The Psychology Of Real Estate, Housing & Home

House And Home, Real Estate

Welcome to my blog on Toronto real estate, culture, and design. Today I wanted to further explore one of my favourite subjects: the psychology of housing and home! It isn’t a topic that a lot of realtors focus on, yet I consider it to be one of the most critical influences on our purchasing and selling decisions. In fact, the psychology of housing was part of my Graduate Research for my Masters In Environmental Studies at York University!

In the world of Toronto real estate, more often than not, the top priority for home buyers is to ‘make the right investment’. This pragmatic left-brain activity – where the reward is judged solely on financial return – is certainly important.

That said, I often wonder if the propensity to rank future financial gain at (or near) the top of the list may potentially be at the expense of you and your family’s emotional well-being.

Sure, in the case of stocks and bonds, your profit margin ultimately depends on your capacity for risk and volatility. And, in fact, prudence says one should distance oneself from their emotions to make these kinds of investments.

However, when searching for a residence for your personal use, isn’t making an emotional connection an essential requirement if that residence is to serve you well? I would argue that engaging the emotional right side of your brain is an essential state of mind if you are looking to buy a Home rather than a House. To truly nest, the heart should be entitled to prevail over – although not entirely eclipse – the head.

I believe the happiest home buyers have the capacity to dial into the importance of making an emotional connection to their future home, even if it supersedes some of the pragmatism of logic. But to what extent is this a good thing? And should it matter in changing market conditions?




How Often Do Emotions Factor Into Real Estate?

Real estate represents different things to different people. These include the opportunity for investment asset growth, the need to meet one’s practical needs and necessity of securing shelter and the chance to create a “Home”. Because the ranges of needs, wants, and wishes vary dramatically, you may end up “falling in love” with a potential home, led by your heart, or you might make your choice based on a specific set of practical criteria. For me, combining securing a dwelling which fits a pragmatic checklist of logical features (like space, configuration, neighbourhood and price point) is important, but it shouldn’t be without the value of how a property makes you feel.

It’s not just the visual that grabs homebuyers by the heart; house hunting is actually a multi-sensory experience. Sounds and smells (even those you aren’t acutely aware of) can trigger a response when you are looking at a home. You may even tap into other memories (i.e. if a home’s layout or décor reminds you of somewhere you’ve been in the past – good or bad). The other danger is that you respond viscerally to your emotions, which means that you may already have made a decision and become psychologically invested in a home before you’ve even had a chance to rationalize the pros and cons of the home that you are looking at.

A study done by the Journal of Advertising Research shows that emotions outweigh rational thinking 2 to1 when it comes to consumers evaluating purchase decisions. Think about advertising for any kind of product. Which do you respond to most strongly? Those that you connect with on an emotional level (happy, sad, etc.). And think about the experience of viewing a home – which is ultimately about a home advertising its merits to you, the home buyer.

I’m fascinated by how your personal history can influence your response to a dwelling for sale, the efforts developers go to create a ‘Model Home’ – which is both aspirational while attempting to instill a sense of belonging (hopefully) – and how the first thing Buyers often do to infuse their own energy into a space starts with cleaning. I wrote about this in Dear Urbaneer: How Can I Make An Emotional Connection Through my Home?.

Here are some other good reads on this subject:

The Psychology Of Buying A Home: Why Do We Love One Place And Not Another?

The Psychology Of Buying And Selling A House

and “Marketing Real Estate: How Successful Real Estate Companies Market Their Properties”.




Buyer Beware (Or Buyer Be Smart)

While there is nothing quite like the warm and rosy glow that comes when you’ve found the one, the savvy homebuyer recognizes the role that perception and ergo, psychology, plays in finding a home appealing, making a purchase decision and then deciding on how much you are willing to pay.

When a homebuyer lets the emotional side of the process take priority, then you potentially ignore important factors. And also recognize that your brain (although well-intentioned) plays tricks on you. Your selective perception of information when you examine something emotionally serves to act as a tool to confirm your preconceived bias. In this case, how the home in front of you matches up to your idea of “Home” in your mind’s eye.

