CHAPTER 2 Why Some FSBOs Sell and Others Don’t
The key to this successful home selling approach is a revolutionary finding discovered by Italian economist Vilfredo Pareto. His greatest contribution, the Pareto Principle, is better known informally as the 80/20 rule. In 1906, Pareto noticed that 20% of the pea pods in his garden held 80% of the seeds. Taking a closer look at this ratio, he found that 80% of land in his area was owned by 20% of the people. After detailed study, he observed this ratio held true in many aspects of life. For example: • 80% of your income is derived from 20% of your work. • 80% of a business’s income is derived from 20% of their customers. • 80% of your value to an employer is derived from 20% of your work. In a nutshell, approximately 20% of what you do matters. The other 80% is insignificant. It is important to understand this is 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. Applying the 80/20 rule can save you time selling your home. Unfortunately, many real estate agents and sellers buy into the false idea that more is more. They completely ignore the Pareto 6
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