The Psychology Behind Home-Buying Bids

/ 24 minutes of reading /

The Psychology Behind Home-Buying Bids

Tea & Mortgage Podcast

Whether you’re a first-time buyer, a returning homeowner, or someone trying to decode this unpredictable market, this episode gives you the clarity and confidence you need to approach your next offer strategically and successfully.

In this Tea & Mortgage Podcast, we’re revealing the deeply powerful psychology behind bidding strategies when buying a second-hand home.

If you’ve ever wondered why some offers get accepted instantly while others struggle, this episode breaks down the human side of home buying: how sellers think, what influences their decisions, and how you can position yourself as the most compelling buyer without overspending or stressing yourself out.

John Coleman of JC Mortgages relies on his 20 years of experience and thousands of transactions to document:

  • ☕ Bidding psychology: Why logic rarely drives seller decisions—and what actually does.
  • 🏡 How to make your offer feel “safe” to a seller (emotionally, not just financially).
  • 💡 The subtle cues that strengthen your position, even before the numbers come into play.
  • 🧠 Cognitive biases buyers don’t realize they trigger—and how the right strategy can flip them in your favor.
  • 🤝 The difference between competing… and connecting in a negotiation environment.

Podcast Transcription

Introduction

0:00 – 0:21 Norm Schriever:
Hey everyone, how’s it going? Welcome to the Tea & Mortgages podcast with John Coleman of JC Mortgages. For Episode 35, we have some really interesting insights on the psychology of buyers, sellers, and transactions from John.

0:21 – 1:19 John Coleman:

Hello everyone. Yeah, I’m going to—suppose, perhaps the first thing I’ll say, I’m not a psychologist, right? But I’ve been in this game a long, long time now, and I’ve seen the psychology of the different parties involved in buying and selling a house.

I’d like to share this with people because it’s a game. I want to share the thought processes involved—your psychology of the buyer, the psychology of the seller, then also the psychology of the selling agent. Having a grasp on those will certainly help in formulating a bidding strategy. I’m not saying follow these rules and you’ll definitely get the house, but you’ll stop yourself from doing something stupid and it will definitely give you the best chance of being successful with whatever budget you’re prepared to go to for a particular property.

So yes, it will be… we need to put our disclaimer at the end of this because this is just my observations from a long time watching people buying and selling houses.

1:19 – 2:14 Norm Schriever:

You’re not a licensed psychologist, psychiatrist, therapist, or… you don’t have a leather couch for people to lie on. But of course, you’ve been doing this a long time, and you notice the patterns of human behavior.

John Coleman: And it’s really rewarding when I have a client come back and say, “John, that advice works.” That is very… because you kind of give yourself a pat on the back and go, “Yeah, okay, I am bringing value to this process.” I’m not just arranging the mortgage; you’re actually helping people to ultimately secure a home. And that’s what this is all about.

Norm Schriever: Yeah. And to your point, I think when you understand who’s involved and their motivations—what their best interests are and how that manifests—then you could align yourself or you could make the appropriate moves with those motivations. You’re basically playing chess, not checkers, where you’re not feeding the wrong behaviors, right?

2:15 – 3:11

John Coleman: Absolutely. And people don’t realize it’s a game. It absolutely is a game. And it’s a game no one plays on a daily basis. Buying a home is such a huge thing. It’s so emotional that a lot of the time, all rational thought can go out the window. So you need to kind of frame your own thoughts of, “How am I going to try to make this happen?”

It’s very easy for me to say to people, “Don’t fall in love with a house,” and this is what happens on a continuing basis. So you need to recognize that—that this is an emotional response to something that may or may not happen. So, how do I really want it? How do we best go about formulating a bidding strategy? Understanding your thoughts, understanding the thoughts of potentially the seller, and then potentially the sales agent can give you the best chance of success. That’s what I would suggest.

3:11 – 4:18

Norm Schriever: Awesome. So let’s dive in. Let’s get into that. I’m excited for this. And of course, you’re not a licensed psychologist—again, the caveat—but this is some really interesting stuff. So let’s dive in.

John Coleman: Fantastic. When it comes to second-hand properties, you’re looking at… this is a totally different game. I’ve done some videos in terms of how to play the game. The biggest mistake I find people making is just bidding for the sake of bidding.