That perception is powerful and can cause you to overlook things like time and money you need to renovate a home, structural or other issues, questionable location and more. That is why every Buyer should approach their search with a greater injection of logic, including the critical importance in Understanding The Six Essential Layers Of Property as they prioritize a purchase.

For example, the mantra of real estate price appreciation is tied into “location, location, location”. That’s because Buyers will always pay a premium for proximity to amenities like transit, shopping, and schools. If the object of your affection (i.e. the home you’ve got your eye on) doesn’t subscribe to these ideas, you may be running the risk of eroding your investment opportunity in the longer term (and remember, real estate is always about the longer term). Here’s my piece that identifies the 7 Factors That Signal A Winning Location. However, there’s a real possibility your budget may not align with locations which garner a premium. Here’s one post worth reading if you’re trying to establish whether you Should I Sacrifice Location To Get More House?

Another important factor in assessing a potential property purchase is to determine how will your prospective home’s location, size, and configuration support your lifestyle? Reflect on how the dwelling you’re considering (and its acquisition and future operating costs) will help you foster and support relationships with your neighbours, friends, and family? It’s essential to think about how your life will unfold in a Home. Does Home help or hurt these things? Is it worth it?

Let’s say that you find a home that you absolutely adore, but it means that you’ve got to spend a significant amount of time commuting, which is going to detract from one or more of a few essential things in your life: time with family/friends, leisure/exercise/hobby time and sleep. Is this dwell dreamy enough to compensate day in and day out for the sacrifice?

I’ve written about the emotional, physical and financial costs of commuting, which is quickly becoming a major factor for Toronto homebuyers. Click here to read “What Are The Real Financial, Emotional And Health Costs Of Commuting?

When you place your emotional response to a home under the scrutiny of a more clinical lens, it helps to frame your purchase decisions, which is an important part of making a smart buy.




Maslow And The Hierarchy Of Needs

I’ve talked before about Abraham Maslow and his model and how owning real estate appeals to human’s physiological and physical need for shelter. The idea is that we, as humans, gravitate towards fulfilling needs, which are achieved in succession along a hierarchy. The way that housing falls into this is that housing (and ownership of it), nurtures the five needs that Maslow presents: shelter, safety, and security, love and belonging, self-esteem and self-actualization (in that order).

Real estate provides in a pragmatic way shelter and an investment opportunity, but also extends tools to help home buyers achieve those intangibles around status, security, and self-expression, which adds yet another psychological layer to both the buying and selling of real estate.

Click here to read my posts on Maslow :

Maslow’s Hierarchy Of Needs And Toronto Real Estate For Sellers

Maslow’s Hierarchy Of Needs And Toronto Real Estate For Buyers.




Biting Off More Than You Can Chew

If emotions weigh too heavily into a purchase, there is always the possibility of biting of more than you can chew, whether it means buying too much home, overshooting your budget or tackling home renovations that exceed your comfort. This can result in becoming house poor, making extensive lifestyle sacrifices that might be challenging to maintain in the long term, or throttle you with disappointment and buyer’s remorse, particularly when it comes to buying a fixer-upper, when renovations bring more stress than you’d expected.

In all of these cases, employing a sound strategy based on data, research and some good perspective can help you make a smart buy that makes sense emotionally and financially.

With buying a home that will include renovations, you are well-advised to enter into a project with a reasonable budget in mind as well as a reasonable expectation for a timeline. Don’t forget to honestly acknowledge how living through renovations will impact your daily life and determine if the mental and emotional rigours are worth it to you. Given the age and the high prices of housing in Toronto, renovations are a reality for many homeowners hoping to secure a home. It’s not to say that you should avoid fixer-uppers in favour of the turn-key home, but like with everything else during your house hunt, it is to your benefit to combine planning, pragmatism to ground your emotional response.

The same goes with setting your budget for your house hunt. Recognize that if you are pushing your mortgage loan to the max and saddling yourself with other household debt to cover costs and expenses, you’ll have to sacrifice elsewhere – whether it is in your lifestyle, other purchases or with other non-real estate savings. Is it worth it, day in and day out in order to have a showcase kitchen?

