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How to detach in 3 easy steps!

No, this isn’t a post about your personal relationships (there have been too many written already!). What I’m referring to, is your home.

In the world of economics, it is called by several names:

  • The “Endowment Effect”
  • The “Willingness to Pay / Willingness to Accept Gap”
  • The “Attachment Bias”

As William Shakespeare wrote in Romeo and Juliet, ‘…a rose by any other name…,’ what matters is what something is, not what it is called.

So, what is it you ask?

In economic terms, it means that when we own something of financial value (stocks, jewels, or some other asset), we ascribe a greater value to it than if we did not own it. In other words, we let our emotions dictate our actions.

Think of the TV shows Pawn Stars or Antiques Roadshow. Grown men and women getting emotional over some old piece of junk they happened to find in their attic. The owners of these pieces always seem disappointed to discover that other people aren’t willing to pay them what they feel it is worth.

Why You Must Detach If You Want To Sell That Home

Another example is your home.  When potential buyers look at a home, they always believe that it is over-priced.  Sellers on the other hand, always feel their home is worth more than what buyers are willing to pay (e.g. the Willingness to Pay/Willingness to accept gap). The primary reason is that buyers have no emotional attachment to the asset, so it is worth less to them.  How many times have you been inside a home and thought to yourself “I can’t believe they are asking this much”?

Hence the big disconnect and cause of long market times for homes currently for sale.  We are currently in one of the worst market downturns in recent history, yet some sellers hold steadfast to the belief that their home is still worth much more.

So how do we fix this problem? How do we detach?

Step1: Your Woodinville Home Is Just A House

You should no longer refer to it as your home but rather a house in which you reside. Forget about all that money you spent having Tromp L’oeil murals painted in your kids bedroom. Chances are, the next buyer won’t care. In fact, you should paint over it yourself as a form of shock therapy.

Step 2:  Get Rid Of Personals

Pack up your stuff and put them in boxes in the garage. The less personal stuff you have in the home house to look at, the less emotion you’ll feel.  Packing up your stuff will also help the house show better.  Think about how many times as a buyer you’ve been in a house and spent more time looking at the photos on the mantle and wall than at the rooms itself?

Step 3: Focus on the future

This is a sensitive area right now, especially when so many people are losing their houses. If you’re up-sizing, think of the great deal you’re getting. As the saying goes, the best time to buy up is in a down market. If you’re losing your house, it can be especially difficult to think about the future but it can also be a great time to re-prioritize and focus on the things that really matter.

Your House Is An Object…Let It Go

Let’s face it. A house is just an object. A possession. Why become so emotionally attached to it? As a nation, our priorities are all screwed up. We should be focusing on our relationships and our families. The rest of the stuff pales in comparison…

If you have ever struggled with selling a home and letting go, tell us your story below.  Help others that need help themselves.

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