Episode 28: The Psychology of Real Estate

Scott Williams: Sweet Home Santa Barbara, where the skies are so blue. Sweet Home Santa Barbara, “What worked for me, can work for you.”

Scott Williams: Hi, I’m Scott Williams, and I’m the co-host of Sweet Home Santa Barbara. And today, I’m here with my co-host.

Jonathan Robinson: Jonathan Robinson.

Scott: And because Jonathan’s got some special skills in the area of psychology – he’s a psychotherapist, and because he’s written books that have been New York Times bestsellers. Many times, he’s been on the Oprah program, he’s able really to talk to us about some of the psychology that we’re involved with in real estate. So, we’re going to ask some questions of Jonathan today.

Jonathan: Looking forward to it!

Scott: We certainly have moved into some changes in the real estate market. We’re facing a fair amount of uncertainty these days. And so, buyers and sellers are filled with anxiety. That’s an interesting word, Jonathan. What can you tell us about being filled with anxiety?

Jonathan: Anxiety, mostly, consists of having a lot of thoughts and not much time to process them. It’s like you get overwhelmed by a tsunami of thoughts. And that’s really one very simple definition of anxiety.

Scott: I would say that from being in the trenches of real estate, people definitely get overfilled with thoughts. Every form of news tells people that they should be worried. And so, people do get worried, it’s very powerful to have that coming at you all the time.

Jonathan: Yeah.

Scott: What are some practical things that a person can do when the world is telling you to beware, watch out, be careful, and all that stuff?

Jonathan: One thing I suggest to people is to be careful of what you let into your mind. You got to be kind of a gatekeeper. Watching the news or being very aware of all the bad news in the world can be very disturbing. Sometimes you need to watch Facebook less or watch the news less just to take better care of yourself. And then, of course, there’s a lot of practical things you can do to relax your mind, like meditation, yoga, or taking a bath, or playing with your dog, or walking in nature, or talking to friends. It’s really a matter of taking good care of yourself as to what calms you down and what allows you to feel more centered in a world in which there’s a hurricane of storms usually happening.

Scott: That makes me feel better just thinking about all those things because I love those things too. I know how powerful they are. The world serves up interest rates at 7% and you want to buy a house, or you want to sell a house and you have plans. You’re planning your life around. I want to get out of this house. I want to go into that home. This is a fairly big actual physical block. Seven percent interest rates are quite a bit different than three and a half percent interest rates. So, this isn’t just a matter of gatekeeping your mind. Here’s a big old fact that can really derail or alter your plans. What do you suggest?

Jonathan: In a market like this, everybody is subject to the same stuff. And when we have problems, our mind sometimes fixates on those problems. An analogy I use is you imagine a dime-sized black dot on a big whiteboard, that’s the problem. The problem is that black dot. And you have a relationship with that black dot. And for most people, the relationship with the black dot is they put their eyeball right on it and then they say, oh my God, it’s totally dark and black and it goes on forever and all I can see is darkness and blackness. So, what I tell them to do is to find a way to get some perspective and get their eyeball off that black dot. That might involve, as I said, doing something like calling a friend, being in nature, watching a movie, or anything to interrupt this pattern off our minds, which tends to fixate on the worst problem in our life. Because there’s more going on. Even now, in this moment, there’s me talking, there’s me feeling the sensation of my butt on the chair, there’s looking at you, there’s a beautiful day outside. There’s always a lot going on and if you focus on that black dot and all the problems, you’ll be overwhelmed. But if you focus on, say, what you’re grateful for in your life, or this moment, or your breath, or a friend, it puts it all in perspective. And it’s really important when people are faced with these big stressful events, like moving, that they get really good at self-care, and they make it a priority. It’s not like a luxury. “I’ll try to take care of myself once everything is solved.” Now, you got to make a priority of you going to the gym, going for a walk, or meditating and if you don’t do that every day in this process, at some point, you’re going to get overwhelmed and you’re going to probably make a bad decision.

Scott: That is, in fact, a wonderful description of lightening up a little bit. The key to me and all the things that you said is everybody is also all in this together. So, even though it seems like it’s just your black dot and your problem is seven percent interest rates, everybody has to deal with seven percent interest rates. So, creativity is probably up for a lot of people, like how do you deal with this? And you can, maybe, join in a little bit more with a flow that a lot of other people would like to solve this problem too.

Jonathan: And the more centered your mind is, the less anxious you are, the more you’re going to be open to ways of solving problems and negotiating through problems that might be blind to you if you are all anxious and stressed out.

Scott: Okay. Anxious and stressed out also cause people just simply to give up and quit. “Let’s not buy a house now”,” Let’s not even think about it”, and “I’ll talk to you next year”. People definitely deal that to me. And in their lives, looking from the outside, maybe not just looking at the black dot, they really do need to move.

