You can apply this rule to everything in your life.
You might wonder, am I going to talk existential philosophy or show you how to sell homes?! In a
nutshell, it means that some things are substantially more important than other
things. In other words, things are not equal. Approximately 20% of what you do
matters. The other 80% is insignificant. Now it's not
always split at 80/20. It can be 70/30 or another percentage. The key is that
the two numbers are not equal and they are usually close to 80/20. You have to understand this concept before you
can save time when selling your home.
How can you apply the 80/20 Principle to selling your home?
Because so many Realtors and sellers buy into
the false idea that more is more, they completely ignore the Pareto Principle. The 20% is vital and the 80% is
trivial. Now that you know what the 80/20 rule is, you
probably want to know how to use it when you are selling your home.
When you use the 80/20 principle to sell your home,
you aren't trying to sell people on the entire home. You know that 80% of your
home's features are trivial. That is because they are the same features that
all of the homes in your neighborhood have. Instead of focusing on those
trivial features, you need to focus on the vital features. These features make your home unique. These
features will make it easier to sell your home for the full asking price. Let's look at some
The 80/20 Rule and
picking from similar houses
Here's an example where someone
was looking for a 3 bed/2 bath house for about $200,000. Let's expand that
example and assume that there are five houses that meet that description in a
The Realtor and the buyer go to the area to look
at the five houses. They are all close to being the same house and they are
close in price. On paper, you might think that the buyer will have a hard time
deciding between those five houses. That is not the case, all because of the 80/20
rule. In this case, let's say that four of the houses don’t have a pool, but
one of the houses does. The buyer sees the first four houses that don't have
the pool and he is not interested. He turns his nose up and either doesn’t put in
an offer at all or makes a lowball offer.
Then, he sees the final house and it
has a pool. Suddenly, he is ready to pay the full asking
price, even if the house is more expensive than the other four he saw. He
doesn’t put his bid in based on the 80% of the features the five homes shared. Instead, he put the bid in based on the 20% that
was unique about the final home. The 80/20 rule sold this home.
The 80/20 rule
doesn’t just help people sell houses. It
causes homes to sell for more money
Here's a real life example. A Realtor acquaintance of mine was
taking a potential buyer around to view houses. They went from house to house, and in each case,
the buyer put in offers that were 10-20% below the asking price. He would not
budge. My friend wasn't sure if he was ever going to make a sale. Finally, they went to the house that didn't have a lot of curb
appeal. It was not a good looking home. Even though the house didn't look
great, it was the one that finally broke the tough negotiator down.
Suddenly he was willing to offer the full asking price. You might
wonder why this house broke him. It wasn't because he had a thing for ugly
houses. Instead, it was because of the 80/20 rule.
My Realtor friend took him to houses that shared 80% of the same
features, and the buyer did not care about any of those features. He was not
interested in bedrooms and bathrooms. Instead, he was interested in that extra
feature that this one home had. In this case, the house was on a hill and had a gorgeous view. All
of the other houses were on flat land. That view sold the buyer. He didn't buy
the house because it had hardwood floors. He didn't buy the house because he liked the
floor plan or the manicured lawn. It was completely based on that hill and
view. That view caused him to stop negotiating and offer full price on the
spot. That is the power of the 80/20 rule.
If you learn how to tap into this rule, you
won't have to settle for less than your asking price. It can even help
sell homes without the buyer even physically seeing them
In some cases, the 80/20 rule even helps people
make sales without conducting a showing
This is a huge time saver. I have
another real life example of this. In this case, this house languished on the
market for months. Unlike the house in the previous example, it was
not ugly. In fact, it was a very nice custom home. As nice as it was, it sat on
the market for seven months without any offers. The seller could not
figure out why the house wouldn’t sell. He ended up firing his agent and hiring
a new one. This new agent knew the importance of finding that one special
feature. He went out and examined the house and lot.
That is when he made the big discovery. The house sat on a
gorgeous 5-acre lot. All of the other houses that were being sold in the area
sat on lots that were 1-2 acres. Not only was the lot bigger, but it was also more private than the
other lots that were up for sale. The new Realtor marketed the 5-acre lot. He
mentioned that the house was nice, but he spent most of his time focused on the
He knew that the house was not the selling point, so he shifted
people's attention to the unique feature. It ended up being snatched up by
someone who was relocating to the area. The person had noticed the house for
sale in the past, but it hadn't caught his eye. That changed when he found out it was on a
5-acre lot. He was suddenly very interested. He was so interested in the home
that he made an offer from 1,000 miles away, before he even saw it in person. He was afraid that someone else would buy it
before he did and he would lose out on his dream house.
That sale happened in
45 days. The house had sat on the market for eight months
without so much as a nibble, and then it was purchased in 45 days, sight
unseen, all because of the 80/20 rule. By changing the focus, the Realtor was able to
generate lots of interest quickly. The house was no longer unsellable. Instead,
it was one of the hottest homes on the market.
Selling to Interested Buyers
When you stop creating advertisements that sound
like the other houses in your area, you can attract interested people. This is
a very simple concept. When you find something that is unique about
your house and you base your advertisement around that one item, it will catch
people's eyes. Those who want that one item will come out to see it in person. Then, you will stop wasting your time showing
your house to people who are not interested. Instead, you will show it to
people who are motivated to make a purchase. That means you won't have to show it as much and
you won't have to sift through lowball offers.
With that in mind, it is essential that you take
the time to find your home's most attractive and unique features. Compare your
home to others that are up for sale in the neighbored and see what makes it
I have years of successful ad copy experience (I will won't say exactly how many years and make those less experienced agents feel disadvantaged...).
Call me an let's talk about some smart ways to get the top dollar for your home when you decide to sell.