Negotiating Techniques

[goldbug9999]

OK having long had an interest in psychology and having read peoples complaints about EA tactics I thought I would give a run down of whats behind them.

"scarcity" - we value something more when it is (apparently) scarce

- EA example: "they dont come up for sale in this area very often"

"relativity" - relative value judgments tend to trump absolute ones

- EA example: "it has 2 more bedrooms than one just down the road and is only 5k more"

"social proof": basically this exploits our herd mentality - that we assume something must be a good idea if other people are doing it.

- EA example: "weve had three couples in a simmilar situation to you recently and they all went ahead ..." / "my daughter only earns xx and she has a mortguage of yy"

"Initial price exposure": the phenomenon that the first price we are exposed to is very "sticky" in our minds and we see any subsequent lower price as a "discount" even if the initial price was obviously very inflated.

- EA example: "originally this was on the market for 15332 million pounds but now they only want 5 pence ..."

"emotional blackmail": obvious and common tactic

EA example: "if they dont sell for at least xxx they cant pay for child life saving operation in america blah blah"

Some examples span multiple techniques. e.g. "I think the other couple that viewed earlier are going to put in an offer" - social proof + scarcity.

Well thats off the top of my head anyway, also of course you can use all of the above against them. When I have time I will post some examples.

Edited September 10, 2010 by goldbug9999

[juvenal]

OK having long had an interest in psychology and having read peoples complaints about EA tactics I thought I would give a run down of whats behind them.

Well thats off the top of my head anyway, also of course you can use all of the above against them. When I have time I will post some examples.

More on this, please.

[goldbug9999]

One more thing to bear in mind is that these principals are very powerful and work at a deep subconscious level so they can still work even when you are aware of them so never make a decision until you have removed yourself from the selling environment and given yourself a cooling off period.

[VeryMeanReversion]

Block viewings are the worst. I went to one, only got 20 minutes too look around. There were no other viewing booked for days so the only reason to do them in a block was to apply pressure.

[cool_hand]

Block viewings are the worst. I went to one, only got 20 minutes too look around. There were no other viewing booked for days so the only reason to do them in a block was to apply pressure.

Yes block is a clever tactic employed EA's, you can see the grin on their faces when they do it. :angry:

[olliegog]

along with 'block viewings' the other tactic is 'open days' when you can see the others traipsing through what you might like to think could be 'your house'.

and even if they operate an appointment system for viewings you can bet that 'potential buyer 2' turns up while you are still viewing - more pressure as they keep the appointments tight together.

worst of all is the - we have had x viewings from cash buyers (you know it is a lie) - viewings do not an offer make and offers do not necessarily a sale make.

[Kilham]

How do you know if an EA is lying?.

Check for a pulse.

[Snow Birds]

OK having long had an interest in psychology and having read peoples complaints about EA tactics I thought I would give a run down of whats behind them.

"scarcity" - we value something more when it is (apparently) scarce

- EA example: "they dont come up for sale in this area very often"

"relativity" - relative value judgments tend to trump absolute ones

- EA example: "it has 2 more bedrooms than one just down the road and is only 5k more"

"social proof": basically this exploits our herd mentality - that we assume something must be a good idea if other people are doing it.

- EA example: "weve had three couples in a simmilar situation to you recently and they all went ahead ..." / "my daughter only earns xx and she has a mortguage of yy"

"Initial price exposure": the phenomenon that the first price we are exposed to is very "sticky" in our minds and we see any subsequent lower price as a "discount" even if the initial price was obviously very inflated.

- EA example: "originally this was on the market for 15332 million pounds but now they only want 5 pence ..."

"emotional blackmail": obvious and common tactic

EA example: "if they dont sell for at least xxx they cant pay for child life saving operation in america blah blah"

Some examples span multiple techniques. e.g. "I think the other couple that viewed earlier are going to put in an offer" - social proof + scarcity.

Well thats off the top of my head anyway, also of course you can use all of the above against them. When I have time I will post some examples.

I find this aspect of the house market fascinating too. I will add that most of the above applies to used cars and fashionable clothes. It is basic salesmanship and is not limited to houses. I will be fascinated by your rebuttal techniques so encourage you to share. We will be in the house market soon and I am looking forward to using some psychology to manipulate the real estate types. I would much prefer to deal directly with the seller because the real estate agent is probably hardened up at least a bit. My general approach would be to make the seller think they are a wonderful person/saving the planet/ helping humanity/highly astute and shrewd, whatever works to bring the seller down in price and still feel good about it. I see the house market as so emotional that it is very susceptible to a non-emotional buyer.

