From the moment we wake up in the morning, we’re faced with endless decision-making moments ranging from the most trivial — Snooze or turn off the alarm? Green or blue socks? — to life-altering ones that affect our careers, relationships, family life, and health. And while we like to think that most of our decisions are based on reason, researchers have identified countless cognitive biases that can affect our behavior – preventing us from acting in our own best interests.
Cognitive biases are defined as tendencies to think in certain ways that can lead to systematic deviations from a standard of rationality or good judgment.
Basically, they are cognitive stumbling blocks that make us pay less attention to relevant information and give excessive weight to less important aspects that somehow manage to stick with us.
So how do these biases affect our renting decisions? Why do we love one place and not the other?
Let’s tap into the psychology of renting an apartment and go over 7 of the most common biases that stand between you and your dream place:
1. Framing effect
What it is: drawing different conclusions from the same information, depending on how that information is presented.
How it applies: the framing effect practically brought to life all real estate power words: cozy (which could easily translate into tiny and cramped), unique (code for hard to sell), lots of potential (needs upgrades). There’s no such thing as a chef’s kitchen; while it does sound lovely, it mostly means that the kitchen is the selling point of the house.
How to bypass it: don’t let good marketing make decisions for you. Particularly when browsing rentals online, don’t overlook the properties that are less glamorous in description; you can’t truly get the feel of a place before you see it in person.
2. Loss aversion
What it is: the tendency to strongly prefer avoiding losses to acquiring gains.
How it applies: say your apartment is going co-op. You weren’t planning on buying, but you’re psychologically tied to the place and don’t want to give it up. So instead of immediately looking for apartments for rent in the area, you’re actually considering buying in.
How to bypass it: focus on what you’d be gaining from any given experience; when having to move out, you’re not losing an apartment – it was never yours in the first place. Find a new place, maybe one that’s closer to work or in a building with better amenities, and chances are (once you’re all settled in) you’ll love it more than the old one.
3. Anchoring bias
What it is: relying too heavily on the first piece of information seen.
How it applies: say you’re moving to a new city and you’ve turned to a realtor to find a new place; the realtor first showed you a rather cheap apartment that he said ‘would be a great fit for you’. The apartment was terrible and you’d never actually consider living there; nevertheless, the rent of that first place will stick with you and every other apartment you’ll consider later on – despite being superior in every way to the first one – will seem pricey, as you’re ‘anchored’ to that first price.
How to bypass it: don’t let the initial piece of information set the benchmark. Always base your decisions on the vast array of existing data available – in our case average rents, comparable units, realtor know-how, market reports etc.
4. Focusing effect
What it is: the tendency to weigh attributes and factors unevenly, putting more importance on some aspects and less on others.
How it applies: You’ve narrowed it down to two apartments; you like them both, but one of them has this fabulous bar. So now you find yourself drawn to the latter, though the bar wasn’t on your must-have list (nor do you need it) and despite the fact that the other place is more spacious as a whole.
How to bypass it: When making a decision, pause to identify all attributes first and give them rational weighting. While we rarely make a decision (or purchase) based on needs alone, don’t let ‘shiny objects’ dwarf your objectivity.
5. Von Restorff Effect
What it is: the tendency for an item that “stands out like a sore thumb” to be more likely to be remembered than other items.
How it applies: what will stick with you after visiting an apartment with an unkempt bathroom? Yup, you’ll only see that ugly bathroom, despite the fact that the property manager has already committed to updating it.
How to bypass it: don’t let the sore thumb shift focus from more important aspects. Concentrate on the bigger picture and don’t let one element ruin an apartment for you — especially if there’s a way to make that sore thumb stand out less.
What it is: a bias in judgment, stereotyping is setting expectations for or drawing conclusions about an individual based on the group they are tied to.
How it applies: say you’ve lived next to college students – that happened to be loud and sometimes lewd. When looking for a new apartment, if you are to pick between one that neighbors a college student and one that does not, you’ll instinctively pick the one without college students.
How to bypass it: stereotyping often happens not so much because of aggressive or unkind thoughts, but is more of a simplification – a sort of an additional data point that helps you make a decision. Beware of your own stereotypes and try not to let them be a factor in your decision-making process.
7. Illusory correlation
What it is: inaccurately perceiving a relationship between two variables (i.e. behaviors, events, items, or people) when there is not a strong relationship between the two.
How it applies: when you were younger, a bully that really had it in for you lived on a street three blocks away from your house; he’d often pick on you, so you’d walk an extra 10 minutes on your way back from soccer practice just so you wouldn’t have to cross paths with him. Naturally, you’ve grown to associate his street with something unpleasant, so even if it might fit your lifestyle, you’re not even considering it when looking for a new apartment.
How to bypass it: remember how we said that cognitive biases make us pay less attention to relevant information and give excessive weight to less important aspects? Well, this particular one sidetracks us completely. Having to find a new place to live is hard enough, don’t make it harder by factoring in irrelevant criteria.
What cognitive bias do you relate to the most? We’d love to hear your story.