into words, and they add onto the already-great impression that homebuyers may have of the property listing. In fact, they may very well be the one last thing standing between a successfully sold property and an utter disinterest from buyers.
Developers and property agents are a huge fan of such “promotional” sales tactics. If you’ve ever had property agents tell you a string of words along the lines of – “Pre-launch,” “Early bird discounts,” “Mid-launch,” “Phase One,” “Phase Two,” or “250 units to go!” Make no mistake, these are commonly used phrases to attract potential buyers to look at their units.
Urgency or scarcity is a great way to compel individuals to purchase their desired property quickly, especially if they’ve been eyeing on them for a while. At which point, they’re willing to throw logic out of the window and hastily make a down payment. Ironically, these promotional tactics are merely a marketing gimmick to get buyers’ attention most of the time, without actually promising some of the benefits stated.
Fear of missing out is a powerful feeling, and it can be difficult for people to ignore it when it’s constantly hounding at you. If you can understand the psychology behind these feelings however, you will have an easier time making a sound decision. Purchasing a property on a whim is never fun, and the last thing you should do is allow fear to dictate your spendings.
Exceptional customer service is a thing of the past, especially when the property market is rife with competition. These days, most property agents are willing to go the extra mile to make you feel at ease and comfortable in a showroom. That said, some people still place great importance on customer service, and sometimes, it may be the deciding factor in whether one chooses to purchase a property.
There’s not a lot to add to this. Going the extra mile for your customers will likely yield some form of rewards, and property buying is a form of salesmanship. If the service is exceptional, people are more than happy to patronize and seal the deal.
Remember though, you shouldn’t buy a property just because the property agent was exceptionally cordial to you, or that they went the extra mile. At the end of the day, your personal preference needs to have a say too.
We all want to be self-made individuals who can stand tall and tell people we bought our homes without any financial support. But sometimes, certain circumstances in life prevent us from fully realizing that, and the road to owning a property is a bumpy ride for many of us.
Unfortunately, society tends to ridicule people who receive financial aid from their parents or the government when it comes to buying a home that people rather shoulder impossible financial obligations than seeking financial aid. There is no shame in receiving additional funding from your parents to afford one. You do not have to feel embarrassed for signing up for affordable housing schemes. Above all, there is no need to be ashamed for being financially prudent.
In fact, the government wants you to sign up for affordable housing schemes because it helps create job opportunities and improve the economy. Also, if you’re one of the few handful of individuals who have parents offering to chip in for your home, consider yourself lucky. Not many families have the capacity to do that, and many wish they could better provide for their children.
Let’s say your parents do not have the financial power to support you, which means you’ll now have to fork out every single penny from your pocket if you want your own place.
By spending within your budget, we don’t mean going for a house that costs RM1,000,000 when your paycheck only amounts to RM3,000 a month. We’re talking about actually keeping strictly to your allocated budget and spending on what you came for. Say your dream house fetches a price of RM350,000 at 750 sqft now, but the property agent recommends going for a larger unit that is priced at RM400,000 with a 950 sqft unit. In their words, an additional RM50,000 goes a long way.
On paper, it might sound like a catch to spend extra. For an additional RM50,000, you get a place that is 200 sqft wider. But take a second and think if it is necessary to spend that amount at all. Do you have what it takes to tank the additional cost? The additional cost may set your tenure by an additional 5 to 10 years. Would you want that?
If you have the financial power to do so, spending extra is totally fine. But if you’re not at a financially sufficient spot to tank the additional cost, or “upgrade” to a better unit, perhaps it would be better to work out your spending power before you make that leap of faith. Try attending a financial literacy class and determine if you can afford all that.
Instead of spending an additional amount hastily, perhaps it would be more helpful to maintain discipline and keep to your budget.
Buying a home should not be a race but society makes it sound like one. Many of us set a timeline for ourselves and frantically scramble to buy one in fear that we can never pay off our mortgages if we are past that timeline. Most times, this leads to long years of regret and a point of no return.
If you’re at an age where everyone around you seems to be buying a home yet you aren’t, there’s no need to feel discouraged. Everyone reaches their goal in their own time and that’s okay. Sure, most mortgages might reject you if you exceed the maximum age by the time you’re nearing the end of your mortgage, but there are numerous options out there that allow you to extend or pay your mortgages flexibly i.e.: joint loans, and a second-generation loan. Some schemes out there even offer a 10% discount and stamp duty waiver if you catch them at the right period.
It’s perfectly fine to never buy a home and resort to lifelong rentals if you’re not ready to afford a home, though lifelong rentals will pose its own set of problems. And, if you have the privilege of having parents who are supportive and non-toxic, perhaps it might not be such a bad idea to reconsider your plans of moving out.
After all, buying a home is a huge thing.
Hooray! You’ve finally purchased your home. In spite of all the hardships and long fought battles to afford one, you’ve made it to the finishing line. Now, a new challenge awaits you – Seeing through your mortgages and building the home of your dreams.
People are oddly negative about buying homes because they fixate on the costs incurred and how much they frequently set you back by X amount. We’re here to advocate against that. If you have made the big decision to purchase your home, learn to enjoy the process instead.
The money has been spent anyway, and the construction is underway. Regret is pointless. Instead of beating yourself up over your “poorly made” decisions, find joy in watching things come to life. Sometimes, you may even find yourself learning a thing or two about property in the process.
Watching an empty space grow into a place that you can finally call home can be therapeutic and exciting. It’s a bit like raising a child. At times, it’ll be demanding and stressful. Some days, you may question your decision. But there will also be days where you will marvel at your place and realize it has budded into an everlasting home. If you can hang tight, the experience will always be rewarding.
There is certainly no need for you to impose a timeline on yourself when it comes to buying a home. Making such a big decision often requires careful consideration and deliberation. When you are ready to purchase a home, the journey of watching your home come together will be a rewarding and unforgettable one. Buying a home is more than just money and a mortgage. Mental preparedness also plays a role in the matter. Instead of rushing the process and potentially subjecting oneself to long years of regret, one should reflect on their choices and determine if one is psychologically ready to afford one.
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