Be careful of ownership bias when selling your home

Selling a home is often a deeply emotional and significant financial decision. The personal attachment we have to our homes can sometimes cloud judgment, leading to what is known as ownership bias. It is important to overcome this bias to ensure a timeous sale at full value.

Ownership bias is a common psychological effect where individuals tend to assign more value to things merely because they own them. This bias can lead homeowners to overestimate their home's worth, making them reluctant to price it competitively or accept reasonable offers. This can make it challenging for them to find a willing buyer and conclude a successful sale.

We are all equally susceptible to this physiological phenomenon, so it is important not to assume that you are immune to it. Consider, for example, that you have just renovated your kitchen. While you may love your newly installed marble countertops, it is possible that buyers in your area are not as enthusiastic about this upgrade as you are. This might lead you to falsely believe that your home is worth more than what buyers are prepared to pay for your home.

Because of this ownership bias, homeowners often want to set their initial asking price too high, believing their property is worth more than comparable homes in the neighbourhood. After all, you prefer your home above all the others listed in their neighbourhood, so why wouldn't buyers prefer it too?

The reality is that an overpriced home often results in a stagnant listing, forcing the seller to eventually lower the price, sometimes multiple times, which can make the property seem less desirable.

By leaning on the advice of an objective third party, like a real estate professional, homeowners are able to guard against their ownership bias. "It's essential to trust your agent's expertise and be open to their recommendations, including staging tips, marketing strategies, and realistic pricing. Remember that it's their job to know what buyers are looking for in your area and what they are prepared to pay too. It will only be to your benefit to lean on their market insights and expertise.

Here is a look back at the role of a real estate agent and what you need to know

Agents do not only sell or rent property on behalf of their clients, but also have their ear to the ground in terms of what current property values are, how much properties might sell for, and what is happening in the property market.

With so many newcomers to the market, often making lofty promises of high prices and quick sales, it is easy for sellers to get caught up in the hype. A property which simply sits on the market with no or low offers can be very frustrating for buyers.

The role of a good agent in getting your property sold as fast as possible, and for the best possible price cannot be overstated. A bad agent could leave you with a lengthy and frustrating sale process.

Regardless of when you are selling, but especially in the current market, it is important to ensure you choose the right agent for your property and market. If you are not aware of who the best agents in your area are, ask around for recommendations from neighbours or friends.

Always meet the agents in person before appointing them:

This will give you a chance to ask questions and assess the agents. Check how long they have operated in the area. Each area is different and local expertise is a vital point of advantage for any seller.

Look for a successful sales track record:

Ask for a list of their recent sales in the area, how long it took to sell, and the prices achieved. A strong sales record is an important indicator of the likelihood of success and that the agent could find the right buyer for the property.

A strong brand and network is another advantage:

An established brand will have a strong online presence for maximum exposure of your property backed by the latest technology and marketing and sales methodologies. They will use best practice to market and sell your property.

Look for someone who will assist every step of the way:

Selling a property is a complex process with many legalities to be taken care of. A good agent will explain the process and guide the seller to ensure they have all the necessary documents and maintenance done for an efficient selling process.

Choosing the right agent to sell your home cannot be over-emphasised, especially if you are selling right now as you will not want to waste time. Choose the right agent and ensure you follow their advice.

Ownership bias is a natural but potentially costly pitfall when selling a home. By being aware of this bias, trusting professional advice, and adopting a buyer's perspective, you can navigate the emotional landscape of selling your home more effectively and, more importantly, you will also have a better chance of selling your home for its full market value.

Extract from Property 24