The home buying paradox of choice

By
Real Estate Agent

According to a study conducted by two Social Psychology professors at Columbia University, a jam shopper is ten times as likely to buy a jar of jam when they are presented with six choices of jam flavors instead of twenty four. In other words, the jam shopper is ten times as likely to be successful and satisfied in their mission to secure jam when they are choosing from a selection that is 75% smaller. 

Yet, if you ask that same jam shopper if they would rather choose from six choices or twenty four, they will always indicate a preference towards the greater selection. 

People get overwhelmed when provided too many choices and as a result they are more successful at making a decision when the choices are limited. Yet paradoxically people will always prefer to choose from as many choices as possible.

In the real estate industry this means less choice can yield a greater success rate for your home buying clients, resulting in a happier client and a richer agent. 

Of course the reality is that all consumers have access to essentially all of the home listings. So your job at this point isn't to attempt to restrict access to the online directories, but to curate a list of homes perfectly matched to your clients, similarly to how a Sommelier pairs and suggests the best wine to complement a meal at a fine restaurant.

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Ambassador
416,806
Stacey Smith
Your Orange County Beach Cities Realtor
Harcourt's Prime Properties

Also take in and out burger for example.. They have one of the simplest menus in the world and one of the most popular burger joint on the west coast. This is such a great point because I agree with it, by no means is the like house hunters on HGTV (here's 3 houses now pick one, momma needs a new pair of Jimmy Choo's) but the less quality houses you take your buyers to go see the more content they are going to be with thier selection instead fo bombarding them with house after house that the houses start running together and they can't tell their right from their left.

January 11, 2011 12:10 PM
Rainer
148,540
Virginia Gardner
Realtor, Charlottesville, Serving Central Virginia
Roy Wheeler Realty Co.

Fantastic post, Jonathan.  When people tell me thay want to "see everything!", I shudder.  And then I take a deep breath and begin the counseling. 

January 11, 2011 01:16 PM
Rainmaker
79,918
Craig Zuber
Eagle Idaho Real Estate
Zuber Group Real Estate

This is a great way to look at home buying. Find the real root of what your client wants, then education, education, education.

January 11, 2011 01:18 PM
Rainmaker
172,899
Laura Forman
Your Brevard Premier Property Specialist
National Realty of Brevard www.LauraSellsBrevard.com

I like the analogy.  There is a balance to providing enough choices without overwhelming with too many choices.

January 11, 2011 01:43 PM
Rainer
32,390
Patrick Henry
PMZ
PMZ

This is so true. That is a great explanation using a simple scenario. I am sure that everyone has done this in some way in the past and thus can relate to this type of thing. Great blog post.

January 11, 2011 01:50 PM
Rainmaker
940,485
Georgie Hunter
Maui Real Estate sales and lifestyle info
Hawai'i Life Real Estate Brokers

That's an interesting paradox and I can see how it makes sense.  Too many choices at once can be overwhelming, but over time maybe not so bad.

January 11, 2011 01:55 PM
Rainmaker
182,582
The Brewer Team - Franklin TN Homes
Benchmark Realty

Jonathan - This study put into numbers what a lot of us have alway known. If you want to confuse customers, give them too many options.

January 11, 2011 02:17 PM
Rainmaker
402,996
Paul Walker
Scott AFB IL Area Realtor
Re/Max Preferred - OFallon IL

Too many choices actually can start to get real confusing. If you have found some homes that have met your needs, you have probably seen enough! I like to limit my buyers to seeing no more than 6 homes per day (if possible) because they really start to run together.

I like for my buyers to really try to narrow down their preferences, and price limit that they will NOT look over. I like to see if they would be willing to do a 15 year loan, and look for a cheaper home if it could meet their needs. Not too many buyers want to do that however! But they would be so much better off than a 30 year loan, and a higher priced home means higher taxes!

January 11, 2011 03:18 PM
Rainmaker
1,734,169
William Feela
Realtor, Whispering Pines Realty 651-674-5999 No.
WHISPERING PINES REALTY

I find the less choices at a time is much better for my buying clients.  They don't get so confused!

