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Decode Your Client’s Thoughts! The Psychology of Real Estate Transactions · The Real Estate Agent Playbook

• 0:00
  What's up guys?
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  I'm super excited for this one today because there's so much psychology
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  that goes on especially right now with our changing market and all
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  the things that are going on and our clients and oftentimes we get
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  caught up in the hustle and bustle.
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  At the end of the day relationships will always beat algorithms as my
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  good friend George Bryant says and psychology is absolutely something
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  you need to understand whether you have a psychology degree like myself.
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  It's huge for your real estate business.
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  Stay tuned.
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  We're going to dive in.
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  What's up guys.
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  Jeremy Cain, the real estate agent playbook.
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  Thank you so much for joining me.
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  Podcast, YouTube, do all the things, share it.
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  If you like it, share it with your favorite real estate agent.
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  I do this to help agents become successful.
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  And I also partner with agents, over, you know, 60 agents currently in my
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  downline to help you understand and dive in to what this means to your business.
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  But we start here on the YouTube and the podcast as a general, you know, place to
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  come and get a ton of value and knowledge.
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  So let's get right into this as a psychology major graduated
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  from Colorado State University.
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  People are always like, Oh, psychology works really well in real estate.
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  I've never really thought about.
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  Exactly why but we're going to talk about it.
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  So buying and selling a home is extremely emotional different, you know chemicals
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  triggered in your brain whether it's dopamine or norepinephrine or all the
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  things that That happen in your brain and we won't get into the crazy science
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  But it's very important to understand what our clients are going through and
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  it's a little bit different, right?
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  There's so much stuff the emotional triggers that a buyer and a seller
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  and all of the things along the process Play into and the truth about
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  all of this is as an agent You don't have to be an expert in psychology.
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  You just have to be one step ahead of where Your client who is typically
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  novice in, you know, the real estate transaction or the real estate process is.
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  And so you just have to be one step ahead of where your client is feeling.
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  If you could get two and three steps ahead, you're absolutely changing
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  the game, but you can't get too far ahead or, you know, you'll get stuck.
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  So what we need to focus on is first identifying what our
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  clients are going through.
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  If you have not purchased a home recently, or, you know, maybe not even at all,
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  and you're an agent, a newer agent, or.
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  Even an experienced agent and you have not gone through the process
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  as a client you should challenge yourself to put yourself in their
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  shoes as much as humanly possible.
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  The truth is you probably can't do that if you haven't done it yourself, but I
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  even look at myself and although I've I've bought and sold many, many homes.
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  A personal residence is only something I've bought and sold twice, and a lot's
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  changed since the time I had done that.
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  So staying consistent and understanding any changes, any changes to the lending
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  process, any changing to the title process, any changes that have occurred,
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  since you experienced that yourself will make a difference on your reaction.
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  And so it's really about identifying where your client is,
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  buyer, seller, what's going on.
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  And, and, you know, really relating because the cool part about this industry
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  is every transaction is different.
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  And a lot of that is due to the emotional and psychological state of our clients
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  when they're going through the process.
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  So let's talk about buyers, the psychology behind buying.
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  It starts early, right?
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  And I noticed this kind of pretty recently when.
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  I had, you know, some clients that were a little bit hesitant
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  to reach out to the lender.
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  If you've had a client that's hesitant to reach out to a lender when you're
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  like, okay, you want to buy a house, call this stranger and tell them
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  everything about your financial life, please comment below and tell me
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  about that or throw me a thumbs up.
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  And we'll, we'll talk about that and have some engagement.
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  But absolutely, this is something that's first and foremost out of the gate.
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  Hi, you know, I'm so and so with so and so lending team, tell
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  me everything about yourself.
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  Tell me about your credit card debt.
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  Tell me about your back child support.
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  Tell me about your child support.
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  All of these things and they bring up negative emotions.
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  So we have to understand that our clients by talking to a lender are going to go
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  through that negative emotional phase.
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  This is why I have my scouting trip to get people excited to appeal to the
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  positive emotions because I know that If they have anything negative on their
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  credit, they're going to have to, you know, be called to task by the lender
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  to talk about that work through it.
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  Letter of explanation, you know, get a, a verification of something from a creditor
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  or an employer, whatever that looks like.
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  And that's definitely something that could be uncomfortable at times.
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  So I want to appeal to their emotions first by doing the scouting trip,
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  getting them in the homes, getting them excited about the thing before I just
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  dump them into this lending partner who may or may not have, have some,
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  tough questions for them to answer.
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  So as the buyer, that's kind of the first hurdle.
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  Once we get past that hurdle, then we have the buyer's remorse, right?
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  We're under contract.
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  We're excited, you know, kind of got over the lending conversation or
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  that one negative thing that came up.
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  Now we're here, you know, under contract to purchase our home.
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  Now comes, Oh my goodness, I'm purchasing a home for half a million dollars or
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  quarter million dollars, whatever that is.
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  Most of them, usually all of them, have never purchased something of that value.
