Home sellers are like everyone else. They see their world, and their home, only from their perspective.
The perspective of the local market or the potential buyers is often irrelevant. The sellers want and need to be right, even if the lies they tell are really to themselves.
"But I need to get this price when I sell."
"This patio is adds more value than the appraiser thought. He does not understand how hard I worked to build it."
"Nonsense, our cat doesn't make the house smell bad. No one will really notice."
"Well, I've got this much in the house, so that is what it is worth."
Most sellers genuinely believe they know the house's current market value, even if it is based on "feel" or the listed price for nearby (non-selling) homes.
Anyone who has been working in real estate for any length of time has dealt with this seller mindset.
Intuition is about Patterns
Daniel Kahneman, recipient of the 2002 Nobel Prize in Economic Sciences, is best known for his work in behavior psychology.
One of his interesting points is that intuition may feel right to us, but the accuracy of intuition is based on the number of patterns our brain has observed.
If you have hundreds or thousands of patterns for some task, your intuition is pretty good. If you have very few patterns, including zero patterns, your intuition is usually wrong.
This is the challenge for home sellers. What they believe "feels" right, even if it is not. They lack the patterns of pricing a home to sell, and they lack the patterns of studying other homes for accurate value assessments.
The Buyers are Not Fooled
While sellers often fool themselves, the buyers are not emotionally connected with the homes. At least not yet.
At the same time, the wealth of information about home prices and market data available online has produced THE most informed buyers in history.
Most have looked at enough homes, online or in-person, that they have developed a better intuition about value and price than the sellers.
Today's buyers can spot overpriced homes quickly. And they skip over them, often just from the online information. In today's fast paced world, few people will take their time to visit homes they believe are not reasonably viable options.
The Market Always Speaks
How do you help sellers who overprice their home based on the lies they tell themselves. Unfortunately, facts do little to help, at least not at the beginning of the sales process.
The market is always speaking to sellers, even if they have not learned to listen yet. In each market, there is unique period of time when a lack of activity for a home tells only one thing: The home is overpriced for the current market. Period.
The issue is not location, condition, age, features, or market trends. ALL of those may influence buyer interest and EVERY ONE of them can be overcome with price.
The only exception is a home that is not marketed online. In this case, the seller is trying to sell a secret, so lack of activity is due to lack of buyer awareness. However, in this modern era, a home not marketed online is the rare exception (and often suggests another set of self-deception).
Facing the Lies
If selling the home is really important, the seller will gradually face reality but must do so on their own terms. Perhaps they keep the home on the market for two or more years before they can admit their lies.
Or maybe they use three or four real estate agents before the reality sinks in that perhaps it wasn't a failure of the listing agent to find a buyer, but instead it really is price.
It can be hard to accept that the home you love is not universally loved the same by others. It speaks to our need to be important, to value our property more than someone else's, and how memories influence our actions.
What to Do
Whether working as an agent or a buyer, it is important to understand where the seller is in their mind about the property value.
Perhaps they will accept new perspectives sooner than later. Or maybe they have had the home on the market long enough that the suffering has opened up consideration of their self-deception.
In some cases, sellers will adjust their thinking if given some time and the right presentation of data. In other cases, they may just have to lose more money and time before reality forces its truth upon them.
We can all do our best to help the sellers understand why their intuition is fooling them. There are a host of techniques we can all use to better understand others, and, in turn, help them help themselves. A discussion of these techniques is for another day.
In the end, it is up to us to understand that we are all human, and some of us take more time (and more patterns) before we grasp the truths before us.
Empathy is a key to connection and engagement. Once we have that, we can build trust and that allows us to help others better.