Why won’t sellers lower their prices, even though that’s probably the only way they can sell their homes?
Jonathan Miller has come up with three possible reasons:
Why is the seller so firm in their resolve to remain firm on price?
* Sellers are used to being in charge – They are simply used to the way things have been.
* Its about ego, not greed (buyers donâ€™t understand this)
* Sellers donâ€™t underestimate the power of – As applied to real estate, denial is a condition in which sellers cannot bear to part with their homes for less than what they believe theyâ€™re worth.
There is also the emotional side of it. Owners take pride in what they’ve accomplished – either because they invested time and money into renovations, or, more likely because they have fond memories tied up in the years spent in their homes.
From the Washington Post:
Economic researchers have found that emotions are a bigger influence than was previously believed in how people make financial decisions. For a long time, economists believed that human beings made decisions like robots, that people applied simple logic in making financial choices. But a body of research developed over the past two decades, known as neuroeconomics or behavioral economics, has shed light on how powerful a role the unconscious mind plays …
These studies have illuminated a few key concepts: Many people will pass up sure profits for illusory ones. Some will turn down profits if they believe someone else is unfairly profiting more. Some will even refuse to sell if they believe they may come to regret it because the fear of future regret can be as powerful a motivator as money in the pocket today.
Sounds believable to me. I see it, every day.
Source: Tearing Down A Brick Wall: The Problem With Sellers – By Jonathan Miller, Matrix
Also: For Sale, By the Owner’s Ego – By Kirstin Downey, The Washington Post