Your thoughts?

[concerned_money]

One more thing to bear in mind is that these principals are very powerful and work at a deep subconscious level so they can still work even when you are aware of them so never make a decision until you have removed yourself from the selling environment and given yourself a cooling off period.

TIME, is the most powerful technique

being left to "stew" weeks at a time - it breaks a persons will to live

it's happening to me right now, you'd almost be happy to pay full asking just to END IT

[JustYield]

OK having long had an interest in psychology and having read peoples complaints about EA tactics I thought I would give a run down of whats behind them.

"scarcity" - we value something more when it is (apparently) scarce

- EA example: "they dont come up for sale in this area very often"

"relativity" - relative value judgments tend to trump absolute ones

- EA example: "it has 2 more bedrooms than one just down the road and is only 5k more"

"social proof": basically this exploits our herd mentality - that we assume something must be a good idea if other people are doing it.

- EA example: "weve had three couples in a simmilar situation to you recently and they all went ahead ..." / "my daughter only earns xx and she has a mortguage of yy"

"Initial price exposure": the phenomenon that the first price we are exposed to is very "sticky" in our minds and we see any subsequent lower price as a "discount" even if the initial price was obviously very inflated.

- EA example: "originally this was on the market for 15332 million pounds but now they only want 5 pence ..."

"emotional blackmail": obvious and common tactic

EA example: "if they dont sell for at least xxx they cant pay for child life saving operation in america blah blah"

Some examples span multiple techniques. e.g. "I think the other couple that viewed earlier are going to put in an offer" - social proof + scarcity.

Well thats off the top of my head anyway, also of course you can use all of the above against them. When I have time I will post some examples.

Good list.

The "initial price exposure" has a name - anchoring. Amazingly effective.

Thinking of my dealings with an agent over the summer, he tried almost every trick you mentioned. I've never seen the emotional blackmail technique used before - probably because they think I'd drive an even harder bargain.

[Redcellar]

OK having long had an interest in psychology and having read peoples complaints about EA tactics I thought I would give a run down of whats behind them.

"scarcity" - we value something more when it is (apparently) scarce

- EA example: "they dont come up for sale in this area very often"

"relativity" - relative value judgments tend to trump absolute ones

- EA example: "it has 2 more bedrooms than one just down the road and is only 5k more"

"social proof": basically this exploits our herd mentality - that we assume something must be a good idea if other people are doing it.

- EA example: "weve had three couples in a simmilar situation to you recently and they all went ahead ..." / "my daughter only earns xx and she has a mortguage of yy"

"Initial price exposure": the phenomenon that the first price we are exposed to is very "sticky" in our minds and we see any subsequent lower price as a "discount" even if the initial price was obviously very inflated.

- EA example: "originally this was on the market for 15332 million pounds but now they only want 5 pence ..."

"emotional blackmail": obvious and common tactic

EA example: "if they dont sell for at least xxx they cant pay for child life saving operation in america blah blah"

Some examples span multiple techniques. e.g. "I think the other couple that viewed earlier are going to put in an offer" - social proof + scarcity.

Well thats off the top of my head anyway, also of course you can use all of the above against them. When I have time I will post some examples.

Very good post. I enjoyed.

What everyone is doing is painting a picture in their heads. The salesman is merely wanting to control that picture to make it irresistable and gloss over any shortcomings. So my picture may start with a 'nice' house about the size and price I am looking for, maybe top end though. He wants to put into my mind bunny rabbits flopping around, green green grass, family BBQ, cats loving dogs etc.

Your points are excellent. If you take control of the picture though you see the shortcomings. Contradictory statements abound.

- EA example: "they dont come up for sale in this area very often" ... much later in the tour ...

- EA example: "weve had three couples in a simmilar situation to you recently and they all went ahead

Straight away you could consider that. "Oh great, theres bound to be others I could consider then"

Then there is

- EA example: "originally this was on the market for 15332 million pounds but now they only want 5 pence ..."

"Excellent they are willing to negotiate on the price, that's great to know, thank you."

- EA example: "it has 2 more bedrooms than one just down the road and is only 5k more"

"Hmmm, actually this place is a little larger than I wanted, it's quite nice though, have to think about the additional cost given its just a little larger than I need, but nice"

EA example: "if they dont sell for at least xxx they cant pay for child life saving operation in america blah blah"

"The NHS in our beautiful country is great isn't it? Or are you saying I should move overseas?" Just being cheeky with that one.

