False information affecting Consumer Buying Decisions

Every day, consumers face a flood of information when deciding what, when and where to buy. Unfortunately, most of this information regarding home-buying is out of date or note reflective of the local are. False information can create doubt, confusion, and hesitation, leading many buyers to delay or abandon their purchases. Understanding how false information affects buying decisions is crucial for savvy buyers.

How False Information Spreads and Reaches Consumers

The most prevalent news affecting home buyers is what they see on-line. This typically comes in the form of sound bites and is repeated for months at a time with no context or verification. Before you know it, whatever was posted is now believed to be true, yet most of the time, it is highly inaccurate (at best!).

Why False Information Causes Buyers to Hesitate

When buyers encounter conflicting or false information, several psychological effects come into play:

• Loss of trust in the news/government:

• Fear of making a bad choice:

• Overwhelm from too much information:

• Decision paralysis:

  
  

We see and hear this daily in the Space Coast home-buyers' market. The data shows that homes are not over-priced, they do appraise (which is a n independent evaluation of value), and they are in good condition unless explicitly stated to be a renovation project. But buyers are taking a lot longer to make a decision because of the mistrust, fear, or decision paralysis, so homes are sitting longer. Some people conclude - well.... then they are overpriced. But put yourself in the seller's shoes: Would you intentionally sell your home less than what it would appraise for, specifically to find the buyer that wants to spend the absolute least? Some might (if they are in financial jeopardy), but most won't. So let's walk through some myths that might be causing you to wait unnecessarily:

Real-World Examples of False Information Impacting Purchases

Myth 1: House has been on the market for a long time, so it must be overpriced or there is something wrong with it.

This is by far the most common, and the most incorrect on many levels. As discussed above, buyers are mistrustful for a variety of reasons and not making decisions quickly, causing homes to remain on the market for longer durations. Making your decision based on the fears of others is not in your best interest. Instead of purchasing a home you love because you think other people you've never met, know something you don't, is not advised. No one else knows your family, your needs, your style, your finances, etc. Nor do you know theirs. What one person loves, the next person hates. What fits one group, does not fit another family. It's just a practical reality. So would you think a stranger knows what's best for you?

Instead: Hire professionals that look out for your best interests. A licensed realtor is your fiduciary, meaning they put your financial best interest before their own. Hire a great inspector that educates you and makes sure you know all of the nuances and quirks of your next home. (no home is perfect). Call the schools if needed rather than relying on an angry parent sway you out of an entire area. And trust yourself that you know what's best for you, your family, and your situation.

Myth 2: Florida real estate is having a lot of issues.

Most Floridians see what is written in the headlines or on social media and we chuckle a little because 1. we LOVE living here and 2. the negative statements are almost always overblown. Here's a few objective data points:

a. Florida is consistently in the top 3 states for real estate both in the number of transactions and the volume that exchanges hands.

b. Florida typically ranks #1 in the state with the most 2nd homes. vacation homes.

There is a reason why. Florida will always be a desirable state. It just offers too much beauty and a lifestyle that's so amazing, you just can't ignore it. But let's go through some of the concerns we hear from folks:

Hurricanes

Florida does experience hurricanes and tropical storms. Our season is from June -Dec. Similar to October - May up north, a storm could come at any time and we prepare for that. Building codes are changed over time to improve on a continual basis, particularly as it relates to roofs. Roofs are replaced more often than in other states as this is a primary protection and keeps insurance rates lower. And we all help each other through hurricane prep if and when needed. Thankfully, Brevard County has been spared from any significant damage.

Insurance

Insurance is often an area of concern because of the headlines. Depending on what state you are coming from, you may pay higher or lower for homeowner's insurance in Florida. The state did go through a difficult time several years back because of a lack of carriers. But that has been consistently improving year over year. Again, the roof is the primary driver of the cost of insurance. So when purchasing a home, it's advisable to seek one where the roof has been replaced within the past 10-15 years (for shingle roofs). Separate from homeowner's insurance, it is also recommended to get flood insurance. This insurance covers rising water (even from a rain storm),

Taxes

Again, depending on where you are coming from, taxes may be higher or lower. However, we consistently hear that most people experience much lower taxes in FL. Some advantages include no state income tax, homestead tax exemptions for your primary home, and reasonable sales tax. This is one on the reasons so many employers have a presence in Florida

Construction

Florida offers both frame construction and concrete block construction for most homes. For the most part, there is no difference in insurance and no difference in appraisal value. Again, those are related to the specific condition of the home and how the roof is attached to the structure. Some people think new construction is the most stable, while most beach-side dwellers will argue that the homes built in the 50's and 60's have been through everything and hold up like a tank. Either way, your inspector will help you evaluate this.

Starting to feel a little more comfortable? Give us a call. We would be more than happy to provide you with the information you need to make a decision you feel good about.

321.693.3480