On estate agents (and cab drivers)
So I’ve been looking at flats. This was a recent conversation that took place in a flat with an estate agent.
Me: “Yeah, I quite like it – it’s not bad. Bit overpriced?”
Them: “It’s an exceptional flat. There’s already an offer in on it.”
Me: “Oh. So it’s not available then?”
Them: “Well, a guy has put an offer in. A banker, lots of cash. Wants to move really fast. Moment he saw it he wanted it. ”
Me: “Oh right, a banker with lots of cash? Nice to know they are still around! So you know him? He’s your client? He’s not with another agent?”
Them: “Yeah he keeps calling me. Really wants to move fast”
Me: “Right. So would you do this to me as well? If I was to put an offer in? Show other people a flat an offers already in on? Aren’t you supposed to take it off the market? Isn’t that what it says you do on your website?”
Them: “Well, yeah, technically, but with these flats you can’t hang around, they will just go, everyone wants them. I’d put in asking price and no break clause if you want it mate”
Me: “Right.”
Them: “So yeah do you want to put an offer in?”
Me: “Sorry, but it’s empty, no? Have I missed something? We are standing in an empty flat? And it’s on your website? And has been for a while? And I think there is one two floors up on with your competitor? Would suggest it’s not being snapped up in minutes?”
Them: “It will go mate. These don’t come up very often”
What is it with Estate Agents? Are they thick? Bad salesmen? Or just wankers?
I read a great article the other day about how the physcology of estate agents is totally fucked.
Of course, I forgot to bookmark it, but the jist of it was that they spend too long trying to turn a “in the right ballpark” offer into a high offer.
Because Estate Agents only get a small percentage of the asking price the actual difference into their pocket from a mid to high offer is very small.
3 “in the right ballpark” deals in quick succession are worth more to an Estate Agent than 1 big one. So they should be spending their time convincing landlords or sellers to stop losing money on an empty property and accept these lower offers rather than chasing a high value deal off a punter and wasting hours wearily showing multiple people the same flat time and time again.
More on the psychology of estate agents here:
http://www.channel4.com/4homes/buying-selling/estate-agents/the-psychology-of-estate-agents-08-05-28_p_1.html
A cab driver was telling me a similar flawed logic exists in his profession. Lots of drivers will come out until they make a set amount and go home.
Say that amount is £200 a day. Some days it might take them 8 hours, some days it might take them 16 hours.
If they make £200 in 7 hours, they race home amazed they have done so well and put their feet up. Bad move! If you’ve made it in 7 hours on one day, that is the day to stay out – by 16 hours chances are you’ve made £400.
i was intrigued by this and did some digging around online and it turns out this theory was first put forward by Cornell Professor Robert Frank in his book The Economic Naturalist: In Search of Explanations for Everyday Enigmas.
You can read an article based on it here too:
http://www.stockcentral.com/learn/blog/tabid/159/EntryID/40/language/en-US/Default.aspx
Lots of food for thought!
Whilst we’re on the subject of taxis though, I do love my conversations with cab drivers: of course some are full of shit, but amongst my many journeys I’ve spoken to cab drivers who built up multi-million pound businesses and lost it all, others who used to work for the Royal Family and even one who claimed to be the fifth Beatle. To be fair, that last one was a bit odd but he did have a Liverpudlian accent.
In my whimsical way though I do often think it must be interesting to be in a profession where you so often see little intimate snatches of other people’s lives without them really realising they are being observed.
The phone calls overheard by cab drivers, the insecurities and ramblings of couples en route to an event one of them is dreading, the last tense conversations between former cabinet ministers (or even faded 80s pop stars!) and their legal counsel as they head to court to be sentenced: I’m sure there is a book or even a film that could be made about this sort of thing one day. If I was an under cover author I think I’d spend 6 months driving a cab in a kind of George Orwell inspired mission to learn about what really goes on in London.
One for the ideas box, that.