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  Now, we are using leverage and we talk about the power of leverage and why,
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  you know, real estate is a completely different ballgame as far as leverage
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  because we're not leveraging our cash investment, we're leveraging the entire,
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  you know, amount of the property, and gaining at, You know, pretty, pretty
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  amazing rates typically, on average, especially here in the Denver market.
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  So we have to kind of bring it full circle and say, okay, this is what you're doing.
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  Yes, you're buying a half million dollar property, but you're only bringing
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  50, 000 to the table and you know, 50, 000 not to say that's a lot of money.
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  However, 500, 000 growing at 5 percent on average or 6 percent on
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  average here in our market, you know, is X amount of, of gain over a two
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  or five or whatever your period.
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  Not to mention you have control of your mortgage numbers and those aren't going to
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  balloon on you unless you're in some kind of an adjustable rate mortgage and so on.
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  So we, we kind of bring it back down full circle and understanding that
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  kind of highs and lows, peaks and valleys that these buyers go through.
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  And then once we're kind of through the buyer's remorse and we have the
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  inspection and the appraisal and, you know, those things that could come up
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  and, you know, create conversations or concern, and then we move forward.
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  Then we resolve it.
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  In Colorado, our, you know, inspection resolution, appraisal
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  resolution are all resolutions.
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  So they're resolutions to the problem and then we're moving through, through
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  the process and it's closing day and then they have the stress of moving
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  and getting all that stuff going on.
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  So.
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  It's an extremely stressful process and stress is managed differently by every
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  single different human on the planet.
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  And so we, as agents have to be there to encourage and have empathy.
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  And, you know, at the end of the day, if, if the stress gets too big or at
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  something's uncovered that would make this not a great purchase, we have to
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  understand that it's okay to pull out of a contract based on your legal rights.
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  Due to certain circumstances and maybe not close that transaction.
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  And that's exactly where the psychology as an agent comes in, right?
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  Because you've worked so hard and you know, your paycheck is literally zero for
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  all those hours if it doesn't close, but that relationship will go much further.
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  So as we move from the buyer to the seller, the seller, okay,
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  this is absolutely massive.
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  Sellers are.
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  Excited they've seen the market.
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  They've seen all this appreciation, but they always want to
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  get that top dollar, right?
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  They're proud of what they've done to their home.
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  They're proud of the improvements they've made they're proud of the
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  investment that they made and showing that but they want to maximize it right?
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  We're humans Typically, this is the chance to maximize, you know An investment that
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  they feel they have a little skin in the game for and that's why ourselves
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  as real estate agents Are valuable to them is how do we maximize this?
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  Certainly it's going to cost you some money to work with a professional.
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  However, this is what I'm bringing to the table.
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  I'm going to try and get you over.
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  This is what I think your home's worth.
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  I'm going to try and get you a little bit more, you know, and get
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  it appraised and do all the things so that you can essentially, if you're
• 8:11
  happy with this number and we get this number, you're, you might even get a
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  little profit, but we're going to pay.
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  Pay my fees or you know, however you explain that to them but understanding
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  your value in that getting that max value and it starts with listening, right?
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  I tell the story often about how I had a client who had listed her home twice
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  hadn't sold in a pretty decently hot market great neighborhood and she was
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  frustrated with how it was marketed.
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  There was different things that had happened One of the things was that,
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  you know, she, she felt it was a huge selling point that you could walk to
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  the grocery store and the schools, without crossing a busy street.
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  Of course, I heard her say this over and over and over again, so I'm listening,
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  and I know that that's a key point.
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  Well, when I did the listening video, I definitely highlighted that with
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  drone footage, with my words, what I said, and this was something that
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  she included in my testimonial.
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  That was a difference between working with me and working with somebody else
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  who wasn't listening to what she felt was important in order to market the property.
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  Certainly we are experts in marketing properties.
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  That's our job.
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  However, listening to the things, especially with an
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  emotional seller who's attached.
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  To that investment to what they've done to the home is absolutely key So if you're
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  going to properly identify where your clients are we are going to have to listen
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  to them And maybe not communicate right away I you know acknowledge the fact that
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  she was talking about that but it wasn't until I mentioned it in the video that
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  was then, you know syndicated across all the social medias and everything and That
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  she really realized that I was listening.
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  I was different.
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  And so having that, and that was huge to her, we ended up selling the
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  property for 50, 000 over asked, got more than she thought she could for it.
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  She was absolutely elated when she had a negative experience due to some
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  circumstances with, with the other agents.
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  So just listening and having that and cluing into what's
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  important for your seller.
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  Because it's not just a transaction to them, even if it is an investor,
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  a hardcore investor, and it's, you know, buy, sell 1031 exchange,
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  it's more than that, right?
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  Because we're dealing with people's money.
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  We're dealing with people's livelihood and that's super important.
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  So you have to clue into.
