Then one day the traveler came across something he had never seen before: a man standing beside a lovely home and beating his head repeatedly against one of its stone walls.
The traveler watched with amazement until it was time to move on. Before leaving he said: “Please excuse me, sir. I don’t mean to be rude or interrupt, but I’ve traveled far and wide and I’ve seen the Wonders of the World… but I’ve never seen a man beating his head against a stone wall before. Would you please tell me why you do this?”
The local stopped beating his head against the wall of the stone house. An expression of relief spread across his face as he turned to look at the traveler and replied: “Because it feels SO GOOD when I stop!”
As I write this article, 27 percent of the active listings for single family homes or condominiums in Laconia have been on the market for more than 200 days. About ten percent of them have been on the market for 399 days or more. For context, in 2018 the median number of days on market for Laconia homes was 29.
If you ever have a Lakes Region property for sale that has been on the market without selling for more than, say, 180 days, it may be time to stop beating your head against the wall and try something new.
An excessive number of days on market broadcasts a signal to both buyers and their agents that says, “Something might be wrong, proceed with caution, if at all.”
Scientists who study persuasion psychology have identified three powerful and proven psychological factors that can help us understand this reaction: the principals of primacy, scarcity and social proof.
The “primacy effect” asserts that our first impression strongly shapes our lasting perception of a person, place or thing.
For example, if a job seeker shows up late for an interview, the manager’s perception is tainted by the unprofessionalism of that late arrival, even if that candidate is experienced and qualified for the job.
When it comes to real estate, a prospective home buyer’s perception of a property is filtered through her initial impression that the property has been on the market for a really long time. This can taint the perception of a property’s positive features, just like a late interview arrival can compromise a candidate’s chance of getting hired.
In turn, the primacy effect triggers the next psychological reaction: “social proof.”
Social proof means we take cues from what the masses do, in order to guide our own decisions. This is especially true when we feel uncertain, and few things make people feel more anxious than the expense and commitment of buying a home.
To give a common example of social proof, have you ever purchased an item online based on the strength of hundreds or thousands of positive reviews? That’s social proof. On the other hand, if you ever avoided going to a movie or buying a product because it had bad or mediocre sales or reviews, that’s also social proof.
The more people who do (or don’t do) something, the more of a no-brainer it feels to take the same course of action.
In real estate, an excessive number of days on market can shout: “It’s been a year and half and no one else has bought this place… there must be some reason why… maybe I shouldn’t bother looking.” If you aren’t getting regular showings from legitimate buyers, social proof may be why.
Finally, there is the “scarcity” response, which refers to the fact that when something is less available, we value and want it more. If you’ve ever been in or seen video of a Black Friday Sale in which shoppers are acting insane, it’s because of scarcity. This response is quite powerful because it is literally tied to survival instincts. (Today it causes mild mannered mothers to engage in fisticuffs over the limited number of Tickle Me Elmo dolls.)
The flip side, however, is that the MORE available something is, the LESS we value and want that thing. That’s why granite is less expensive than diamonds, and why a home that’s been available for sale for more than year doesn’t trigger a Black Friday crowd.
If you ever find yourself in a position where your property has been on the market for multiples of the median days on market, and you’re tired of beating your head against the wall, there are several approaches you can try.
The most obvious approach is to match the list price to what the market will bear. When it comes to pricing for sale, the collective wisdom of the market (social proof of the masses) trumps what Zillow says, or even what the home owner paid, wants, thinks or feels the home is worth.
If the market is giving you evidence you’re priced too high, then be objective as possible and lower the price appropriately.
Alternatively or additionally, you can ask your agent to try a new marketing approach.
How long has it been since the listing remarks were updated? Given the frigid temperatures, are there cold-weather positives (like an attached garage, updated heating system, quality insulation, proximity to ski areas) that aren’t highlighted but should be?
Did your agent prepare a quality full-color brochure of your home in order to make it memorable, or are they just handing out printouts of the listing? Does your property have its own website? What could be done for promotion besides listing the property and planting a sign in the yard? Maybe ask if your listing agency can take Matterport® 3D images of your home—it’s like Google Street View for properties, allowing amazing virtual tours that can help prospective buyers see what others have missed.
An excessive number of days on market broadcasts a negative signal to both buyers and their agents, one that compromises sales and negotiations. Maybe it’s time to stop beating your head against the metaphorical wall and experience relief by trying something new.