I believe it must be a human innate thing. There’s no other explanation, I think, that tells how certain behaviours are simply self-destructive actions. It doesn’t matter whether we are talking about smoking, drinking, gambling, or the like.
Let’s look at the real estate angle on this: homeowner behaviour.
Especially now with the housing market likely to bottom out these next few quarters, perhaps this would be a good time to go over the top 3 things homeowners really ought to stop doing:
1) Focussing on things outside of their control:
There’s only so much homeowners can try to adjust. When it comes to things like: financial institutions approving bond applications, buyers stopping by with suitcases filled with cash, etc, we need to accept that these things are out of their control.
If we become obsessive about things that we have no control over, it is simply a shortcut to fear, panic and chronic stress. However, if you do feel obsessively tempted, try to shift the focus to things over which you do have (some) control: making sure every ‘i’ is dotted and every ‘t’ is crossed on the bond application before it gets turned in. Or doing your homework when it comes to sale prices in your neighbourhood, where you can eye out any seasonal changes in activity or price level, hereby improving the chances that the bond application will get approved.
2) Trying to ‘chance it’ by using tricks and shortcuts to the financial principles:
Someone walked into our new Nicolway Bryanston office the other day and asked me why he kept getting rejections when he tried getting a bond in combination with a ‘subject to sale of his home’.
As the details arose, it turned out that the house was more than his income would ever be able to support. “Tell me which right numbers I ought to use on the form so I can get the bond adjusted. Or give me the name of someone inside the bank who might get it done for me,” the man eventually told me. How’s that for being (too) straight with me?
I guess it’s an ugly side-effect of the whole banking crisis overseas where people have the attitude to think that it’s okay to try and chance the system. It’s one thing to try and go to real lengths to finish some paperwork but it’s quite a different issue when one specifically intends to massage the basic financial standards these banks put forward to avoid abuses such as these to begin with.
3) Trying to time the market:
Why is it that human beings just love to show off these healthy doses of self-esteem by trying to time the market? People who have little to no experience in certain fields (ie real estate investing) all of a sudden regard themselves as capable of correctly timing their entry (bottom of housing market) and their exit (top of the market), with most of the time, unsurprisingly, seeing the opposite actually happening.
One thing is sure: we are all better at making real estate decisions around the home when we make those decisions based on how we perceive our quality of life, family conditions, in conjunction with our personal finances, and see how these are impacted by those big decisions. That’s a much better plan than trying to time the (housing) market in order to make big bucks.