But the point is the same, the person who controls the story and picture that's constantly being told in peoples heads is the one who controls the whole situation. And there's always an infinite number of ways to tell any one story.

[mikthe20]

Excellent post OP, good thread. The most invidious recent tactic EAs use in my opinion is approving "proceedable or qualified buyers" - effectively they tell you that they won't show you houses or pass on offers unless you have spoken to their mortgage adviser and shown him/her exactly how much you have, how much you earn, and then calculate how much they think you can borrow. If they have that, that immediately puts the buyer in a weak position since they can't easily combat the normal "too expensive" argument.

Edited September 10, 2010 by mikthe20

[Snow Birds]

Excellent post OP, good thread. The most invidious recent tactic EAs use in my opinion is approving "proceedable or qualified buyers" - effectively they tell you that they won't show you houses or pass on offers unless you have spoken to their mortgage adviser and shown him/her exactly how much you have, how much you earn, and then calculate how much they think you can borrow. If they have that, that immediately puts the buyer in a weak position since they can't easily combat the normal "too expensive" argument.

I think that as soon as you go along with "what can you afford?" you are essentially playing their game. The inference is that the house is worth more than you can afford and therefore you must come up with more money. I prefer any approach that values the house rather than values your bank account. My approach to this gambit would be that we can afford twice that but are not prepared to pay more etc. It's not perfect but it does move the discussion to the house and away from what you can afford which is really irrelevant though they will try to make it relevant, of course. Trouble is it comes over as a bit too aggressive and I could use a softer approach with the same result. Gotta let 'em think they are in control! Any ideas?

[catmandu]

Great post - I've jotted them all down just in case I decide to become an EA in the future.

[Sonic the Hedge Fund]

Play the buggers at thir own game

Just turn each comment into a negative and they soon STFU

OK having long had an interest in psychology and having read peoples complaints about EA tactics I thought I would give a run down of whats behind them.

"scarcity" - we value something more when it is (apparently) scarce

- EA example: "they dont come up for sale in this area very often"

"We looked at two(three, four) others up the road but we're still not sure it's the right area...."

"relativity" - relative value judgments tend to trump absolute ones

- EA example: "it has 2 more bedrooms than one just down the road and is only 5k more"

"but it's not as nice as the one we looked at down the road, and that's £20k cheaper....."

"social proof": basically this exploits our herd mentality - that we assume something must be a good idea if other people are doing it.

- EA example: "weve had three couples in a simmilar situation to you recently and they all went ahead ..." / "my daughter only earns xx and she has a mortguage of yy"

"Lots of people overstech themselves, we're too experieced to fall into that trap...."

"Initial price exposure": the phenomenon that the first price we are exposed to is very "sticky" in our minds and we see any subsequent lower price as a "discount" even if the initial price was obviously very inflated.

- EA example: "originally this was on the market for 15332 million pounds but now they only want 5 pence ..."

"Are they serious about selling? it's still overpriced...."

"emotional blackmail": obvious and common tactic

EA example: "if they dont sell for at least xxx they cant pay for child life saving operation in america blah blah"

'Oh realy? - I didn't know they had such big problems......I hope they don't have to pull out of the sale before completeion'

EAs are easy prey.....just turn their comment into a negative and they soon STFU.

The trick is to start off realy keen to draw them in, but then slowly loose interest with a string of negative comments. Be very polite, but cold and factual.

[NEO72]

Is it that I've only just noticed or have rightmove started putting stuff like "xxx searches for this area in July 2010" and "xxx buyers are registered in this area" on the bottom of the search screen. I know they're not EAs but a subtle sales technique employed there methinks...

[scottbeard]

Oddly on a site normally lambasting EAs this thread actually shows you how they do have some skills after all - all these tactics do actually work, even if they are underhand!

When I sold my house, I showed a few people round and none made an offer. Then the EA started showing people round; within a week it was sold.

However, the EA kept saying I should accept their first offer whereas I held out for more - and got it.

Don't take an EA at face value, but also don't overlook using them to your advantage.

[Number79]

 Excellent post OP, good thread. The most invidious recent tactic EAs use in my opinion is approving "proceedable  or qualified buyers" - effectively they tell you that they won't show you houses or pass on offers unless you have spoken to their mortgage adviser and shown him/her exactly how much you have, how much you earn, and then calculate how much they think you can borrow. If they have that, that immediately puts the buyer in a weak position since they can't easily combat the normal "too expensive" argument.  

can they even do this?

why the hell would anyone want to lay their cards out in front of someone working for the other side before they even begin?