January 11, 2011 03:49 PM
Rainmaker
224,516
Coldwell Banker Camelot Realty
Homes for Sale Mount Dora Realtor
Coldwell Banker Camelot Realty

Hand-Crafted Home Selection.

Hmmm.

January 11, 2011 04:19 PM
Ambassador
401,458
Virginia Hepp
Mesquite NV Homes and Neighborhoods - Search MLS
ERA - Mesquite NV Homes For Sale

If I were presented with 24 jars of jam to choose from, I would, as Conrad #16 said, be paralyzed.  I would thank the presenter if she had narrowed the selection down and only presented 6 choices.

Before I take buyers out to look at homes, I show them the long list of homes that meet their criteria, explain why I deselected some, and briefly discuss the ones that we are actually going to see.  I ask if they have seen any other properties on the internet that I didn't have on the list, we add them to the appropriate file - round or flat.

They are confident that I/we/they are not missing something, and can then relax and get ready to decide.

January 11, 2011 05:50 PM
Rainmaker
591,254
Valerie Osterhoudt
ABR, Cromwell, CT Real Estate ~ 860.883.8889
Johnson Real Estate, Inc.

Jonathan... Giving people a selection of items, they can choose what they need.  Give them an overwhelming amount... they get totally confused. 

So my question is.... when looking for a home... when do you cut off how many to see?

January 11, 2011 06:13 PM
Rainmaker
398,599
June Tassillo
Let me help you with the next phase of your life!
RE/MAX Elite Realty

Jonathan ~ I agree!  It got me to thinking when I go to a Chinese & Mexican Restaurant  they have so many items and dishes to choose from and I go for the default Number1 please or I start asking everyone, what are you having and go with what that.  If I am doing my job correctly by getting them qualified and getting a amount they feel comfortable with, then what they want and need it cuts out a ton of homes and we are down to a handful.  This makes their selection quicker and easier for them and me.  Nice post, if you had a suggest button I'd use it. ;O)

January 11, 2011 08:34 PM
Rainer
56,085
Tommy Taylor
CNE- Texas Hill Country Realtor
Taylor Properties & TexasForSale.net

I tend to agree. Typically-if i can have a good conversation with a buyer, Ican narrow things down. Too many choices seem to "muddy the waters too much".

January 11, 2011 09:54 PM
Rainer
157,315
Nyssa Smith
REALTOR, State College Area Real Estate
Keller Williams Advantage Realty

Wow Jonathan!  Another GREAT analogy today!  First of all, I love that book!  It's so true, people 'think' having more choices will make them happier, but really, it doesn't in the end.  Less is more.  I love this on TED.  Dan Gilbert talks about Why Are We Happy.  I know you will enjoy it.

January 11, 2011 10:04 PM
Rainmaker
172,030
MaryBeth Mills Muldowney
Massachusetts Broker Owner
TradeWinds Realty Group LLC
Usually our first outing is the Buyer's list of interesting homes, from there I can use their reactions to discern which homes may interest them and explain why we are not seeing some others on their list, yes life is overwhelming!
January 11, 2011 11:40 PM
Rainer
97,662
Lisa S. Mullins

You are so right! If yo know your clients needs  and you explain the process it simplifies the process!   I try to only show my Buyers amybe 2 homes at a time - and wait a week  between.  Everyone is so busy these  days!

January 12, 2011 10:28 AM
Rainmaker
64,491
Crystal Pina
Remax Professional Associates
774.289.5521

I always say, "a confused mind always says No". I don't know where I first heard it, but I always try to remember it.

January 13, 2011 02:56 PM
Rainer
129,745
James Harner
James Harner Group - Philadelphia PA Real Estate
Considering Selling Your Home? Call 610-310-7646 first

this is an absolute truth. we are matchmakers. we must know our client and and inventory in order to create a successful opportunity for matchmaking.

January 15, 2011 02:02 PM
Rainmaker
738,498
Gabrielle Kamahele Rhind
Broker/Owner
KGC Properties LLC, Tucson Property Management & Real Estate

GOOD MORNING JON!  Narrowing down choices ... I practice this daily with my daughter - makes it easy for her and much easier for me!  It's a good practice to apply in the real world especially with buyers and helping others make decisions! -- G

January 20, 2011 06:33 AM
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Ambassador
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Jon Washburn

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