Nudge: the planner and the doer
Every once in a while, I discuss something that strikes me from my current reading. Sometime this summer, I read Nudge by Richard H. Thaler and Cass R. Sunstein. This book discusses how to improve decision making. I liked Stumbling on Happiness better, because it explains why we get in our own way rather than how to create structures that get people to decide in a specific way.
But today, I am writing about Nudge. This is not part of the ongoing trope of the book, but I find it useful for buyers and sellers of real estate:
Here’s the concept: The planner is the part of everyone’s psychological make-up that puts off gratification and does the necessary things. The doer just does what comes to mind. Going to work every day is an act of a planner. We work to get paid; we get paid to enable our future self to have food, shelter, and spending money next week.
Nudge says the planner gets up in the morning to get to work. The doer hits the snooze button, starts work later. (The author suggests a clocky for the doer.) As someone who doesn’t start work early, I have to pay attention to honoring the planner within. I encourage you to do the same, especially in buying and selling house.
Here are the things to do to honor the planner within to please your future self:
Buyers:
1. Get pre-approved for a loan.
2. Calculate monthly payment before making offers. (Use highest interest rate quoted that week.)
3. Pre-decide on towns and neighborhoods before you shop for houses.
All these things keep you from spinning your wheels and wasting your time. More importantly, it keeps you from falling in love with a place you can’t afford or is in the wrong location.
Sellers:
1. Look at the cost of moving. All your repairs to sell, the cost of getting your next mortgage, and legal, recording and broker’s fees all come off your profit. Estimate the assets you’ve liquidated, less those costs. Is there enough money there, from your profits and savings, to facilitate your next move?
2. De-clutter your house ahead of time. Clean and de-cluttered houses sell better. You may sell faster, for more money, or both.
3. Fix small visible problems. Houses sell better if there are not niggling little repairs in sight. Things like finishing a little area of trim, or painting the scratched-up hallway will encourage buyers.
When you completed the work on your home for sale, you will enjoy living there more. Maybe you’ll even stay and save yourselves money and a lot of fuss and bother.
If having a clean, uncluttered house with no niggling repairs hasn’t convinced you to stay, you will be happier while you are selling. Having the house really ready for sale will help you avoid selling the house for less than you want, just because you are sick of it.
4. After you have done 1- 3 above and you still want to move, prepare for your next move ahead of time, as I advise all buyers.
Planning has its rewards.
