Why it’s Easy to Be Overly Optimistic
In his book Stumbling on Happiness, Harvard psychologist Daniel Gilbert explains the many ways in which irrational optimism affects our predictions. The mind seems immune to realities that are deemed too harsh or undesirable.
To achieve a happy expectation, people select information or interpret information that will produce positive feelings. Gilbert’s research shows that most people possess a relatively low tolerance for uncertainty, but will accept ambiguity when it serves to create a wanted rosy scenario. Most sellers want to think about the future in somewhat glowing terms.
That’s why they tend to overestimate the best-case scenario of what their property will fetch.
Now you know. Stop being irrational. Price your house right!