One of my landlords in West Drayton is marketing a property and she showed me a marketing letter from a High Street Uxbridge estate agent, as she knows I am interested in this sort of thing. Never bad to see what the competition is up to market...
One of my landlords in West Drayton is selling a property and she showed me a marketing letter from a High Street Uxbridge estate agent as she knows I am interested in this sort of thing. Never bad to see what the competition is up to marketing wise. The letter was directed at people selling and it mentioned a psychological effect called ‘Social Proof’.
What is Social Proof?
As the letter neatly puts it – “If no-one else is interested in this property why should I be?” And of course the letter goes on to then argue it’s worth marketing your property with their company and keep the marketing fresh. All fair enough, I don’t have any complaints but it did make me think about ‘Social Proof’.
Social Proof for Tenants
This effect works in lettings as well. People will ask whether we have had many other viewings and whether there is interest in the property. They are looking for group reassurance that other people also think that the property is desirable. And to gauge level of interest, if you say that there is little or no interest you can expect a lower offer. This is one of the reasons why agents block viewings up together to 'generate excitement' and interest in the property. But as an agent you have to be careful here as you can put someone off if they don’t think that they have a realistic chance of getting the property in a stampede from an imaginary crowd the potential tenant has dreamt up.
Have I had fantastic property on my books as a letting agent which aren’t getting the interest they deserve? Absolutely! There are good properties out that that don't go in the first few days of viewings. We are agents sometimes over exaggerate the need to move fast and get in there fast and then offer if someone is not interested in a property that has been letting for a well.
What Stops People Acting with the Herd?
Social Proof is at it’s most effective when people have little or no knowledge of a field, so when operating in a vacuum of knowledge in an area that they are unfamiliar with. A good agent can empower their tenants or buyers with good knowledge and good knowledge is out there. Zoopla and Rightmove for example have a lot of data about local prices that can be useful and of value to buyers. Information is power!
How to Use Social Proof to your Advantage when Buying a Property
As a buyer or renter would I prefer other people to be not interested or not in what I am after? The answer is I want to be the only one bidding, the only one bidding!
We don’t operate with perfect knowledge and it is possible to find good bargains as a tenant or a property investor looking for a buy to let deal. So the lesson for me is to ignore what is popular and recent on listings and have a good look at what has not let or sold for a little while.
So keep on looking as there is gold in them there property listings be it for lettings or sales. Judge each and every property when buying on it’s own merits, not on what the herd think of it.
Written by Jeremy Wasden 24.09.2015