The answer is to be able to compromise and to be patient in your house hunt. It’s about reconciling needs and wants as they measure up in the moment of for your longer term future as well.


Here are a series of Urbaneer posts about the ups and downs of renovations and the risk of buyer’s remorse:

Tales Of Home And Buyer’s Remorse

Move-in Ready Or Fixer Upper? What’s Your Housing Match?

How To Renovate And Keep Your Relationship Intact


These posts of mine discuss staying the course with your house hunt strategy, regardless of the emotional challenges brought forth by market conditions, FOMO or even the impact of media design on your housing wish list:

How Your Obsession With Design Media May Be Hampering Your House Hunt!

Why Buying A Home Can Be Emotionally Exhausting!

When Expectations Make It Hard To Buy The House You Want

Behold The HGTV Effect On Toronto Real Estate




The FOMO Factor

For Buyers, the best time to buy a Home is when no one else is buying, because you have the gift of time and critical thinking to assess your purchase and how it fits into your long term goals. However, in a market like that in Toronto where bidding wars are part of our real estate landscape, time is not something that Buyers always have had on their side. Even in a transitioning market Toronto still sees bidding wars and bully offers. Here’s a recent post of mine that offers a critical approach to valuing real estate called Understanding The Four Values Of Real Estate For Bidding Wars And Bully Offers In Any Market Climate.

Not only have Buyers in Toronto had to deal with dwindling supply and skyrocketing prices, but many have also been active participants in a real estate psychology phenomenon that has been so significant, it has actually impacted the market and contributed to swift and steady price appreciation. I’m talking here of course about the Fear of Missing Out (FOMO). As prices climb and supply becomes less the intensity of that fear ratchets up.

Buying a home is intensely emotional for anyone in any market, because of the psychological attachment. When you add pressure to that emotional connection with tight supply, low-interest rates, the market moving at a fevered pitch and bidding wars were the norm, that emotional connection quickly morphs to fear. In this case, it is fear of missing out on the market, of never being able to get in and that sense that your housing ship mail have sailed forever unless you secure your spot today. Fear evokes a visceral reaction, which focuses entirely on the moment (fight or flight). FOMO has incredible strength and ability to separate people from their logical assessment of a property. Things like budget, property inspection and even the concept of debt are pushed directly to the side as the homebuyer focuses on the task at hand and is willing to do what it takes to secure a purchase.

The problem here of course, is under the force of FOMO, people are making transactional, emotional decisions on what are ultimately long term investment decisions that will impact your entire lifestyle, financial and mental health for years to come.

As the constrains of supply and demand began to ease up in the spring after the Fair Housing Act took place, buyers were able to take a breather a little bit, but no question FOMO is still present; home ownership still exists as a goal for many, suggesting that it may be steady demand as opposed to tight supply that is continuing to heat the market.

Thankfully, a new study suggests that there is pragmatism being injected into the house hunt though, with some Millennials, seeing a slowdown in the market in the past spring, pressing pause on their own housing hunt because of concerns about long-term affordability. They are also trying to find other ways to reduce the costs of homeownership is such an expensive market, like increasing down payments or renting out part of their homes to reduce the debt load. For more on this, click here to read:

Legendary Fear Of Missing Out’: Millennials Aren’t Writing Off The Home Ownership Dream Just Yet

Demand Fuels Toronto House Prices, Not Lack Of Supply, Study Finds

and “How The FOMO Factor Is Still Gripping The Toronto Real Estate Market”.

The moral of the story is that Buyers must still, in order to make a smart buy, due their due diligence, no matter the market conditions. Not doing so means buying at your own financial and emotional peril, possibly.

Incidentally, did you know I – and the Urbaneer team – are more likely to dissuade you from purchasing a dwelling we think it’s lacking some critical requirements or isn’t fully matching your needs? With decades of experience that can help temper the psychology of real estate, we’re invested in your future happiness with your home. Here’s some of Urbaneer’s past clients sharing how we gently steered them without pressure or hassle in Urbaneer’s Testimonials.




