Are You Agreeable? Time to Sign on the Dotted Line

Here’s an interesting take on buyers and sellers, courtesy of a recent article in The Wall Street Journal. What you look for, what you buy, and why you make the real estate decisions you do may reflect your personality traits. In fact, you may want to look at more than your credit scores and mortgage rates when you’re making that all-important decision: to buy or not to buy. You may want to think of the kind of person you are before signing on the dotted line.

According to a study published in the Journal of Behavioral and Experimental Economics, common personality traits can be linked to the kinds of decisions you make about mortgages, home ownership, and investments.

Researchers at Tel Aviv University and Technion-Israel Institute of Technology asked participants to take a standard personality quiz focused on qualities like openness, conscientiousness, agreeableness, extroversion, and neuroticism.

Participants were then asked five questions about real estate, including their preferences for the type and length of a mortgage, whether they were more likely to rent or buy, and whether they were more likely to invest in stocks or in real estate. The controlled study adjusted for variables such as age, gender, and income level.

Agreeable and extroverted people- those who get along well with others-were more likely to invest in real estate than in stocks. Neurotic people were more likely to buy than rent. Those who scored high on openness preferred smaller mortgages. And conscientious test-takers were more likely to have fixed-rate mortgages.

How does it work in real life? One blogger, Patrick.net, felt that the correlation between personality traits and real estate decisions worked for him: “Seems accurate for me: conscientious, not neurotic, open, not extrovert, and tend to prefer fixed, no rush to buy, prefer small loan over big house, prefer stocks over real estate (because stocks have better return).”

A Starter Home May Work For You…If You Can Find One

A Starter Home May Work For You…If You Can Find One
In the old days, young couples looked for a modest detached house in a family-friendly neighborhood as the first step to their dream home. Starter homes, as they were called, were affordable, although in many cases they needed some tender loving care. But they were home to millions of families over the years.

Today, many people, notably millennials and other first-time buyers, might be interested in a starter home. If they could find one. This can be a real challenge, particularly in growth states like California, Florida, and Texas, and in urban centers such as New York, San Francisco, and Dallas, where job gains have outstripped residential inventory growth.

A variety of factors have exacerbated the supply-demand imbalance. With interest rates at historic lows, investors have bought up smaller homes and turned them into rentals; flippers have remodeled and increased the value of older homes; and owner occupants have enlarged them to make them more appealing to upmarket buyers. In addition, many developers are just not motivated to build starter homes. So how do you go about finding a starter home? Here are some tips:

• Seek out older homes, which typically cost less than new builds.
• Look for foreclosed properties or short sales in your desired area.
• Be ready to act immediately when a well-placed starter home comes on the market.

Above all, be open-minded about the location, size, and condition of the home. Keep in mind that a starter home is usually just that-a starter on your way to your forever home.