Oct 11
20
Anyone who has been around the Rev N You scene for awhile knows that am an avid learner on anything related to the subject of influence, persuasion and marketing. Today I read something that illuminated something I thought to be the case but didn’t really KNOW … it was research from a study done by Kahneman and Tversky in 1984 (and has since been backed up by several other studies similar to it). The results explain just exactly why sellers can be a giant pain in your backside!
The study:
Basically they gave students mugs. The students were then given the opportunity to the sell the mugs to another group of students. After only owning the mugs for less than 10 minutes most students were not willing to part with their mugs for less than $7.12 on average. Conversely the students wanting to buy the mugs were not willing to pay more than $3.12 on average for a mug.
You value what you own – even if you paid nothing for it!
The funny thing here is that the student could make $3.12 from a mug they were GIVEN. That is a $3.12 profit but were hanging out trying to get $4.00 more because that is what they FELT it was worth.
As real estate investors you’re probably trying to buy the mug that is worth $3.12 for $3.00 (or less) and the person selling the mug thinks it’s worth $7.12.
So now what? Currently the Nanaimo real estate market (where we live and invest right now) is making turtles look pretty fast. It’s slow. Dan Morris, a realtor in town with a ‘tell it like it is newsletter’ wrote in his October issue that “2011 continues to set a 10 year record for the lowest number of sales … we have to go back to the year 2000 to find fewer sales year to date and even further back for the month of Septembers sales numbers.”
Honestly – that is fine with us. We have our pockets of potential within the city all picked out and we are comfortable with what we’re doing. The slow market SHOULD be a good thing for us as buyers.
The part that can be frustrating is getting the sellers to wake up and smell the reality of 2011. We encounter this ALL the time. We’ve been making offers on this one house ALL YEAR!! It’s a good one for our rent to own program so we keep watching it. The listing price is finally down to $325,000 which only puts us $10,000 away from what we can pay for it so we thought we’d FINALLY get to a deal … but they countered at $324,000. <SIGH>
The market conditions right now can make for great buying opportunities (we are still finding and doing deals … ) but you’re going to have to be patient and persistent.
I wanted to share that little insight into the mindset of sellers because I found that study pretty interesting. I wish I had a clear solution to make the challenge go away but it’s how we’re wired as humans. I guess, now that you’re aware of it, maybe you’ll recognize it in yourself when you’re selling?? Maybe …
Even crazier are the studies I am reading right now about how what you watch, listen to and think about influences the next thing you’ll consider. Check this out:
Say the following word five times, then continue reading:
BLOOD
What color does a traffic light have to be to proceed?
Did you say “red”?
Oh yea!!! Pretty wild (credit for that little gem goes out to Kevin Hogan in his book The Science of Influence: How to Get Anyone to Say “Yes” in 8 Minutes or Less!
Anyway – to pick you up a little bit – how about I share some pictures of the project we’re working on?
The Old Character Home Beautification Project …
The exterior is where the majority of the work is involved. We have just finished removing 4 layers of roofing, started to bring the plumbing inside (it’s currently on the exterior of the house), and begun the replacement of the fascia boards and addition of gutters. Next the windows come out and the siding is changed from stucco to HardiePlank. We’re trimming and cutting trees next week too.
I lovingly call these two sheds and the garage you can see on the other side of the deck the “rat caves”. The neighbour told us that the garage had a major rat infestation a little while ago and she had to call in the by-law officers to deal with it. We’ve hired a guy with a bob cat machine to come in and tear it down … none of us wants to hang out in the rat cave for the tear down. 
That’s Wes inspecting the rat caves … Wes is my brother and the best damn carpenter we’ve ever worked with. We have FINALLY got him on the team on a more full-time basis. If you’re in Nanaimo or Victoria and need some top notch carpentry work from a renovation specialist let us know. There’s always down time in our jobs and he can help you out in between!
Anyway … here’s a few inside shots where painting is the primary project … oh and the bathrooms. Oh yes … the bathrooms.
Kitchen is actually pretty good. We’re replacing the flooring, bringing the plumbing indoors and adding a hood fan for the stove but otherwise we are looking good in the kitchen.
Not so pretty … so we’ll be working on those. In fact Wes and our plumber have already gutted them so the fun is underway. The rest of the house just needs paint.Take this room for example:
It’s really sad Kermit the Frog had to die to paint this room …
Ok seriously … there is lots to LOVE about this house and the lot it’s on. The transformation is going to be fun! We won’t have anything TOO exciting for you visually until mid-November once the windows and siding are done but if you want progress updates be sure to check our Facebook page as we’ll be posting pictures regularly (this project is about a 4 minute walk from our office so … we are there all the time!!).
