We have been building relationships with Estate Agents for 5 years, & 85% of our deals [& most of the best] have come through them
And weve spent a lot of good money on leafleting, newspaper ads and so on, all of which have brought us good Property, but nothing like Agents
The Laws of Influence:
There are 6 Laws of Influence according to Robert Cialdini, author of Influence
- Commitment & Consistency
- Social Proof
These are unwritten Laws that help you get the best out of every situation with every person you meet, and being consciously aware of there is fundamental when dealing with and building rapport with Estate Agents & Vendors.
We can think of 100s of deals where using and being aware of these Laws has saved us or made us £5K – £15K extra per deal!
And be warned:
Even though they will not be consciously aware of it, Estate Agents will use all or many of these on you, and you need to be able to spot it!
Rapport with agents:
Law of Liking [another Law of influence] is really important. Get on with the EA and don’t feel intimidated by them. If you can find a common ground discuss this for instant rapport – then move onto the property. Try not to let them just fire questions at you – be more natural. Spend time building rapport when you are out on viewings with them, away from their managers.
How to introduce yourself:
Before dealing with agent do research on Rightmove and show that you have knowledge [the Law of Authority]. Explain that you are looking to buy more than one property as you will be perceived as a much better buyer
Speak to the agents every few days and visit them once a week. The more mindspace you have the more likely they are to call you when a BMV property comes on the books
The Different Types of Estate Agents & How to Spot them Fast
Nail painters & tea boys:
Generally young. More administrative: will sometime be sent on viewings which can be frustrating for serious investors. Not competitive, and will generally dislike the dealers ego
Normally sits at the back of the office where he can hide. Will play facebook and solitaire. Top drawer always open with a bag of sweets in there. Always look a little messy: ill fitting suit
The mother figure of the office. Experienced [15 years in agency]. Very good at their job, great negotiators. Well respected by all other people in the office. Not competitive, they want everyone to be happy. Get on very well with the vendor. Good to deal with.
Mostly only work weekends. There to do viewings. Like nosing around people’s properties. Can be old or young. Not rapport/contact with vendors. Would never negotiate.
Generally young males 20-25. Spiky hair, ted baker suit and shirt [because they are the cheap designer ones]. Hungry, on it, energetic, ultra competitive, ego driven
Older men who have worked in the business for 15 years plus. Good contacts and they know everyone. They have seen every type of market, tweed suits. Generally managers, very influential. They will take interest in you if you buy multiple properties.
The Long game:
Play the long game with negotiations. Don’t try and do the deal there and then, but let negotiations take place over a longer period. This will allow you to assess whether the seller is really motivated. We often buy properties 6 months after viewing them.
Round no, round no, random no:
Be more tactical when dealing with agents for the first few deals. For you first bid; make it a whole number, second bid; a whole number [increase by c. £5k] final bid make a very random figure – tell the agent that it is the absolute maximum you can pay. Don’t bid more than this [remember the long game]. A random number is more believable, and it looks like this is all the money you can get your hands on.
Cut the agent out?
Never EVER cut the agent out of the deal…it WILL be the last you ever hear from them! Your goal is to have them getting you the deals, not you trawling the streets. If you want to get to the vendor, do so [pop back and ask to see the bathroom again] but let the agent know you
Estate Agents Hierarchy [No one will Ever Admit this...]:
Youve just watched Property Ladder, gone in too heavy; the Agents will see right through you [Most investors who walk into an Agency first time are binners]
[you will know because you will never hear from them! Sometimes if they think you are a binner, they won’t even write your details down – you need Law of Influence no.4: Authority]
Probably not that good, but something about you made the Agent want to give you a go – they liked you [Law of Influence no.1 - Liking]. Could become a sub [see below]
Be careful here as you may get played. If some exploitive Agents [not all of them] sense that you are a newbie but have money they may sell you a kipper [sell you a market value Property making you believe it is BMV - you need to do your diligence up front]
An out of town investor with a reputation but no social proof [Law of Authority no.3]. Can create some negative energy and defensiveness from Agents. Doesn’t always know how to deal with people well as they can be ego drive and heavy handed. These people think they should be automatic bankers [see below], but rarely are
Seems good at first, perhaps a chancer, but spends too much time looking and turning deals down and will eventually become a binner
They like you, you have genuine authority and credibility [Law of Influence no.4] They see commitment and feel some initial trust. They will work with you to get you a deal, perhaps you have done a deal or 2 already, but you wont be the first person they call! You must be quick to answer your agent here, as one day you will get your chance to move up to Banker status…
These are the investors who get the cherry pickings of the deals every time. They are first on the Agents lists because they have proved themselves time & time again. It is very rare for you to be an immediate banker [unless you have a reputation and have been a banker or sub in another Agency]
this is the unwritten hierarchy of the Estate Agency business, but one you must fully understand if you ever want to get 25-39.5% Free BMV deals through Agents.