Monday Madness

Lies, Damned Lies, and Statistics:

This well-known saying is part of a phrase attributed to Benjamin Disraeli and popularized in the U.S. by Mark Twain: There are three kinds of lies: lies, damned lies, and statistics. The semi-ironic statement refers to the persuasive power of numbers, and succinctly describes how even accurate statistics can be used to bolster inaccurate arguments. [Wikipedia]

My handsome and wise boss, Glenn Kelman, has initiated a scientific approach to selling a home, beginning with a white paper called “Seven Tactics for Selling a Home“[pdf]. Well there’s lots of discussion about the science, the tactics etc, and you are welcome to join in the forums or right here.

The science project has been a long time in development and covers a lot of ground, and has a long way to go before it is fully developed. Nevertheless we can begin today with praise and condemnation because that’s what Americans do. Let me be among the first to praise Science (and pick a bit).

Praise: The man is right- without cold, impartial science we are wallowing in superstition and anecdotal evidence. It’s easy to believe that because you’ve sold 10, 100 or 1,000 homes you know it all but will that experience stand up to stats based upon 100,000 sales? Selling an item of such importance to all parties involved should entail some rationality and basis in solid analysis. Some attempts are still primitive. Many people point to the Zillow.com price estimates as inaccurate for instance. All in good time, I say.

Picky: There’s more to selling than statistics. Wall Street has had statistics up the schnoz and still some get rich and some fail. One thing you hear wise investors say is ‘don’t follow the crowd’. If you sell when everyone is selling & buy when everyone is buying, you’ll always be a step behind. You will lose!

Here’s an example: Number six of the Seven Tactics says stay at home. Don’t leave the house empty or the price could be forced down. I’m hearing arguments from staging consultants that an empty house that has been staged is likely to fetch a higher price. Just to be ornery, I’ve suggested that an owner occupied house, though it may be a bit messy can attract the buyer who is leery of a staged house. Personally I’m always leery of anyone who is trying to sell me something, especially if they have the ability to manipulate the product before I can inspect it.

The message in this case is to know the property, and to know the prospective buyer for that type of property so you can understand how to show it. If the stats say don’t leave the house empty, that’s an additional thing to consider, but be willing to break the ‘rules’.

In the end, science and clearly considered tactics are just another tool in your kit. Psychology is also important (but whether that is science is an argument for another day).