Get inside your clients' heads: 3 psychological lessons for real estate

Understanding likeness, trust and loss aversion as they relate to buyers and sellers

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The practical psychology of real estate has always been to realize that you are selling your client’s dream, not their property. Real estate is not a product like any other, and it is a classic agent mistake to try to turn it into one. Being conscious of how real estate connects people is critical to understanding what would motivate someone to buy or list a house through you.

The way clients search for real estate has gone digital, and more recently, it has gone mobile in a big way. Real estate technology is more prominent than ever before, and companies all across America are trying to “hack” the homebuying process. You can spend hundreds and thousands of dollars attempting to set yourself apart with technology. It’s impossible to deny that investing in technology will grow your real estate business in 2015, but never forget that in the end, real estate is about sales, and sales is about people. Here are a basic few tenants of psychology that you can leverage to set yourself apart as an agent.

1. Likeness. People are motivated by likeness, and no, this does not mean how many “likes” your Facebook page has. Likeness is the idea that in a crowded room, tall people will talk to tall people, and in a crowded real estate market, young tech-savvy buyers will work with young tech-savvy agents. There are many things that you cannot change about yourself and your brand, but making sure that you relate well on the surface to your target audience will get you more leads. One suggestion is making sure you have a branded mobile presence with your clients. Who doesn’t have a smartphone?

2. Trust. One thing motivates people to spend their hard-earned money more than anything, and that is trust. Your clients aren’t asking you to watch their dog for the weekend; they are trusting that you are going to find the home of their dreams. Becoming a Zillow five-star agent, a Trulia Pro, or Yelp all-star will help you gain trust. Asking your past clients for a reference on one of these trusted referral networks will make sure that you are putting your best foot forward in today’s tech-savvy marketplace.

3. Loss aversion. This is one of the most tested and true psychological phenomena that exists. In study after study, people have chosen the confidence of not losing money over the chance to gain money. Loss aversion is a greater motivational tool than anything else in terms of sales. Instead of advertising all day about what you have to offer a client, instead you can be positioning your marketing so clients who don’t contact you feel like they are missing out on something. The most influential part of loss aversion is that it has the power to turn a rational decision into an emotional decision. I’m not saying it’s imperative that you use loss aversion in your marketing — but if you do not, you won’t be setting yourself apart.

Kevin Hopp is the vice president of customer success at Dizzle.