Psychology for Estate Agents: How to Use Established Psychological Theories to Sell More Properties

1. Have glowing reviews from the public

In order to make sure an estate agent is successful, it is essential to have excellent reviews written by the public on sites such as Trustpilot.  Being ranked highly on these websites will show others how popular you are and will encourage others to also rate you highly.   This is due to social proof, the fact that people are hugely influenced by the actions and opinions of others (Cialdini, 2007; Pratkanis, 2007).  Therefore it could be a good idea to introduce incentives to encourage good reviews on these websites so that customers are more likely to spread the word that your firm is competent and to be trusted. 

2.     Make it seem as though your properties are in high demand

Another tactic to encourage people to purchase property is to make sure the customer knows other people are also interested in the product.  The limited-quantity scarcity technique can be used, perhaps by arranging viewings to slightly overlap to make it evident to customers that the property they’re interested in is in high demand.  This will be effective because when an item or object appears to be limited or rare this will increase its value (Pratkanis, 2007; Worchel, Lee & Adewole, 1975).  Another way to encourage this view is to hold open days at properties when they are first released onto the market.  During the open days many potential purchasers will turn up together, creating a sense of rivalry between them.

3.     Show people an unattractive house beforehand

Previous research would suggest that as an estate agent you may be able to increase the attractiveness of a house by simply showing prospective buyers an ugly house beforehand.  A decoy is a poor choice that no one would choose, and is placed in a situation with the sole purpose to make the alternative option seem much more attractive (Huber, Payne & Puto, 1982).  This is further supported by the contrast effect, which states that one item will be perceived as valuable when compared with something that is of lower quality (Sherif, Taub, & Hovland, 1958).  Moreover, Cialdini (2007) states that the price of an item can be manipulated depending on what the customer has previously just seen.  For example, if you show someone a fairly run down house and then show them a fairly average house for the same price that customer is now more likely to value the second house more favourably than they normally would have done. 

4.     Ask for an odd amount of money for a property

The pique technique suggests that people who request an odd amount of money are more likely to be successful than if they just asked for a general amount.  For example, Santos, Leve, and Pratkanis (1994) found that people were more likely to be given change when they asked for a peculiar amount such as 17 cents or 24 cents as opposed to a normal request such as just asking for a quarter.  This plays with the idea that people believe that those who ask for an odd request must have thought about specifically why they need that exact amount and therefore are more likely to be offered the money.  This technique could be applied to house pricing, and therefore it would be best to price houses with an exact, rather odd amount of money rather than a generic amount because it may lead the customer to be convinced that the price does truly reflect the value of the house.  So rather than pricing a flat at £150,000, it might be best to ask for £151,500, for example.

5.     Highlight separately each valuable aspect of the house but state all the weaknesses as one

In order to disaggregate the gains it is important to maximise the worth of each of your properties and show the customer every valuable aspect of the house.  When giving customers a tour of the house one should point out every asset and talk in detail about why each adds to the value of the house.  Furthermore, simply stating all the valuable aspects of the house in the form of a long list will lead to perceived higher quality (Alba and Marmorstein, 1987) and by hearing a long list customers may be more convinced the house is good value for money.  This is due to the peripheral route to persuasion and therefore when viewing the house, the Estate Agent should be sure to list at least 10 reasons in a row why the house is great value for money.  Moreover, if there are any negatives associated with the house it would be recommended to inform the customer of them all at once under one name in order to aggregate the losses. 

6.     Make the customer feel indebted to the firm

Another key aspect which could help a firm to sell properties is if potential buyers feel indebted to the firm and this can be achieved in a number of small gestures.  For example, it is common that many firms offer customers a free drink when they first have an appointment at the estate agents and some firms offer customers to be driven around in the estate agent’s car to view properties.  Furthermore, when negotiating the price of the house firms could lead the customer to believe that they really like them and are willing to make a special deal.  This deal could involve taking off a small sum of money from the overall price because you think they’d be really suited to living at the property.  These three gestures will all introduce the reciprocity effect which states that when someone does something kind for someone else, this creates a sense of indebtedness to the person.  In order to resolve this the person will often feel obliged to match the favour later on or make an even bigger gesture in return the person (Burger, Sanchez, Imberi, & Grande, 2009; Regan, 1971).  Therefore in this case the potential buyer who has been given free drinks, driven around in the estate agent’s car and has been offered a special deal will feel grateful and may then be more likely to accept the offer to purchase the property. 

These tips should increase the number of properties that you sell. Good luck putting them into practice!

References: 

Alba, J. W., & Marmorstein, H. (1987). The effects of frequency knowledge on consumer decision making.  Journal of Consumer Research, 14, 14-25.

Burger, J. M., Sanchez, J., Imberi, J. E., & Grande, L. R. (2009). The norm of reciprocity as an internalized social norm: Returning favors even when no one finds out. Social Influence, 4, 11-17.

Cialdini, R. B. (2007). Influence: The psychology of persuasion. New York: Collins.

Huber, J., Payne, J. W., & Puto, C. (1982). Adding asymmetrically dominated alternatives: Violations of regularity and the similarity hypothesis. Journal of Consumer Research, 9, 90-98.

Pratkanis, A. R. (2007). The science of social influence: Advances and future progress. New York: Psychology Press.

                                              

Regan, D. T. (1971). Effects of a favor and liking on compliance. Journal of Experimental Social Psychology, 7, 627-639.

Santos, M. D., Leve, C., & Pratkanis, A. R. (1994). Hey buddy, can you spare seventeen cents? Mindful persuasion and the pique technique. Journal of Applied Social Psychology, 24, 755-764.

Sherif, M., Taub, D., & Hovland, C. I. (1958). Assimilation and contrast effects of anchoring stimuli on judgments. Journal of Experimental Psychology, 55, 150-155.

  

Worchel, S., Lee, J., & Adewole, A. (1975). Effects of supply and demand on ratings of object value. Journal of Personality and Social Psychology, 32, 906-914.