Surprisingly, yes! Online dating and selling your house have many similarities.
On my run this morning, I listened to my favorite podcast Freakonomics. This week's episode is called "What You Don't Know About Online Dating," a replay of a 2014 episode. Stephen Dubner interviews a Stanford Professor named Paul Oyer who has written a book called "Everything I Ever Needed to Know About Economics I Learned from Online Dating."
It's a good listen and I encourage you to take 30 minutes to listen to the episode.
Now that home listings and real estate is an online search, I thought through his recommendations and wonder are there lessons that home sellers can takeaway from his analysis of online dating?
6 Key Takeaways
Know Your Goals. Just like online dating, it is important to start with the end in mind.
- For sellers, are you trying to maximize price, speed to close, find a great family for your house, etc.?
- For buyers, are you buying for investment, capital appreciation, school district, neighborhood, more space, less space, emotional satisfaction, etc?
Understand Your Competition. Competition drives pricing and demand. Really understanding how attractive you or your house is to the market is critical to success.
- Sellers: What other homes are on the market or potentially on the market? How does my home compare and how is my home priced? What differentiates my home versus the others?
- Buyers: How attractive am I as a buyer? Am I pre-approved? How quickly do I need to move? How quickly are homes moving on and off the market?
Should I be Picky or Selective? Depending on your goals, your criteria, and your market, you may need to make more compromises or you can be selective. Is there is less competition? Do you need to need to make a quick decision, or maybe you have plenty of time since there is a long time before your lease is up?
Find a "Thick" Marketplace. You want to list your house and be searching for a house where the most houses are listed AND the most home buyers are searching. List your home on on the biggest websites. In this way, the most home buyers will see your house and consider it as a potential purchase.
Use the Best Search Engine. In relation to #4, some home sellers or real estate agents would argue that using a niche site may be better, similar to using a niche dating site. Oyer argues that what you really want is the biggest site with the most home buyers and the most homes for sale, BUT you want the best search engine to customize and filter your results.
In his words related to online dating, Paul Oyer says, "But just think about a boardwalk. And at one end of the boardwalk is people who are completely incompatible for you, with you for one reason. At the other end of the boardwalk is people who are completely incompatible for you for another reason. And you’re right in the middle of this boardwalk. And then think of all the women who might be in your potentially in your market as being evenly distributed along this boardwalk, where the ones that happen to be right next to you are perfect fits for you, or very good fits for you. And the ones at the extreme are not. Well, obviously the more women on that boardwalk the better you are. But if you don’t know exactly where they are on the boardwalk…then the more women there are the more problematic it is. So if the technology is good enough to show you here are the 10 women who are really close to what you’re looking for that’s way better than going to a city where the whole boardwalk only has 10 people. And it’s easy to play the whole field of that boardwalk, but the chances that any of those women would be a good fit for you would be not nearly as good. So this is what we call a thick market effect. And it does have the opposite problem that thicker markets lead to more costs of screening all the potential candidates. And if the software can do that for you, you’d be better off."
- The More Detail, The Better ... Generally: In general, providing more detail on your house is better than less in terms of helping find the right buyer and the right price.
Interesting analysis. I am going to get Oyer's book to learn more.
Photo Credits: Karli & Jonathan from Zoosk, Casa Bonita Sherwood CC, Flickr Creative Commons