When selling real estate, the goal is always to get the highest sale price possible. In some markets this is easy. According to Zillow, in 2017 nearly 1 in 4 homes sold over the listed price, and in some cases, far over. While the area, home type, and other factors come into play, understanding some basic psychology can help create the best chance to sell for the highest price.
Find a Good Agent
Psychological Trick: Overconfidence Bias
What it says: People tend to think they’re smarter/more skilled than they are
Why it matters: Pricing a home wrong can lead to not selling or leaving money on the table
What to do: Talk to a few agents before hiring one or deciding to go it alone. From the outside selling real estate can seem like a really simple process, but once you get a look under the hood it starts to become clear the advantages you could see by hiring a professional.
Price It Right
Psychological Trick: Reciprocation Tendency aka Foot in the Door Phenomenon
What it says: People are more likely to give you something reasonable if you ask for something outlandish first.
Why it matters: A home priced at $215,000 seems like a great deal if another property in the area sold for $275,000 even if the houses aren’t similar at all.
What to do: Unless the home for sale is the nicest one on the market, it’s wise to price property in the middle of the field. When buyers see the highest price, suddenly everything below it seems reasonable, whether or not it is truly comparable.
Host an Open House
Psychological Trick: Envy/Jealousy Tendency
What it says: People will want what others have and are reluctant to give it up to others
Why it matters: If a home appears to be popular, buyers are more likely to put in more aggressive offers than if it seems like a property no one else is looking at.
What to do: Schedule an open house event on a weekend afternoon when there isn’t a lot of competition from other local events. Sure, some “just looking” people or nosey neighbors may show up (thanks, Curiosity Tendency!), but even that will help to make the home look even more popular!
If It’s Fixable, Fix It
Psychological Trick: Confirmation Bias
What it says: People tend to look for information that supports their beliefs and reject any information that contradicts their beliefs.
Why it matters: If a buyer thinks the home is overpriced, they’ll look to confirm that belief by finding all the small issues they can.
What to do: While living in a home it can be easy to look over minor issues like a burnt out bulb in a light fixture or dingy looking outlet faceplate, buyers will see these issue and wonder what other maintenance tasks have been skipped. Take a walk through the home with fresh eyes and try to spot the wear-and-tear pitfalls. These fixes are inexpensive to do and can prevent potential buyers from creating a mental list of price-reducers as they walk through.
Make the First Impression Count
Psychological Trick: Anchoring
What it says: This is the tendency to jump to conclusions and base a final judgment on information gained early on in the decision-making process. Once an initial assumption is formed, it’s hard to see other possibilities.
Why it matters: There’s no second chance to make a first impression so it’s important that any property puts its best foot forward. If a buyer falls in love at first sight, it’ll be easier for them to continue to come back to that initial reaction after seeing the rest of the home.
What to do: Grass needs to be mowed, bushes should be trimmed, porch lights on, and any clutter cleared from view. If at all possible, have buyers enter through the front door instead of a garage or side door as most homes are designed to make the best impression from this entrance.