Don’t be a Victim of the Endowment Effect.
The Endowment Effect is the tendency of sellers to over value the things that they own. When combined with loss aversion instincts, the Endowment Effect can cripple the home sale process. An example of its impact was shown by an experiment where half of a group were given mugs. Those with mugs were asked by those without them if they would sell, and what price they would sell them for. Under ordinary principles about half of the mugs should trade hands: those with mugs but who didn’t like them as much as those without would sell, and those that liked the mugs more but didn’t have them, should buy. However, few trades were made because those who had the mugs valued them twice as highly as those who didn’t have them. This same principle can result in sellers demanding a price for their real estate that potential buyers decline to pay. Don’t be blind-sided by the Endowment Effect in your next home sale. Let the professionals at SimplySOLD help you determine an accurate value for your home.