Ea's work for the vendor, letting them know everything in advance is a disaster. Are there ea's that refuse to deal with people before knowing this info? Is there a way around it?

[i wanna house]

i have only been met by spotty oiks in cheap suits who turn up late..

they couldnt psych me out in a million years.

maybe i need more money in order to meet a better class of salesman ?

Edited September 11, 2010 by i wanna house

[hirop]

Are there ea's that refuse to deal with people before knowing this info? Is there a way around it?

yes, laugh at them and explain you pay a solicitor for stating you are in a position to proceed, so they can go and whistle. It's a bluff from them, they want to sell you a house more than they want to prevent you seeing it. The other rebuttal I heard on here was a classic "Look, you are either selling me a house or selling me a mortagage, not both, you pick...")

[wjk]

Two more:

"urgency" - we're more likely to act if we think we have limited time to make an offer before someone else does

- EA example: "thought you should know another couple is coming to look at the place in about an hour" (amazing how they all say that)

"greed" - we're more likely to act if we have dollar signs in our eyes

- EA example: "over the past x years prices have gone up y% yearly so buying now is a good investment" OR "prices have really dropped since x but over the long run prices always go up so buying now is a good investment (funny how the best time to buy is always right now)

[JustYield]

.

Edited September 11, 2010 by JustYield

[Number79]

I'm seeing the land in person in a few months and can wait til then. If it sells in the meantime - too bad. I suspect it will still be on the market then and if they want to deal with me then I should have the upper hand with 4 months or so more info on the current market.

Thanks for reading, you've been great as always.

why do u want land in japan? I mean is it to hold onto or to develop or live on? At first I assumed that you either lived there or worked there, didnt realise you had not seen the land and were doing it long distance. A spanish villa off plan is one thing but a large chunk of land in a country like japan must take balls.

Edited September 11, 2010 by richyc

[JustYield]

why do u want land in japan? I mean is it to hold onto or to develop or live on? At first I assumed that you either lived there or worked there, didnt realise you had not seen the land and were doing it long distance. A spanish villa off plan is one thing but a large chunk of land in a country like japan must take balls.

To build a rentable 5-star holiday home in a fantastic location as a long term investment and potential rural bolt-hole if TSHTF (not much good if N Korea kicks off, admittedly). My wife is fluent in Japanese and we would consider semi-retiring there (18-20 years away). The local market in this location is already dominated by foreign owners as the Japanese themselves are either wary of real estate, cannot afford it or are sellers.

Initially I thought with sentiment being so negative on Japan we would be able to get a good deal during the summer, but scarcity means it doesn't quite work like that. Any apparent reductions in price are more or less offset by the strength of the JPY from a foreigner's perspective. There should be strong demand for real estate there from HK, China and Tokyo-ites in the coming decades. Japan has good property rights and foreigners can own land.

I don't want to say much more, it's a small world.

[Alfie Moon]

Excellent post OP, good thread. The most invidious recent tactic EAs use in my opinion is approving "proceedable or qualified buyers" - effectively they tell you that they won't show you houses or pass on offers unless you have spoken to their mortgage adviser and shown him/her exactly how much you have, how much you earn, and then calculate how much they think you can borrow. If they have that, that immediately puts the buyer in a weak position since they can't easily combat the normal "too expensive" argument.

If they try to do this you should lodge a complaint and report them to the Property Ombudsman immediately. From the Property Ombudsmans, Estate Agents Code of Practice for Sales:

"Submission of Offers

6a By law, you must tell sellers as soon as is reasonably possible about all offers that you receive at any time until contracts

have been exchanged (in Scotland, missives have been concluded) unless the offer is an amount or type which the seller

buyer who made it, within two working days.

the sellers response. Such records should be made promptly.

Discrimination

6c By law you must not discriminate, or threaten to discriminate, against a prospective buyer of the sellers property because

that person declines to accept that you will (directly or indirectly) provide services to them. Discrimination includes but

is not limited to the following:

them.

anyone else."

Sorry the above is not a complete quote - for some reason I can't copy and paste the complete section of the Code of Practice I wanted to. However, go to the Code of Practice for Sales yourself and look at Section 6:

http://www.tpos.co.uk/downloads/IES02_code%20of%20practice_sales.pdf

Edited September 11, 2010 by Alfie Moon