factors that increase your home’s value and saleability, not merely throw money at items that will provide no measurable advantage. THE 80/20 RULE Imagine a buyer is in the market for a three-bedroom home and his agent found h im fi ve houses to preview. Each meets his general criteria, with similar features, is comparable in price, and is located in his desired area. One would assume the buyer would hav e a diffi cult time deciding between the houses. But no matter how similar they may seem, no two houses are exactly alike. Let’s say that one out of th e fi ve houses has a pool. Th e buyer is unaware of this feature, however, because the agent didn’t mention it . Th e buyer tours the four houses without pools and isn’t particularly interested in any of the m. Th en he sees the fift h house with the pool. Suddenly, he is ready to make an o ff er. He might even pay full asking price, even though this house is more expensive than the others. Here’s where something called the “80/20 rule” comes into play. Th e 80/20 rule, also known as the “Pareto Principle” (suggested by Joseph M. Juran and named a ft er Italian economist Vilfredo Pareto), states that for many situations, approximately 80 percent of results, or e ff ects, will come from roughly 20 percent of e ff orts, or causes. While it does not always come out to be an exact 80/20 ratio, this imbalance is o ft en seen in various business cases: • 20% of sales reps generate 80% of total sales. • 20% of customers account for 80% of total pro fi ts. • 20% of the most reported so ft ware bugs cause 80% of so ft ware crashes. • 20% of patients account for 80% of healthcare spending.
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