In this industry that loves long listing presentations, feature-packed brochures, and rapid-fire vendor updates, here’s a counterintuitive idea: the more you say, the less persuasive you may become.
Niro Sivanathan is a Professor of Organisational Behaviour at London Business School.
His research draws on social psychological and evolutionary theories to examine how our judgments, decisions, and behaviours are shaped by the psychological experience of status and power within social hierarchies.
In addition, he explores how our motivation to maintain self-integrity influences decision-making.
In his popular TED Talk on the “dilution effect,” Niro explains a cognitive bias showing how adding weak or irrelevant information can actually undermine strong arguments.
For real estate agents, this isn’t just fascinating psychology, it’s a blueprint for sharper appraisals, stronger fee conversations, and more effective negotiations.
The dinner set that lost half its value
Niro opens with a simple experiment conducted by Christopher Hsee at the University of Chicago.
Participants were asked how much they would pay for a 24-piece luxury dinner set: eight dinner plates, eight bowls, eight dessert plates — all in perfect condition. On average, they were willing to pay £390.
Another group evaluated a 40-piece set. It included everything in the 24-piece set — plus extra cups and saucers. The catch? Some of those extras were broken.
Logically, the 40-piece set should be worth more. It contains all the good items from the first set and additional usable pieces. But participants were only willing to pay £192; roughly half the price.
Why? Because the broken pieces diluted the overall perceived value of the set. Our brains don’t add up value; we average it. When weaker elements enter the frame, they drag down the whole.
Why your listing presentation might be hurting you
Now apply that to a listing pitch.
An agent presents:
- 20 years in real estate
- $250 million in career sales
- Top 1% nationally
- Recently sold 12 properties in the area
- Won “Best Office Morning Tea” in 2018
- Sponsors the local under-9s soccer team
- Has 3,000 Instagram followers
Spot the problem.
Your strongest, most diagnostic information – sales volume, local track record, market dominance – is powerful.
But when it’s mixed with weaker, irrelevant, or mildly impressive points, the overall impact drops. Vendors don’t consciously notice the dilution, but cognitively, that’s exactly what happens. Your message averages out.
Diagnostic vs. nondiagnostic: the appraisal test
Niro explains that our minds separate information into two categories:
Diagnostic information: directly relevant to the decision at hand.
Nondiagnostic information: irrelevant or weakly related.
In real estate terms:
Diagnostic:
- Comparable sales in the past 90 days
- Average days on market for your listings
- Clearance rate
- Negotiation track record
- Buyer database size
Nondiagnostic:
- How many awards your franchise has globally
- How many suburbs your network operates in
- Your office renovation
- How many newsletters you send each month
When mixed together, nondiagnostic material doesn’t sit quietly. It dilutes the persuasive weight of the core proof.
The pharmaceutical ad lesson every agent should hear
One of Niro’s most striking examples comes from pharmaceutical advertising.
Because of regulation, drug ads must list side effects. When ads list major side effects (heart attack, stroke) alongside minor ones (itchy feet), people rate the drug as less risky than when only the major side effects are listed. Why? The minor issues dilute the perceived severity of the major ones.
The implication for agents is profound. When justifying your fee, don’t list every standard marketing activity. Instead, anchor on the high-impact differentiators:
- Your average sale price vs suburb median
- Your vendor premium percentage
- A negotiation case study that added $80,000
- Your auction clearance rate in a shifting market
If you mix premium outcomes with routine activities, the premium gets averaged down to ordinary.
In negotiations, less is lethal (in a good way)
Buyers are especially susceptible to dilution.
Imagine saying:
“This property is north-facing, on 620sqm, renovated kitchen, walk to the station, and the neighbour’s dog is usually quiet.”
That last throwaway line weakens the overall strength of your pitch. Strong negotiators isolate their best points and let them breathe.
They don’t overwhelm buyers with 15 features — they highlight the three that drive emotional and financial value.
The courage to cut
There’s a psychological reason agents overload information: insecurity. We think more proof equals more persuasion. But Niro’s research shows the opposite.
Adding weaker arguments doesn’t reinforce your position – it reduces it.
This is particularly relevant in:
- Fee conversations
- Objection handling
- Vendor price conditioning
- Off-market discussions
- Auction day buyer management
When vendors push back on commission, resist the urge to pile on reasons. Select your most powerful justification and deliver it cleanly.
When price guiding, don’t dilute your rationale with minor market commentary.
Stick to the two or three comparables that truly matter.
The real estate takeaway: Quality trumps quantity
In a profession built on communication, the dilution effect is a sharp reminder that influence isn’t about volume, it’s about precision.
Your strongest arguments are powerful enough on their own. The next time you:
- Build a listing presentation
- Draft a vendor email
- Pitch your fee
- Frame a buyer negotiation
- Speak up in a team meeting
Ask yourself: What are my strongest three points? Then cut the rest.
Because in the mind of your audience, your arguments don’t stack – they average. And in real estate, the agent who knows what to leave out is often the one who wins the listing.
