The Two Key Emotions To Evoke When Selling A Home

By
Real Estate Agent with Joe Manausa Real Estate 8508880888
https://activerain.com/droplet/4GVW

When it comes time to choose the price you ask for your house, I strongly encourage you to give this some serious thought.

Our studies show that a house priced correctly at the onset of the initial marketing plan will, on average, yield 6% to 8% more for the seller than one in which the seller prices high and then reduces until it sells.

There are many reasons (we believe) that the seller will eventually get less, but it usually comes down to a combination of a few key factors, fear and greed.

Why Fear and Greed Rule The Housing Market

We advise our house selling customers that fear and greed rule the housing market (just as they do in every other market). Both the seller and the buyer(s) must deal with both of these emotional forces that can wreak havoc on a house sale.

For the seller, there is no fear when they first enter the market. They want to get above top dollar and they certainly are not willing to give the house away. They often do not understand that greed will cause them to over-price their house, asking an amount that will lure the WRONG buyers to their house. As time goes on and their house does not sell, greed is replaced by fear which can cause them to capitulate to an offer that is lower than what their house is worth. If you think this cannot happen to you, you are like all the seller's who sold below market when fatigue set in after months or years of being on the market without a buyer.

For the buyer, greed will cause them to low-ball a well-priced house. Most new-to-the-current-market buyers want to try to buy a house at far below market value, a form of greed that often causes them to lose in a negotiation war to another buyer (or to receive a counter offer from the seller that is far higher than the seller is willing to take). As time progresses and they tire of the difficulty of house shopping and the consistent losses in negotiation, it is fear that causes the buyer to bid too high on a house they could have bought for less. If you think this cannot happen to you, you are like the scores of buyers who work with the wrong agent and who look at the wrong houses, and then fail to make compelling offers.

So the new seller and the new buyer, unless well-educated by their real estate agent, typically allow fear and greed to bring them harm.

Why Smart Sellers Make More Money

Price Your Home Right, The Buyer Is Asking Which Home Does Not BelongSmart house sellers recognize how the market runs. They use their initial asking price to activate the fear emotion of the ready-buyers for their houses. If you understand this concept, then you understand why we advise house sellers to get top dollar for their house, they need to plan to sell a house in just 4 to 14 days.

Take a look at the image on the right. Can you tell which circle does not belong in the picture? Pretty tough, huh?

Four of the five circles are a shade of blue, one is yellow. Four of the five are the same relative size, one is quite smaller. So if you chose the small yellow circle, you are correct.

Now look at the image on the left below.

Can you tell which one doesn't belong?

How Your House Compares On The InternetYou know what? So can every buyer who will look at these houses online when it comes time to select properties to visit.

94% of the prospective buyers for your house are using the internet to select which houses to visit, and they aren't stupid. Buyers are not going to choose to come see your house if it does not compare favorably with those priced similarly.

When you over-price your house, even by "just a little," you make buyers compare your house to those that are nicer. In my 24 years of experience, buyers prefer the nicer houses.

Next time you get the urge to "price it high and see if somebody brings an offer," please try to remember these pictures. It is how the internet works for buyers, and buyers are using the internet.

So how does this relate to fear and greed?

How To Stimulate The Fear Emotion Among Homebuyers

For most areas and price ranges, there is one or more buyers waiting in the wings, looking at every deal that hits the market in their chosen neighborhood. They understand values better than most Realtors (for their selected neighborhood), and they are ready to jump when the next one hits the market. (If you want to know more about who's stalking your neighborhood, just follow the link).

Which One Doesn't BelongSo why are they ready to pounce? Because they are seasoned buyers, and they already lost one or more in your neighborhood when "greed" was in control. But they are tired of losing out, and they want a good house.

If you price your house to sell, it will look like the middle house in the picture on the right. Your house will be the obvious best-buy, and buyers will jump on it and make a full-price offer or higher. Why? They are fearful of losing your house to another buyer.

But if you hit the market over-priced, they know you won't sell right away, so they are in no hurry to bring an offer (or even look at your house that compares poorly to the good ones priced at the same level).

Fear and greed are great emotional motivators, make sure you put yourself in a position to use them to your advantage. Want to know other ways to get top dollar for your house when you sell? Simply drop me a note and we'll set a time to discuss the best ways of selling your house.

close

Re-Blogged 7 times:

Re-Blogged By Re-Blogged At
  1. Gary L. Waters Broker Associate, Bucci Realty 08/07/2015 09:04 AM
  2. Meredith Held 08/10/2015 07:38 AM
  3. Kathleen Frawley 08/11/2015 12:00 AM
  4. Chrysti Tovani 08/11/2015 06:18 AM
  5. Mike Williams 08/11/2015 09:11 PM
  6. Praful Thakkar 08/21/2015 05:29 AM
  7. Winston Heverly 10/24/2015 01:14 PM
Topic:
Home Selling
Location:
Florida Leon County Tallahassee
Groups:
Realtors®
The Lounge at Active Rain
Almost Anything Goes
Addicted to Active Rain
Bananatude
Tags:
selling a house
realtor tallahassee
listing agent tallahassee

Spam prevention
Show All Comments
Rainmaker
457,823
Joan Zappa
Eagles Wings Realty - Montrose, CO
Professional treatment of our clients, brings awes

Some people are open to our expertise, some not so much. Good post

 

Aug 10, 2015 11:08 AM #48
Anonymous
SherWenowitz,ABR,ProHomeStager

Great Article!
I'm also a Professional Home Stager(tm) in addition to a fulltime Realtor.

You are correct, in my opinion regarding correct pricing. The wrong, Too High price will Bring buyers with Higher Expectations who will be disappointed to find that the house is not matching feature/upgrades of similar priced homes.