Jonathan: Another thing is that any problem that people have if they think about too much, they’ll get whipped up into anxiety. But I like to break problems down into simple action steps to take. And I do that on paper. “What’s the first step I got to do?” “What’s the second step?” “What’s the third step?” And then, just go down the list. So, you’re not always thinking about stuff. You just look at your list. What’s the next thing I got to take care of?

Scott: All right. Okay. They’ll break it down into smaller steps. That’s where I’m of help in the home purchasing and selling process because I’ve been through this lots of times and I can take a lot of pressure off of people by helping them and bringing them choices.

Jonathan: When you help me buy and sell a house, I felt that support which is nice because I was new to that game. And you would just, kind of, be there as both emotional support and saying, “This is the next thing we got to do” and it felt like a burden being taken off my back because I knew that you were there.

Scott: Thank you. There are a lot of people who think they know quite a bit about real estate because they’ve done it two or three times. And it is helpful that people have done it two or three times. And there are a lot of things that still come up.

Jonathan: Yeah.

Scott: On the fourth time, or the fifth time, or the sixth time, that are new. And that you’ll be going for the first time, I’m there for all of those events. I think something that the idea of new possibilities that you can… Because we’re going through a sort of a rough patch in the economic world that there are more possibilities at this time. People may be more open. Sellers may be more open to a buyer’s proposal than they were several months ago. There are new products that come along in the world of financing to deal with the situation. It’s not a standstill situation in the marketplace. Things keep happening to aid us and help us and assist us. And being open to that something new may be coming along. Maybe part of that long, I don’t want it to call the healing process, but the dealing process. Dealing with situations like anxiety.

Jonathan: Well, every situation in life has its upside and downside. A few months ago, people were complaining they would make bids on houses, and they’d be outbid by 10 other people. That’s not happening now. Interest rates are higher. So, it tends to balance out. It’s never a slam-dunk time to buy or sell a house. There’s always some situation. And the people who are most successful learn how to handle their psychology and learn to look at the possibilities in a situation rather than just the downsides.

Scott: Okay. That’s good to know. A couple of things, just thinking about the moving process, we can deal with here. Generally, buying, selling, moving, the whole process takes more energy and effort than people plan for. That’s just my observation of decades of watching people go through the process. Is there anything you would suggest since this is a big project that people have to deal with?

Jonathan: Yeah. Take whatever time you think something will take and double it. Because if you do that, you might be close to what is involved. Where people get in trouble is they think, “Oh, I can move in a day or two” or something like that. And then they find that they can’t and then they get out of control because they didn’t have a plan for what really happens. So, when I thought about moving, I thought, “Well, cleaning my house should take three or four days”. And then I said Well, “Let me triple, it’ll probably take about 10 days”, and it took 10 days.

Scott: Yeah. I want to mention here as people in sort of the good news category, that lenders, along with the rise of the interest rates have created a couple of products that I think are valuable to both buyers and sellers to have some, sort of, idea that they’re out there. And I compare this a little bit to when you are selling your car. If you have a car and you drive into a dealership and you’d like to drive out with a brand-new car, they’re able to help provide quite a bit of convenience to do that. There’s a bit of the cost involved but it’s very convenient to drive off with a brand-new car. That has not been so available in the housing market, but now it is. Lenders will loan you money to acquire your new house when you have not sold your old one. They’ll give you a period of time from 6 to 11 months to fix your old home up, to fix the new home that you’re moving into. Get it all set it up so that you can move out of one home and conveniently move into the other home and give you time to sell the old home. And make all of that happen for you so that you can go out and pick a house that you want to move into when you haven’t even let go of the old house. That form of convenience takes a lot of stress out of the process, and that is available. It’s not terribly expensive, actually.

Jonathan: That’s the type of thing that happens in environments like these that balance out the difficulty with new ideas and new possibilities. And so, now is a good time as any to buy and sell a house. It’s always a mixed bag.

Scott: Yeah. Thank you very much, Jonathan. You can contact me at scott@scottwilliams.com and if you would like to talk to Jonathan about any of his specialties, just give me a call and we’ll get you in touch with Jonathan. So, thank you again, everyone, for listening to “Sweet Home Santa Barbara”. We’ll be back with another podcast episode soon.

Scott Williams: Thank you for listening. Please subscribe to our podcast on your favorite app. If you know someone preparing to sell their home, please tell them about the podcast. Visit scottwilliams.com to contact me, and download the two free e-booklets, “Is My House Saleable Now?” and “How Not To Buy A Money Pit”. Thank you for listening.