Tuesday, February 12, 2008

How many houses should I see before making an offer?

The ultimate trick question! Especially in today's market, where there seems to be a half-dozen homes for sale on every street.


My historical answer (as politically correct as it may be) has been "as many as it takes." I've worked with enough buyers to know that people are inherently different; some will buy the first house they see, while others will look at homes for months, or even years, before they're ready to make the move. But that's ok – I've always strived to give top-level service, regardless of how long it takes.

I figure that over the long haul it all balances out, and I end up with lots of happy clients. I've even assumed that the clients I worked with for a long time would appreciate my service that much more, since I didn't do as much to help my shorter-term clients find their home.

That may not be the case. I've spent some time reviewing my business, looking at where my referrals have come from, and what type of client referred them. Turns out a significantly higher percentage of my referrals come from clients who picked out a home on the first or second time we went out looking.

What does this mean? Maybe these clients are happier & more decisive in general, and more apt to make a referral. Maybe the longer my clients work with me, the less they like me (although I hope this isn't the case!) Maybe the more homes a client looks at, the more overwhelmed they become, and ultimately the less happy they are with the entire process. I think there's some validity to this last point..

Barry Schwartz wrote a book in 2004 called The Paradox of Choice: Why More is Less. In it he talks about the overwhelming amount of choice exhausting our brains, ultimately restricting instead of freeing us. 900 cable channels but nothing good on tv? Easy fit, relaxed fit, and loose fit jeans, but none of them fit right? I think Schwartz's theory is currently being acted out in our over-supplied real estate market.

Tim Ferris wrote an excellent piece on this same topic last week (which actually started me down the road of analyzing my own business.) He went to Barnes and Noble to exchange a book – a five minute errand, right? 30 minutes later, feeling completely overwhelmed, he left the store with the same book he had originally brought in!

How many houses should you see before making an offer? As many as it takes to find one you love. However, if you can convince yourself to buy the first one you love, at a reasonable price, odds are you'll be happier than if you force yourself to see all 100 homes available in your area before making a decision.

Food for thought, anyway.

Your occasionally falls victim to paralysis by analysis Realtor,

Chris Butterworth

[tags] inventory, Tim Ferris, Why More is Less, Fletcher Heights [/tags]