In an often repeated survey around the world, over 90 percent of people believe they are “above average” drivers.
Clearly there’s a disconnect from reality here as, by definition, 50 percent of people are below average drivers.
Call it delusion, call it bias, call it cognitive dissonance. Call it what you will, we are fickle creatures and at the whims of illogical emotion.
Homeowners have a similar bias. Most of us believe our house is amazing! The best!
Better than our neighbour’s place for sure. Better than that place that sold around the corner that had the ugly render.
Certainly better than when we bought it, before we cut down all the ugly silver birches, concreted the backyard and painted the whole house mustard yellow…
Oh dear. I’m joking. The colour is actually ‘Tuscan Sun’.
Of course you love your house. After all, you bought it! You brought up your kids there, you improved it, hosted some epic parties there.
But this kind of emotional bias often leads to unrealistic price expectations when it comes time to sell.
One of the most difficult parts of our job is managing our vendors’ expectations.
This is challenging at the best of times, but even more so when the market is transitioning, like now, from the hottest market we’ve seen in decades, to a more normal selling environment.
Think about it. If all our vendors’ price expectations happened to be below market value (as in, what a certain buyer is prepared to pay for it), we would have a 100% success rate and every single one of our vendors would be thrilled with their result.
If all of our vendors expectations happened to be (rigidly) above market value then we would not be able to sell a single property and would soon be out of a job.
In an incredible (rapidly rising) market like last year, prices were keeping ahead of vendors’ expectations, and therefore the majority of our vendors were achieving their “happy price”.
Less than one percent of our vendors didn’t achieve their price and withdrew their home from sale.
Contrast this to the challenging (rapidly falling) market of 2018/19. Only a handful of vendors achieved their “happy price”, with the majority who sold having
to grin and bare a price that was very uncomfortable to accept but at least enabled them to move on.
At one point were we handing back to the keys to about 40 percent of our vendors because we simply couldn’t find a buyer and/or they weren’t willing to meet the market. And understandably so… All that Tuscan Sun paint is expensive!
Fortunately, most of our wonderful vendors are motivated, and motivation is the perfect antidote to unrealistic expectations.
We actually don’t have too many vendors who are overly unrealistic. We make a concerted effort not to take on listings where we believe this could be the case.
At the end of the day, most vendors just want to know that someone else will love their house as much as they did and pay a fair price for it.
Thankfully the market is still good so it’s not too hard to achieve a fair price right now… maybe even a “happy price”.
Drive safe.
David Sciola 