Norm Schriever: Yeah. They get caught up in the emotion, the fear of missing out—the FOMO. Right.

John Coleman: Yeah. They see a house on the weekend and they go, “We want it.” And I always kind of educate this in terms of… there’s three layers of psychology at play here. Again, trying to pretend I’m a psychologist.

Norm Schriever: Break it down for me. Break it down for me.

John Coleman: OK, now we’re getting good. All right. I don’t have a degree in this, let me put my disclaimer out there pretty quickly.

Norm Schriever: Observing human nature is not professional advice. Don’t do this at home. Consult your certified therapist.

4:18 – 5:26

John Coleman: So the first thing is obviously the psychology. There’s three people in play here. Not everyone even thinks of this. And they don’t even really think about two; they think about themselves.

The emotional things involved… one is the fear of losing out, and then the fear of overpaying. So they’re two kind of competing, obviously paradoxical, competing against each other. One is, “I want to put a bid down. I don’t want to lose the house.” Two is, “I don’t want to put a bid in that’s too much because I might be overpaying.” And both kind of work against you.

I’d be almost saying, don’t do anything, right? My view on it is very simple: put a bid in at the start to close it, or come in and try and steal it off someone else at the end. So beware of your own psychology. How are you viewing this? Are you trying to get a cheap deal early, which I don’t think works, right? Are you trying to basically… are you bidding too much too quickly because you want to do something just for the sake of doing something? OK, now I’m going to flip it to the seller’s psychology.

5:26 – 6:23

Norm Schriever: If I could jump in with that one, too. From what you told me there—and I see this a lot—you could think of it as a Venn diagram where the circles overmatch. There’s value, which is concrete, factual, based on data and market. And then there’s perceived value, which is where emotions and that “Oh, we love the paint in the kitchen, this is the one we need,” you know… and there may be some overlap, but it doesn’t mean that they’re the same thing. People have to be coached up not to fall… not to mistake value for perceived value based on their emotions or perceptions.

John Coleman: You phrased that much better than I could possibly, bringing in those diagrams as well.

Norm Schriever: And I can visualize! Very, very sophisticated with the diagrams.

6:23 – 7:29

John Coleman: So then, the psychology of the seller. The seller basically, again, is initially… could possibly be greedy. In certainly… he wants X, but he’s seeing all these people interested, so then his expectations of what he wants changes.

If you get something… you might hit him at the point whereby the fear of losing a great deal that’s on the table outweighs the actual degree of wanting more. That’s very much a very individual piece.

But this third psychology here is one that always gets forgotten. That’s the psychology of the sales agent. He is hired by the seller. OK, but his responsibility is to get the best price possible for the seller. He’s a human being at the end of the day, and ultimately, he’s looking to get the best price possible for the actual seller, but from his own business point of view, in the quickest time possible.

7:29 – 8:33

John Coleman: So this is where you can be clever. In that you can almost… Even though he’s not your client, he’s not working for you… you can get him on your side, or get her on your side, at the right point. Purely by just… Well, he’d love to close it quicker because… OK, say he’s got €450,000 on the table and the deal would close. If he’s to go and show the following weekend, maybe there’s another €10,000 in it for the seller, but he might only be getting one percent of that as his fee.

Norm Schriever: So it’s not worth it.

John Coleman: Yeah, it’s not worth it. Well, his time is already… if he can sell it quicker…

Norm Schriever: The math is: close the deal as fast as possible and get me my check as quickly as possible.

John Coleman: Yeah, it’s something like that, perfect. Obviously, it’s the duty of care to get the best possible deal. But if he can find a deal that closes it quicker, that both the buyer is prepared to make and the seller is prepared to accept, he’d be all for that.

So people say, “Oh, they want to…” There is a perception out there that the agent is trying to squeeze an extra five or ten grand. Yeah, I don’t buy that at all, truly, because there’s so little extra in it for them. Yeah, it just doesn’t make any sense, or it doesn’t make any mathematical sense.

8:33 – 9:58

John Coleman: But so if the seller… you can ask the question at the start: “Is there something like… is there a price that takes this off the market today?” Now, the agent may not be able to get back… he goes, “Oh, the seller wants to see where it goes.”

