The other day I was talking to my father about something, and he said something that really made me angry.  On the same day, my youngest daughter did something and I got really angry again.  Because I like to figure out what exactly it is that causes a reaction, I thought about it last night for a while and came up with this.  I was angry at both for doing or saying something that they “should have known” was inappropriate. 

The “should of known” line of thinking is a little different than the hindsight bias.  In this case, you aren’t proving something from the basis of hindsight; rather, you are attempting to read the mind of someone else.  This has serious implications for those of us in real estate.  Here are four scenarios where the mind reader bias can come into play both on the agent side and on the client side.

 

  • When you work with a seller who has never sold a house before, and the inspection notice comes back with requested repairs. As an agent who has seen thousands of inspections, you make a judgement about the quality of the inspection that your seller can’t possibly know.  You proceed to tell your client your opinion on repairs, but the seller has no idea and they get angry about making any repairs at all.

 

In this example, we are assuming that the seller should have known about the need for repairs.  Why do we assume this?  I’m not certain that any of us know how to react to something we’ve never seen before.

 

  • When you work with a buyer and they want to buy a fix and flip house.  You notice that the improvements aren’t well done but at the same time you question why in the world your buyer would want this fix and flip home over something someone has cared for over years.

By your experience in the industry, you know what the objective of a fix and flip home is for the seller:  Maximum Profit.  The way to achieve this is to outfit the home with all of the amenities and design the buyers of today want.  In the vast majority of cases, buyers could care less about a new HVAC system, but absolutely love granite countertops.  You are making the mistake of thinking that the buyer should have known something that they honestly might not know. 

 

  • When you negotiate a sale price with a seller’s agent.  You are annoyed that they should have known that your buyer was the strongest buyer versus the 10 other offers they received.

How is another agent going to know that your buyer is the strongest?  Did you submit a large earnest money deposit with your offer?  Did you make an offer in all cash?  Did you write odd contingencies into the contract?  If you were the agent for the seller, you would have chosen the best offer for your client based on the information that was presented in the offer.  As the buyer’s agent, you must show the seller how strong your offer was.

 

  • When you call a new client and they ask you how long you’ve been in the business, how many transactions you’ve completed in the past 12 months, what qualifications you have to bring to the table and you get flustered and upset.  You think to yourself, “Who does this person think they are, questioning my obvious qualifications as an agent?” 

Why are you getting upset about someone asking you valid questions about your profession?  Should they have known that you are the best agent in your market?  They’ve just met you, they can hardly remember your name and you are bent out of shape over something that is definitely not obvious.

I hope that this can help other buyers, sellers, and real estate agents as they work in the field.  We can’t assume someone knows anything related to the purchase or sale of their house.  We can however, work with our clients to educate them on things that they should know before making these important decisions. 

 

John Schink is a real estate broker in the St. Louis metropolitan area who specializes in full service listings and buyer agency.  He is a member of both the Saint Louis and Jefferson County Boards of Real Estate.  If you are looking to buy a home for sale in Saint Louis, Missouri or the surrounding metropolitan area or considering selling your home, or for general real estate related inquiries, he can be reached at 314-707-4821 or john@deerwoodrealtystl.com