If anyone has done some reading lately, they couldn’t possibly miss the psychology book Thinking Fast and Slow by Daniel Kahneman, a seminal book on our cognitive biases based upon the concept that we all possess a fast and a slow brain. This book is one of the most cited works in many of my recent readings, including books on psychology, trading, investments, economics, etc. So I decided to read it.
Kahneman’s basic idea is that humans tend to react mostly with their fast brains. This sort of makes sense due to where we came from. Out on the savanna it is difficult for us to sit there and ponder the chances of being caught and eaten by that great beast that is chasing us right now, we simply have got to react. To see how this works, try answering the question “what is 5 times 5”, you likely intuitively said 25. This was processed by your fast brain. Now what if I asked you what is “15 times 17”, unless you are Einstein, you likely had to sit there, activate your slow brain and think about how to actually do double digit multiplication. Kahneman’s idea is that people like to use their fast brain because it is soothing, easy and full of biases (I bet you that your brain liked you better when it was doing 5 x 5 and hated you when it was doing 15 x 17).
So what does this have to do with real estate. Well, quite a bit. I was recently asked about selling strategies and I blurted out this line “sell fast”. The client intuitively thought I was making a prediction on the current market and for him to jettison his property right away. Actually, that is far from the truth. What I was thinking was to make a presentation that appeals to our fast brain. The basic idea of selling is to elicit a positive visceral reaction from that fast brain that is soothing and bias prone. As agents, what we are really doing is drawing from our experiences of details that will react to that fast brain. This experience must encompass all aspects of the process. From the moment the listing hits the internet, to the showing process, to the completion process, if a listing is presented in a way that is pleasing to the buyer’s fast brain, it will sell fast and for top dollar. To learn how to do that, call me as we have now perfected a selling process that does precisely this. (sorry of the shameless self promotion)
When you are buying a property, the tables are turned. Now that I just made you aware of your biases, maybe it is time to turn on that slow brain of yours that is far more analytical. Does this property, despite of all the comfort it has appealed to your fast brain, actually make sense today, or five years down the road (I can guarantee you your fast brain is not programmed to react to things that are not even in the realm of happening today, ie needs down the road). So during the buying process, we need to be slow and meticulous, sit back and think hard (sometimes this will give you a headache, but trust me, you want that now, not later). Hence, we need to buy slow.
So there you have it, the tricks to winning in real estate, sell fast buy slow. Oh, and that book has a lot more gold tidbits than just this small idea that I have chosen to elaborate on. It is truly a masterpiece. In fact, if you have read this far down my blog post, may I interest you in reading the book itself? Call me to borrow it, it’s sitting in the exponential library on my shelf.