I always dread having to look for a new place to live. For those in the renting game, like myself, this tends to be every couple of years. This year my search started a few weeks ago, and already I’ve found many estate agents to be pushy, untrustworthy and generally stressful to deal with.
But when I started to analyse their tactics and techniques, I realised some of them were pretty sophisticated. There are a variety of cognitive biases estate agents are putting in place to persuade you to make that offer. Ones that other marketers could be learning from.
Here are five I’ve seen multiple times over the past few weeks…
Estate agent tactic 1: ‘We’ve had lots of interest in this property already’
Bias at play: Herd Behaviour
This is a classic estate agent technique, acting on our desire to fit in and be a part of the crowd. Naturally we want to do what others are doing, and we believe that if lots of other people do or like something, so should we. Herd behaviour plays on this need to act collectively; hearing others are interested in a property makes us think we will be too.
Estate agent tactic 2: ‘I’ve got three viewings booked in for tomorrow, so I’d sign now if you want it’
Bias at play: Scarcity effect
This is probably the most common bias estate agents use. They are at pains to tell you how few properties are available, and that the one you like will only be around for another few hours before it’s snapped up (sadly in London this is often true!). Naturally, we panic, and act fast to avoid disappointment. The Scarcity Effect means we also place higher value on things that are scarce than those that are in abundance, seeing them as more desirable and exclusive.
Estate agent tactic 3: ‘So we have three properties at 2000, and another at 1600’
Bias at play: Framing
Despite stressing my max budget around 100 times, estate agents would continue to show me properties of a higher value. This is framing at its finest; affecting how you view something depending on the context. By displaying a range of properties of high value, it makes the one you can actually afford seem like much better value, as it’s the cheapest of the lot. Sneaky.
Estate agent tactic 4: ‘I know it seems a lot, but when you think about it, it’s only 25 quid a day’
Bias at play: Denomination effect
Psychologists have found that the more a currency is broken down, the less value we assign to it. Our mental accounting tends to see large amounts paid in one go as much more precious than the same amount paid in instalments. By breaking down the price of rent per week, or even per day, estate agents make it seem like a much more manageable chunk of money to spend.
Estate agent tactic 5: ‘The price per month may be above your price range, but remember we don’t have any agency fees and a deposit is only 50 pounds up front’
Bias at play: Hyperbolic discounting
Hyperbolic discounting is the tendency to choose a smaller, sooner reward over a larger, later pay off. In other words, we’re all about the instant gratification. In this example, we place too much value on upfront discounts (such as a small deposit), which can distract us from the long term benefits of other factors (cheaper monthly rent). Beware the low deposit!
Maybe I’m overanalysing things, and Estate Agents are just being honest and upfront, rather than manipulative masterminds. But whatever they’re doing, it works, and there’s lots to be learned from their persuasive techniques.
For anyone looking for a property, I’d be applying a certain level of scrutiny to everything they say. But if you’re in the sales business, you may just learn a thing or two from them!