Sometimes a character is really based on research that you do. Other times it's just based on your imagination or perhaps your conversation with the director. Or sometimes all of the above. It depends on the movie and character.
I guess I'm a very keen observer and I'd like to think I have a good imagination.
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To me it's far more efficient to mobilize the imagination. It's far more efficient to hear a creaking step for example than to see the face of a monster which usually looks ridiculous and where you know that the blood is ketchup.