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Why this 20% Rule Matters to Hard-to-Sell Homes.
Dated: May 30 2020
Remember that buyer in the market for a 3 bedroom/2 bathhouse? Let’s assume the agent found him five houses to preview. Each meets his general criteria, and is located in the area he hopes to live.
He and his agent drive out to look at the five houses. They all have very similar features. The prices are comparable. In theory, you might think the buyer will have a hard time deciding between houses.
No matter how similar they may seem,
no two houses are exactly alike.
In real life, that is not the case. The 80/20 Rule comes into play. Imagine four of the houses don’t have a pool, but one does. He is not aware of this though, because the agent didn’t mention it.
The buyer sees the four houses that don’t have a pool. He isn’t particularly interested in any of them. Then he sees the fifth house, and the pool! Suddenly, he is ready to make an offer. He may even pay full asking price, even though this house is more expensive than the others.
The 80/20 Rule in action:
Buyers focus on unique features.
His offer isn’t based on the 80% of features this house shared with the rest. Instead, his bid is based on one unique attribute: a pool. The 80/20 Rule predicted the sale of this house.
Sadly, in this case, much time was wasted finding the perfect house. Had the agent known to look for the 20% difference, this may have been their first stop. As a seller, you can leverage the rule to work in your favor. Draw attention to defining characteristics in your home.
Here is a real-life example. An agent has a client visit from out of town. He did not have a list of criteria, he just liked the area. She drove him from house to house. In each case, this buyer suggested offers 10-20% below the asking price. He would not budge. She began to worry. The whole day was turning into a big waste of time.
As the sunset, they stopped at one last house. It did not have a lot of curb appeal. It was not a good-looking home. She was out of options. Nevertheless, this house broke the tough negotiator down.
He was suddenly willing to offer the full asking price! You may wonder what set this house apart from the others. It was not because he had a thing for ugly houses. Nope. The 80/20 Rule kicked in again.
The 80/20 Rule in action: Buyers pay more for unique features.
This agent and her client spent the whole day looking at houses that shared 80% of the same features. He did not care about any of those details. A bedroom was a bedroom as far as he was concerned. He fell in love with the one remarkable feature of this house.
This plain Jane house had something special. As you walked into the great room, there was a large window. The house sat atop a hill with a gorgeous view. And to top it off, the sun was setting below the distant tree line. That view sold the buyer. The other 80% could be improved.
He did not buy the house because he liked the floor plan or the number of bedrooms and bathrooms. His decision was completely based on the hill and view. That view caused him to stop negotiating and offer full price on the spot. Such is the power of the 80/20 Rule.
Learn how to tap into this rule and you will not have to settle for less than your asking price. Leverage a unique selling point. Buyers who fall in love do not haggle over pricing; they make good offers.
In some cases, the 80/20 Rule even helps people make a sale without conducting a showing. This is a huge time saver. The house in the following example had languished on the market for months.
Unlike the previous house, this place was not ugly. On the contrary, it was a brand new custom-built home. But nobody seemed to care. It sat on the market for over seven months without a single offer.
The builder was baffled. His fancy new house would not sell. He ended up firing his agent and hiring a new one. Fortunately, the new agent knew the importance of finding that special feature. He drove out to give the house a thorough investigation.
What he found changed everything. The house has a gorgeous 5-acre yard. Other houses being sold in the area were all on 1-2 acre lots.
Not only was the yard bigger, it was more private than other lots available. The new real estate agent marketed the 5 acres. He mentioned details and a description of the house. But, he focused attention on the lot.
The house was not the main selling point, so he shifted attention to the 5-acre lot. In no time, his phone rang! A buyer was relocating. He had noticed the house was or sale, but it hadn’t caught his eye.
The 80/20 Rule in action: Buyers are searching for unique features.
That changed when he learned it was built on a 5-acre lot. All of a sudden, he was very interested. So interested, in fact, he submitted an offer from 1,000 miles away. He had never ever seen it in person.
He was afraid someone else would buy it before he could, and he would lose out on the perfect house. That sale happened in 45 days.
The builder was amazed! His house had been on the market close to eight months without so much as a nibble. Suddenly it was sold. Purchased sight unseen, all because of the 80/20 Rule.
By shifting focus to the 5-acres, the real estate agent captured the interest of buyers immediately. The house was no longer unsellable. On the contrary, for a short time, it became the hottest house on the market.
Don’t create an advertisement similar to every other house in the area. Instead, turn a spotlight on something different about your home.
You will attract interested buyers. Buyers willing to pay full price.
Selling to Interested Buyers
Find something unique about your home. Build advertisements around that one time. It will catch people’s attention. Buyers who are looking for that one item will ask to come see your home in person.
As a result, you will stop wasting time showing to people who are not interested. Instead, you will be showing your home to buyers who are motivated to make a purchase.
You won’t have to show it quite so often. You also won’t have to sift through lowball offers from apathetic buyers. This means less stress for you.
With that in mind, it is essential you take time to uncover your home’s most attractive and unique features. Compare notes with other houses in the neighborhood to see what makes yours stand out.
Potential Unique Features
Each house will have its own unique features. You may already have some in mind. If not, these ideas should help to get you started:
· Hilltop views are an excellent defining feature. Like the example from earlier, a high vantage point comes with a spectacular view of the surrounding area.
· Maybe your home looks out onto an open field frequented by wildlife. Many people would like that view.
· Your house might even have an unobstructed view of the sunset. That would interest potential buyers.
· Patios are another great feature. Maybe the rest of your neighbors do not have patios, or their patios are smaller. That vital feature could help you sell your home.
· Location is something else that can set your property apart from others. Not your addressed location but rather your location compared to the surrounding homes.
A buyer once paid extra for a townhouse simply because of its location in the complex. Most of the surrounding homes did not have any yard. However, a few shared a large half-acre “yard area”.
One of the owners whose townhouse backed up to this yard area was able to sell his townhouse for a higher price. It set his property apart from others on the market.
His home has a characteristic shared by fewer than 10% of the others. He had only available listing offering that feature. With his easy point of difference, the house sold for a higher price.
Another townhome seller (in the same complex) found a different unique feature. He did not have a yard, but she was still able to use his location to his advantage.
His property backed up to a lake and fountain. The extra feature helped him sell his townhouse quickly and for a great price.
· You might have a private location. For instance, your lot may be partially concealed by trees, or you might have an empty lot next to you. Use this to market your property.
· You might have a unique backyard. If you have a larger backyard than your neighbors do, use that to your advantage.
· A shady backyard can also help you sell your property. Some people like the idea of lounging in the shade.
· A fenced in backyard is also a big selling point. People with kids and pets flock to homes with fenced-in backyards.
· You can also look at other features. For instance, a finished basement can help you sell your home. You can also market a large attic, and extra-large garage, a swimming pool, or anything else that makes your home stand out.
Look for the 20% difference and find a way to market it. That is how you will get results. You cannot just throw the information into your listing, though. You have to take the right approach.
For the majority of people, the purchase or sale of a home is their largest single investment. My goal is to guide you successfully and easily through the contractual, investment and emotional decisio....