And you go, “OK, grand.” But then you keep your powder dry. You hold back. You don’t put an offer in just to get this bidding process going.

Norm Schriever: That’s an awesome question, by the way. That is a powerful question that not many people talk about. And like you’re saying, you’re keeping your cards to yourself, you’re keeping your powder dry, but you get their number, and everyone has a number. And they might disclose that number.

John Coleman: And that’s many views. But then that’s at the beginning. We can kind of flip it at the end, because if you can’t get it at the beginning, you’re then trying to come in at the end and steal it off someone else. That sounds very… that sounds terrible, but it ultimately is what’s happening here. You’re trying to… only one person can buy a house. There might be 10 people. So you want to make the best deal.

So then if there’s a bidding process coming on board, you can always ask the question at the end: “Well, I want this house, but I don’t really want to continue going down a bidding war. You’re his agent. Is there a price that I can offer today that closes this deal?”

Now, that doesn’t work every time. So I don’t want to pretend that I’m giving out a foolproof system. But what it does is it stops you making… bidding against yourself. It gives you the best chance of being successful.

9:59 – 11:17

Norm Schriever: In my opinion, you’re not over-committing that early in the process.

John Coleman: You’re not putting a bid out there that just gets other people interested. Say I go and see the house on the weekend and I like it. My first question would be, “Well, are you viewing… is it being viewed next weekend?” And if it is, well, why did I put a bid in? They’re just going to go to the people next weekend and go, “Hey, I now have €480 on this house.” I’d keep on that showing and wait to see what happens next weekend.

And then if someone’s put a bid in, we’ll maybe put a bid in, more than not to try to scare them off, whatever the play may be. But try to find out as much information as possible.

But that would be the biggest mistake I would see people making on second-hand properties: they overbid too quickly. They are getting involved for the sake of getting involved, and that, in effect, is just bidding against themselves. They’re creating more competition.

11:17 – 12:44

Norm Schriever: Yeah. If the seller… I love that psychology, that’s so interesting. And you’ve been doing this so long and you’re an observer of people and systems. This is great that you’ve seen these patterns and these mistakes. But if the seller is not ready to close today, then why are you offering the money when they’re not ready to seal the deal today? Right. And so wait until… Every offer that comes in is more reinforcement for the seller psychologically than my perceived value—remember our nice diagram—my perceived value is actually higher, or there’s evidence that I’m going to get more offers, more money. So why fuel that fire when they’re not ready to close it, you know, if they’re keeping it open another week or something like that? So that’s wonderful psychology. Um, how about mistakes?

John Coleman: Psychology. Let’s put… let me put that to frame right again. It’s “Psychology by John Coleman, non-qualified, take it at your peril,” basically. Take it as some information that you can work with. I would never want…

Norm Schriever: And now, relationship advice and psychology from John Coleman, right? Is that what’s next?

John Coleman: We’re definitely going to park that one. We definitely park that one.

Norm Schriever: The “Beer & Mortgages Podcast” with John Coleman, huh?

John Coleman: No, we keep it to the table. We talk about that.

12:44 – 14:03

Norm Schriever: All right. Well, I don’t know about you, but my mind is blown with all of that great information and really interesting psychology of the motivations, behaviors, the bidding process of everyone involved. So, John, great stuff. Thank you. Honestly.

John Coleman: So remember, I repeat this again: these are just my opinions, my thoughts, my observations. And I’ve said I’ve seen them work in real life. So I didn’t just share that for the sake of making myself sound more intelligent than I am. It’s not. It’s literally all about helping people come up with the right understanding in doing something that they don’t do… that they’re outside their comfort zone, right? It’s a game. Trying to understand the dynamics behind the game gives people the best chance of being successful. And I just… I love sharing that kind of information. So thank you for suggesting this, and then hopefully people got some value from it.

Norm Schriever: Yeah. Fascinating stuff. And of course, if anyone wants to talk to John, has questions, wants to apply for a mortgage… you’re available, and all your information is below. Tea & Mortgages Podcast. Thank you everyone for watching and listening to number 35. We’ll see you next month. All right, everyone. Welcome to the Tea & Mortgages Podcast.

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