Why the “Paradox of Choice” Overwhelms Buyers

As a buyer do you find yourself “wanting to see everything” in your price range or “needing to look at just one more house or condo”?As a buyer do you find yourself “wanting to see everything” in your price range or “needing to look at just one more house or condo”? You may truly believe that having a wide selection of homes to choose from is the only way to find one you love. Guess what? It’s a proven fact that more options means possibly making the wrong choice!One of  my favorite books is “The Paradox of Choice” by Barry Schwartz. I often discuss the moral of this book with clients and on occasion give a copy to those who are having a hard time making a choice.You can apply the principles of this book to any area of your life where you are having a hard time making a decision, but for today’s lesson I’ll apply it to the home-buying process.Choice Overload Research has shown that having too many choices – from selecting jam to finding a mate, to picking a home, to choosing a mutual fund package – can overwhelm and confuse people to the point that they feel stressed and paralyzed with indecision. Or buyers experience an increased feeling of regret or dissatisfaction if a decision is made, thinking that one of the other alternatives would have been better.Every day you’re faced with an insane number of choices for all sorts of products, whether you’re at the grocery store or the shopping mall.  An entire aisle of cereal is the norm now. At one time shopping for jeans meant Levi’s, and that was pretty much it. How long does it take you to find that perfect pair now? Or decide how much to spend?There are so many options to choose from that it’s easy to get overwhelmed and end up in a situation where doing nothing at all or making no choice becomes the “default choice.” We’ve all walked out of a store empty handed when this happens!Why More Is Actually LessWhen it comes to house hunting, you do want to have a healthy inventory of listings to view, but thinking “seeing more is always better” can actually hurt or sidetrack your search for a home.If you spend the day (and weeks) looking at so many homes, you’ll start feeling confused about the features of each one and your mind will start going in circles to distinguish each home.Plus it’s just plain harder to narrow down your choices and start to eliminate homes when you have viewed way too many. More choice causes confusion, second guessing, and being overwhelmed.Make Choosing Less Stressful There are several strategies to make your search successful and satisfying from beginning to end. This means you’ll need to narrow down your choices so you’re not clogging up your decision making process.Sometimes the market itself will limit your choices, especially with the low inventory levels experienced in the DC metro area. But that number is inching up and you’ll still need to make a decision at some point. Here’s how it’s done:

• Spend time “researching” before you’re a serious buyer.  It’s important to be educated about your local market in terms of price, location and features. Visit open houses, go online, and talk to friends about how they made their home-buying decision.  This way your expectations are realistic and you’ll be more confident when you do become a serious buyer. Keep this time productive so you can move on to become a ready buyer or you’ll still be “looking” two years down the road.
• Figure out your needs, wants and even your deal breakers. I say this over and over again but it’s SO important to make a well-thought-out list and stick to it. Focus your time and energy on what matters to you.  I recommend starting with what lifestyle you want to live and making your list from there.  For example, if you love biking to work or walking to the gym or grocery store every night, then make THOSE your most important decision-making factors and be willing to forgo a little of the others.  Here’s great article to help you with this:

“How Your Needs and Desires Lead to Home Sweet Home”

• Stick with your budget and price range. You’ll increase your doubt, confusion, and dissatisfaction if you start to see homes outside your price range—lower or higher. Once you’re a serious buyer, don’t be tempted to compare homes in different price ranges. You should have already done your research so this action is an unnecessary waste of energy and time.
• Compare apples to apples.  It’s not a good idea to compare houses that are in two very different locations – it will only lead to “analysis paralysis”!  For example, a home in the suburbs is always going to look better than a similar priced home in the most desirable location in the city. To avoid this from happening, you first need to decide what lifestyle you want, which then helps you decide on your location perimeter.

Once you decide which location (generally speaking) will provide the daily lifestyle you are seeking, only then can you compare homes within that location. If you decide to be open to other locations, do the same comparisons of similar homes within each location. 

• Remember having “enough choices” doesn’t mean a large number. Too many choices can be daunting and overwhelming, so you want to aim for “enough” choices. This way you’ll be confident in your decision and that you’re not shortchanging yourself with too few choices. Work with your agent so that you view enough homes that meet your list’s criteria. Sometimes, it all depends on the inventory though.
• Keep eliminating homes and move on. When you view a home, it’s either a “yes” or “no” and then on to the next one. Eliminate as you go along so you can keep your selection to two to three homes (just like HGTV’s “House Hunters”). Don’t “keep it in the running” just in case or you’ll end up with too many “maybe’s” to whittle down. Another way to do this is to ask yourself which home you like better—the one you are in or the ones you just saw. Then pick your favorite of the day.
• Don’t worry you’re missing out. Your agent can explain to you why the homes she choose NOT to show you don’t match your list, are out of your price range, or have something that you consider a deal breaker. Your agent is there to help pare down the number of homes to view and keep you focused.
• Avoid becoming an MLS junkie. It’s hard in today’s market to not search the internet to see what’s been newly listed. Just remember to keep it in check and limit the time you spend trying to catch every new listing. You can tell your agent if you’ve seen something that’s a match but don’t become obsessed or anxious about every new listing and second-guess too much.
• Learn to embrace “good enough.” I do want you to Dream Big and find a home you love. However, no home is going to have everything on your list and still meet your budget. It’s just human nature to want more than you’re willing to spend. Accept that your decision on a home may come with some sacrifice of a want on your list.

That’s why you should keep to the monthly budget you decided for yourself (regardless of whether you are approved to spend more), prioritize your list, focus on needs first, and know your deal breakers.  Making a choice does mean you’ll be passing up future opportunities, but you need to eventually pare down your choices or you’ll be “looking forever.”Let me know if you have any questions about looking and choosing a home. I definitely recommend reading “The Paradox of Choice” for further insight.