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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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Lenn Harley 01/11/2011 08:17 AM
  2. San Antonio Texas New Homes for Sale 01/11/2011 09:02 AM
  3. Susan Haughton 01/11/2011 05:37 PM

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Ambassador
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Stacey Smith
Michael Plummer Group - Aliso Viejo, CA
Your Orange County Beach Cities Realtor

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.

Jan 11, 2011 12:10 PM #46
Rainer
148,940
Virginia Gardner
Roy Wheeler Realty Co. - Charlottesville, VA
Realtor, Charlottesville, Serving Central Virginia

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. 

Jan 11, 2011 01:16 PM #47
Rainmaker
79,918
Craig Zuber
Zuber Group Real Estate - Eagle, ID
Eagle Idaho 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.

Jan 11, 2011 01:18 PM #48
Rainmaker
174,982
Laura Forman
National Realty of Brevard www.LauraSellsBrevard.com - Melbourne, FL
Your Brevard Premier Property Specialist

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

Jan 11, 2011 01:43 PM #49
Rainer
32,390
Patrick Henry
PMZ - Stockton, CA
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.

Jan 11, 2011 01:50 PM #50
Rainmaker
988,160
Georgie Hunter
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

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.

Jan 11, 2011 01:55 PM #51
Rainmaker
186,836
The Brewer Team - Franklin TN Homes
Benchmark Realty - Franklin, TN

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.

Jan 11, 2011 02:17 PM #52
Rainmaker
420,269
Paul Walker
Equity Fifty Five Realty, LLC - Scott AFB, IL
Scott AFB IL Area Realtor

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!

Jan 11, 2011 03:18 PM #53
Rainmaker
1,820,375
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

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

Jan 11, 2011 03:49 PM #54
Rainmaker
225,367
Coldwell Banker Camelot Realty
Coldwell Banker Camelot Realty - Mount Dora, FL
Homes for Sale Mount Dora Realtor

Hand-Crafted Home Selection.

Hmmm.

Jan 11, 2011 04:19 PM #55
Ambassador
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Virginia Hepp
ERA - Mesquite NV Homes For Sale - Mesquite, NV
Mesquite NV Homes and Neighborhoods - Search MLS

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.

Jan 11, 2011 05:50 PM #56
Rainmaker
591,387
Valerie Osterhoudt
Johnson Real Estate, Inc. - Cromwell, CT
ABR, Cromwell, CT Real Estate ~ 860.883.8889

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?

Jan 11, 2011 06:13 PM #57
Rainmaker
403,222
June Tassillo
Owner/Broker RE/MAX Elite Realty - Franklin, NC
Let me help you with the next phase of your life!

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)

Jan 11, 2011 08:34 PM #58
Rainer
56,085
Tommy Taylor
Taylor Properties & TexasForSale.net - Kerrville, TX
CNE- Texas Hill Country Realtor

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".

Jan 11, 2011 09:54 PM #59
Rainer
158,800
Nyssa Smith
Keller Williams Advantage Realty - State College, PA
REALTOR, State College Area Real Estate

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.

Jan 11, 2011 10:04 PM #60
Rainmaker
181,120
MaryBeth Mills Muldowney
TradeWinds Realty Group LLC - Norwell, MA
Massachusetts Broker Owner
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!
Jan 11, 2011 11:40 PM #61
Rainer
97,662
Lisa S. Mullins
Glen Allen, VA

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!

Jan 12, 2011 10:28 AM #62
Rainmaker
64,561
Crystal Pina
774.289.5521 - Worcester, MA
Remax Professional Associates

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.

Jan 13, 2011 02:56 PM #63
Rainer
129,796
James Harner
Considering Selling Your Home? Call 610-310-7646 first - Royersford, PA
James Harner Group - Philadelphia PA Real Estate

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.

Jan 15, 2011 02:02 PM #64
Rainmaker
765,227
Gabrielle Kamahele Rhind
KGC Properties LLC, Tucson Property Management & Real Estate - Tucson, AZ
Broker/Owner

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

Jan 20, 2011 06:33 AM #65
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