One of the things we learned the hard way during our real estate software start up was that when you believe something is going to work, you'll deliberately or even subconsciously ignore any feedback to the contrary, and you’ll focus only on the feedback that backs up what you already think. Most start up founders need to have such delusional conviction about their companies just to raise money and survive, it's easy to fall prey to this and it's a problem for property Sellers also.
It's called Confirmation Bias and it can also be a Seller's No.1 enemy when it comes to hiring an agent as well as preparing and pricing their property for sale.
Confirmation bias manifests in a few ways:
Only talking to people we think will agree with us.
Writing off people who don’t agree with us as idiots or haters.
Asking questions designed to support our hypothesis.
Let’s say you are interviewing agents and you ask one of them what they like about your home, and they respond by basically repeating the checklist you have in your mind for why your home is special. This is very exciting. So much so, that you probably won’t ask the contrary question: “What’s one thing that would cause a buyer not to purchase a home like this?” Asking that question is dangerous because the agent might say something you can’t fix or can’t afford to fix right now.
Quick example of two Sellers we know. Seller A chose us for our marketing plan but chose not to hear our points about house preparation or pricing to attract attention. The house had many desirable selling points that were not given an opportunity to shine. Instead the house was overly "personalized" and the light and volume of the home was hidden behind furniture and window treatments. Finally after 5 months Seller A received an offer from a buyer that we had immediate concerns about. That buyer ended up negotiating unrealistically, ignored deadlines and refused to close the transaction.*
Alternatively Seller B aggressively asked us questions about what needed to be done to make his home more appealing and valuable. We created a shared Evernote file with pictures, repair options, notes and links to products that would help him get his house market ready. He agreed to staging and though he had very limited funds he did what he could afford and the rest of the work he did himself. The result was that the house got picked up by a widely read online publication, received 28 offers and sold for 24% higher than list price. The difference? Seller B kept asking us, "What are the things that would cause a buyer not to purchase this house?" Looking back on it now, maybe his confirmation bias was that he knew his house needed love and we echoed that belief. Either way he prepared himself to hear some hard truths about his home and it literally paid off.
It requires a ton of humility from Sellers to remember they’re subject to confirmation bias.
You really have to choose to hear it. You have to very proactively and consciously shift out of this mode. You have to come back to neutral when going into conversations with prospective agents about your home and it's pricing. If you only hear positive feedback with nothing constructive to improve your home, chances are you're being played. Sometimes it's a good thing to hear how ugly your baby is.
For the record, we think the baby in the picture above is an awesome dude. It's the shirt that doesn't work.
* The Seller eventually moved out and let TheEastside.co paint and price the home accordingly. The property is expected to be on the market by April 15, 2016.