Brad and I hadn’t seen each other in a while.
I stopped into his office to pay my insurance bill and we got to talking about life, and business.
As we discussed business he was telling me a story about a client who wanted to insure an expensive piece of jewelry.
In his business, the insurance premium is directly proportionate to the value of the item being insured.
His client, in order to keep her premium low, claimed that the jewelry was worth $4,000.
Lo and behold the item was stolen. When filing the insurance claim the client claimed the item was worth $7,000. Interesting.
Of course Brad had to remind his client that she claimed the value was only $4,000 when setting the premium so indeed the claim was only worth $4,000.
People see what they want to see.
Recently, I read a book by Scott Adams. Not my son Scott Adams, but the creator of the comic strip Dilbert.
The name of the book is Win Bigly – Persuasion in A World Where Facts Don’t Matter.
The premise of the book? Facts don’t matter. People will believe what they want to believe, they will see what they want to see.
Persuading them has little to do with facts and more to do with finding the most effective tools to shift their perception.
In the book he discusses cognitive dissonance. Cogniwhat?
Adams explains it like this:
“Cognitive dissonance is a mental condition in which people rationalize why their actions are inconsistent with their thoughts and beliefs. Perhaps you believe you are an honest person, but you observe yourself doing something dishonest. Your brain will instantly generate a delusion to rationalize the discrepancy.”
Like Brad’s insurance client, I observe real estate clients suspending reality and deploying cognitive dissonance on a regular basis.
For instance, a few months ago I was showing a client some homes for purchase. Each home, as we toured, was picked apart. The couple was critical of almost every aspect of the home. They were in “buy mode”.
We’d walk into the house and the conversation kind of went like this: “Oh, this kitchen is too old,” or “wow all of these floors need to be redone.”
Normal. Nothing wrong with those conversations. In fact, it is what I encourage. Folks need to know the true costs of purchasing a home, not just the asking price. Again, nothing unusual.
We ultimately found them a home to purchase and it was time for them to sell their home. That’s when cognitive dissonance reared its head.
Suddenly, “their home” didn’t need any work. They couldn’t see the flaws that were so clear to them when they were looking to purchase. Just like Brad’s insurance client, they could only see their side of the story.
Again, this is normal. It’s not good or bad, it’s just the way people are wired. We are self interested. We see what we want to see.
My job is to persuade them to think like a buyer when selling their home, to suspend their own personal bias and view their home as a buyer would view it. To see what the buyer sees.
In my sixteen year career the biggest mistakes I’ve made is allowing a client to list a home that is overpriced. You know, too much money for the amount of work that needs to be done. In those cases, I was not good enough at persuading them to see it from a buyer’s perspective. For not overcoming cognitive dissonance.
It’s why I now push every client to think like an investor. To become unemotional and evaluate their home from the buyers perspective and to do the preliminary work necessary to sell the house for the most money in the shortest amount of time.
It’s okay to be self interested, but it’s also important to be aware of our own bias.