Sellers Are Impacted By Real Estate Psychology Too

Psychology figures heavily into the picture for home Sellers as well. If Buyers are seeking that experience of “Home”, Sellers are uprooting themselves and their experience of “Home” in a given dwelling. It’s hard to place a price tag on intangibles in that sense.

Sellers have the challenge of overcoming their emotional investment in their home to price it appropriately. They may have unreasonable expectations of what they can expect to fetch in the open market, which means that they stick to their guns price-wise, which is not only stubborn, it is a decision riddled with the consequence of missed opportunity.

This is in part why forthe seller, two very pragmatic activities should be at the crux of their selling strategy to support both an expeditious timeline and fetching top dollar: embracing my Strategies To Help Sell Your Home, and a comprehensive understanding of current market conditions.

Home staging neutralizes a space while elevating it using finishes and furnishings which are on trend, signalling to buyers the dwelling will fit our contemporary lifestyles. It also serves to detach a seller’s personal attachment to the space. At Urbaneer, we like to fuse the best of both worlds by offering our Style Enhancement Services, which combine the seller’s items with some from our own cache. We like this approach, as our objective is to never eradicate the patina of a well-loved home, but to enhance it with pieces that reflect the fashion of the day, which will lure buyers who are often well-versed and influenced by our HGTV culture. After all, if you’re looking to buy a new Home, you’re likely reading the latest shelter magazines and watching HGTV television programs. I wrote about this in Behold The HGTV Effect On Toronto Real Estate.

Having a sound knowledge of the market helps price your home appropriately, as well as showcasing certain features and benefits that will be sure to snag your target market’s attention. Psychology may win them over once they get in the door, but positioning your home well in the market will bring the traffic there.  Click here to read my past post How Sellers, Buyers And Realtors Are Adapting To A Shifting Real Estate Market.

Selling your Home isn’t an easy process, but we don’t recommend isolating your heart completely from the experience. In fact, garnering top dollar requires offering your Buyer an emotional connection as part of the value of your property. By presenting your property in its best light with full disclosure as to its condition, a smart, prudent Seller will faciliate a smooth real estate transaction. In case you missed the link above, check out Maslow’s Hierarchy Of Needs And Toronto Real Estate For Sellers




Want to have someone on your side?

Since 1989, I’ve steered my career through a real estate market crash and burn; survived a slow painful cross-country recession; completed an M.E.S. graduate degree from York University called ‘Planning Housing Environments’; executed the concept, sales & marketing of multiple new condo and vintage loft conversions; and guided hundreds of clients through the purchase and sale of hundreds of freehold and condominium dwellings across the original City of Toronto. From a gritty port industrial city into a glittering post-industrial global centre, I’ve navigated the ebbs and flows of a property market as a consistent Top Producer. And I remain as passionate about it today as when I started.

Consider contacting me at 416-845-9905 or email me at It would be my pleasure to personally introduce our services.

We’d love to introduce our services to you.

Serving first and second-time Buyers, relocations, renovators, and those building their long-term property portfolios, our mandate is to help clients choose the property that will realize the highest future return on their investment while ensuring the property best serves their practical needs and their dream of “Home” during their ownership.

Are you considering selling? We welcome providing you with a comprehensive assessment free of charge, including determining your Buyer profile, ways to optimize your return on investment, and tailoring the listing process to suit your circumstances. Check out How Urbaneer’s Custom Marketing Program Sold This Authentic Broadview Loft In Riverside to learn more about what we do!

Consider letting Urbaneer guide you through your Buying or Selling process, without pressure, or hassle.

We are here to help!



Thanks for reading!


-The Urbaneer Team

Steven Fudge, Sales Representative
& The Innovative Urbaneer Team
Bosley Real Estate Ltd., Brokerage – (416) 322-800


– we’re here to earn your trust, then your business –

Celebrating Thirty-Four Years As A Top-Producing Toronto Realtor


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