Reality is tough, however necessary for garnering a higher sales price/faster!

Aug 10, 2015 11:25 AM #49
Rainmaker
592,706
Carolyn Roland-Historic Homes For Sale In Delaware and S. Chester County PA
Patterson-Schwartz Real Estate - Wilmington, DE
Carolyn Roland, GRI, CRS

You can do so much with a listing if your photo of the front makes it stand out. If it is a bad picture or a poorly kept house, the buyers will say, "Next!"

Aug 10, 2015 12:23 PM #50
Rainer
11,280
Jacy Bowers
Cherry Creek Properties - Westminster, CO
"Working at the Speed of YOU!'

Good post, true info and I agree. In a hot market though like ours in Denver, some of these tactics don't apply so much, other then the sellers can be greedy and it works! And there's fear that the buyers will never find anything or have to overpay to ever get anything..Challenging for both sides!

 

Aug 10, 2015 01:30 PM #52
Rainmaker
464,830
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Excellent Post!  I must agree with everything you said and the pictures ... well they speak for themselves. 

Aug 10, 2015 01:34 PM #53
Rainmaker
1,060,712
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Joe,  I like your explanation that a home that is priced higher will be compared to homes in the higher bracket.  That makes sense.  Most do not think about the fact that the home will not compare favorably to most homes in the higher bracket.  This is an explanation that everyone can understand.  Excellent!

Aug 10, 2015 03:08 PM #54
Rainmaker
1,538,011
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

I love the way  you used photos to illustrate your point. It speaks not only to the fact that your house must be priced comparatively to similar houses - but to the importance of using good photographs. 

Aug 10, 2015 03:52 PM #55
Rainmaker
1,922,599
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Joe - you made a very compelling case for fear and greed.  Having a professional help you tap those emotions will result in a win.

Aug 10, 2015 09:53 PM #56
Rainer
267,233
Chris Lima
Atlantic Shores Realty Expertise - Port St Lucie, FL
Local or Global-Allow me to open doors for you.

Nicely done!  I love the addition of the pictures. I have bookmarked this post for future reference.

Aug 10, 2015 10:39 PM #57
Rainer
4,828
Mike Hofmeister
Select Properties Real Estate - Saint Peters, MO

Great information. As Realtors, we know this to be true, but the client doesn't always believe us, but to hand them this information from an "expert" helps make the point.

Aug 11, 2015 01:12 AM #58
Rainmaker
323,839
Melissa Brown
Helen Adams Realty - Charlotte, NC
Realtor - South Charlotte NC Homes for Sale

Joe, this is one of the most relevant and informative posts I've seen on the dangers of over-pricing a home.  It's funny, isn't it, how many sellers thing THEY will be the ones to defy conventional wisdom and sell their home way over market value (one experience and data prove otherwise)>

Aug 11, 2015 01:40 AM #59
Rainer
140,265
Keith Whited
RE/MAX Gateway - Alexandria, VA

I still can't understand how buyers and sellers have such difficulty understanding these basic concepts.

Aug 11, 2015 02:12 AM #60
Rainer
145,773
Theresa Akin
CORPUS CHRISTI REALTY GROUP - Corpus Christi, TX

Great content and photos. Comps are just that; comps. I do them for the buyer and the seller. Comps are guides/ tools to come to a good deal in the end.

Aug 11, 2015 04:15 AM #61
Rainmaker
241,564
Christi Farrington
Dagny's Real Estate - Wilton, CT
~ Your representative in Fairfield County, CT

Well done.  Love the explanations and your photos seal the deal! 

Aug 11, 2015 06:28 AM #62
Rainmaker
515,638
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

Oh this is one of the best blogs I have ever read on this subject.  I recently lost a listing b/c I gave the seller my honest opinion, backed up with comps, of a fair price range.  Of course she chose the agent that told her $20K higher..and the house is just sitting on the market.  Thanks very much for taking the time to write this blog.

Aug 11, 2015 12:04 PM #63
Rainer
3,184
Mike Williams
Home Towne Real Estate - Owings, MD
Real Estate Agent Serving Annapolis and Calvert

One of the best explanations I have seen in regards to why a home should be priced from the start. Thank you for your time to post this!

Aug 11, 2015 09:10 PM #64
Rainer
32,570
Anna Valencia Tillery
White Glove Moving, Storage & Delivery - Vero Beach, FL
"Moving Made Easy at Prices that Make it Possible"

The visual aids sure made this for a fun read. It's important to know how people can "predictably irrationally" will think; well written piece.

Aug 12, 2015 05:09 AM #66
Rainmaker
578,699
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Perfection in a blog! You nailed it exactly. Sellers do themselves a disservice when they overprice. "For the seller, there is no fear when they first enter the market. They want to get above top dollar and they certainly are not willing to give the house away. " This logic encourages sellers to miss the buyers who are most interested in their house when it first comes on the market. Congrats to you for an excellent post.

Aug 12, 2015 11:42 AM #67
Rainmaker
978,722
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Excellent advice!  Pricing a home right from the get-go is the best strategy to sell for more money quicker.  No doubt about it.  I like your greed factor argument as well.  Well said!

Aug 15, 2015 05:23 AM #68
Rainmaker
150,760
Jeremy Joslin
Coldwell Banker Residential Brokerage - South Windsor, CT
Professional Real Estate Marketing and Sales

Excellent article Joe!  I couldn't have said it better

Aug 18, 2015 08:27 PM #69
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
1,172,906

Joe Manausa

Tallahassee Real Estate
Looking for Tallahassee Real Estate?
*
*
*
*
Spam prevention

Additional Information