The Peril of Herd Mentality House Pricing

Of course, the herd MUST be heading the right direction, right?

Maybe not!

What happens when the lead cow starts heading towards a 1000′ cliff?

Well . . . odds are good (without question) that most, if not all, of the herd will follow and perish. There’s an inherent tendency for folks to trust the herd . . . It’s a “safety in numbers” comfort zone thing.

To some degree, we ALL go the way of “the mass of men (who) lead lives of quiet desperation.”  (Henry David Thoreau)

We love “crowdthink” especially when the herd is going the direction we wish to go – in alignment with our goals and aspirations. We yearn for validation and “belongingness” and join the natural flow of this herd because it feels good . . . that wonderful feeling of travelling with others whose ideas resonate with our desires.

Just as this can result in catastrophic ends with the aforementioned cattle, so can it be DANGERous for well meaning folks who see dollar signs in their minds when they notice that their next door neighbor has a “House for Sale” sign in the front yard . . . and they discover that the price of the house is WAY more than you thought it could be.

Next day . . . another sign pops up in front of a house down the street with a similar price.

Hmmm . . . If THEY can sell THEIR house for THAT much, I definitely should be able to sell MY house for MORE because my house is WAY better than theirs . . . so those signs . . . They continue to pop up in more yards as the herd forms. Surely, all of us can’t be wrong, right?

So . . . I call a REALTOR friend to list my “Castle” as soon as possible. I want to get while the gettin’s good.

My REALTOR shows up and seems less enthusiastic than I expected. In fact, she seems to be a bit “Debbie Downer pouty” . . . Why isn’t she as excited as I am?

Unfortunately, she tells me she has some unfavorable news to break to me. She tries to lighten things up a bit by saying that this will just be a pinch of reality . . . y’see, she has what she calls a CMA (Comparative Market Analysis) and it tells her that the ENTIRE neighborhood has priced their houses @ 12% higher than the recently closed sales of similar houses . . . and that they are soon all going to be competing in a race to the bottom.

While this is not what I wanted to hear, I am thankful for this (my favorite) REALTOR who was willing to tell me the TRUTH. She saved me from the tumultuous experience of myriad showings and price reductions and uncertainty by advising me to listen to the market and price my house competitively.

Yes! I was late to the party and advised not to follow the herd, so my house SOLD at a reasonable price very quickly.

Thanks to the herd, MY house was standing in a field of its own as a “Good Value” for appreciative Buyers.

Some times it behooves us to Break away from the pack

Published by Barry Owen

Strategist-CEO of Pareto Realty Real estate sales Professional Inviter-Facilitator-Practicer of Open Space Technology Opening safe space for people & organizations to self-organize around issues & opportunities BarryOwen.US Invite-Listen-Love

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