The Paradox of Choice is very basic terms is that you might believe you want as many choices as possible but invariably, it makes your life more difficult.
The studied two companies that offered 401K plans. The one company that offered three options had a significantly higher opt-in rate than the other company that had 37 plans to choose from.
We generally don’t want to make mistakes. The more important the decision, the greater the stress. The reason they believe that the second company had such a low opt-in was the employee was overwhelmed by the decision and the process of making the decision. Remember decision fatigue?
There are two kinds of people when it comes to how they make choices. There are the Maximizers and Satisficers.
From Wikipedia: A maximizer is like a perfectionist, someone who needs to be assured that their every purchase or decision was the best that could be made. The way a maximizer knows for certain is to consider all the alternatives they can imagine. This creates a psychologically daunting task, which can become even more daunting as the number of options increases.
The alternative to maximizing is to be a satisficer. A satisficer has criteria and standards, but a satisficer is not worried about the possibility that there might be something better. They just want it to be good enough.
This is why you do your best to only show your clients a few homes at a time and hopefully just a few in general. Both personalities are going to have trouble making a decision if they aren’t very clear on what they want.
The two strategies for you to use to avoid this paradox is to dial in on what they want and why, and really dig deep on the why, and not show them so many homes. This becomes hard with out-of-towners or people with restrictive schedules, but it is the goal.
I’ve shown buyers a lot of homes on the same day and in the end, not only are they fatigued but they are mixing up homes. I had a client put a different paint job on a house in their mind. They get confused.
Your job is to make this as easy as a process as possible for them. My inclination is to be a Maximizer. I wanted them to see everything. And back when I started, the inventory was much higher. Going through the downturn in 2008 inventory was through the roof as were the choices. I eventually learned my lesson and realized I was doing them a disservice.
In my first six months of real estate, I connected with someone from across the country that wanted to buy a home here. Since I knew she couldn’t just come out here every time there was something interesting, I did the work for her. It was early 2002 and I was shooting video and asking tons of questions. In the end, I came up with three homes for her. She bought the one I thought she would like. Unfortunately, I didn’t take that same tactic with everyone because I didn’t have that constraint and didn’t have it in my mind that maybe that was the best way to work.
Exercise: What questions can you add to your buyer’s consultation to understand your clients better than you do now? Bonus: Imagine what questions you would need to ask so that you could find three homes to show your clients knowing one would be worth buying.
Do the work, get the results.
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