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  Their why, as much as, you know, we talk about our why as agents and why
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  we do it, we have to clue in to our clients why in order to really understand
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  and serve them to the fullest and have them walk away a happy customer.
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  So all of this, the listening through the process, grabbing on to names and
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  birthdays and anything we can do to you know, connect with our client, right?
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  All of this is just building trust and empathy, right?
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  If they have to tell you three times what their criteria is, That means
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  they understand you weren't listening.
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  Maybe you're too busy.
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  Maybe You know, you don't care as much about their relationship
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  versus their transaction.
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  And so that listening piece and then showing it, right?
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  How do you show empathy?
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  How do you bring that up?
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  Right.
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  For my client, the seller, I was able to show her the video
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  and she heard that I heard her.
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  And so that.
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  Showed her that I really cared on a different level than most agents
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  that she had dealt with in the past.
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  So, if you are able to listen and communicate, you are going
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  to build that trust and build that empathy with your clients.
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  And this is absolutely the case.
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  And then, understanding what they're going through, right?
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  Certainly.
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  You know, we have these inspections and I could go through an inspection, know
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  exactly what we're, we're going to object to and what, you know, the seller is going
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  to say, however, there's two variables in there, the buyer's feelings and emotions
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  and the seller's feelings and emotions.
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  And so we have to not only listen to what the buyer wants and go from
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  there, we also have to present it in a way that would allow us to
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  win, you know, the negotiation.
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  So using, using the psychology piece, you know, from taking your clients, right.
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  And guarding.
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  Their emotions and maybe their feelings from the other side in order for the
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  other side to actually accept what we're asking to do is all in the presentation.
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  And so that's, that's absolutely massive as well is the psychology
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  of, you know, kind of guarding the client's feelings, right?
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  Well, that's crazy, you know.
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  I can't believe they did that or I can't believe they painted it blue or whatever
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  you want to keep those things to yourself as And understand what's important so
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  sift through some of the you know surface level emotions and sift through the
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  important stuff Okay, I'm not handy.
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  I absolutely need you know that concrete taken care of or that You know framing
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  fixed in the basement, whatever that is.
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  You have to take that information and Present it in a way that you know you can
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  get a win for your buyer as the seller.
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  Likewise, you get an inspection objection on the seller's side.
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  Boom, boom, boom.
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  A million different things.
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  Everyone's overwhelmed.
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  You have to sit down, break it down.
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  Okay, first of all, how much is all of this going to cost?
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  Because some line items on an inspection objection could be a hundred bucks.
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  Right.
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  Some could be a hundred thousand depending on what it is.
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  So you have to break it down, bring it back to reality and then say, okay,
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  like, you know, we're going to have to probably fix this regardless of if we
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  sell it to this buyer or the next buyer.
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  So this is something we should probably take a look at.
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  Well, if we do this, this, and this, they'll probably, you know, give up on
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  the, you know, minor thing here, or maybe.
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  Even one major thing, if we handle a bunch of the minor things.
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  So you look at it from a psychology perspective, present it in a way
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  that's like, okay, we're just trying to get to the end here.
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  They're trying to get, you know, a house that's solid that they
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  can feel comfortable moving into as a solid investment.
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  You're trying to get the most out of your house and, and be, you know, rewarded
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  for everything you've done for it.
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  So just appealing through that psychological inspection is one of
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  the most tactical pieces of my client relationship is building it, making all
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  parties feel like they won so that we can move forward and get to the closing
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  table is absolutely key to my real estate business and should be to yours.
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  So ultimately psychology is something that I do truly use every single
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  day in my real estate business.
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  And it's not because I, you know, went to the classes and passed the stats
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  class and passed the, you know, sensory, psychology class and the sports psychology
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  class, all those classes, it's because you have to just be present and dial
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  into what matters for your client.
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  And a lot of times people wear their heart on their sleeve, right?
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  That's kind of a cliche, um, but that'll tell you a lot on how
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  to proceed, how to, you know, go forward with the transaction, right?
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  Say, you know, they feel a little beat up at, you know, negotiations
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  from going under contract and they're ready, raring to go for the inspection.
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  You just mentioned to them that the inspections for education, the
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  property, we just want to make sure that you're making a safe investment
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  and that, you know, some, you know, major things may be coming up.
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  Oh, there's something that, you know, is a major issue right now that needs work.
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  Well, let's ask for it.
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  Right.
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  But let's not nickel and dime.
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  Let's not try and make up, you know, all the lost on, you know, the, the
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  contract negotiation right here.
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  And so it's very important to understand, talk about that, manage their psychology
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  and their emotions throughout and communicate appropriately and above
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  all else, show empathy and understand.
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  And I sometimes have to remind my new agents that I train and coach, you know,
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  understand that this is a much bigger deal to them, probably the biggest
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  deal they've ever been involved in.
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  So you have to understand that what they want to go forward,
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  you know, maybe it's a bad idea.
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  Maybe you're coaching them against it.
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  That's what we're taking forward, right?
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  And, and you have to develop the skills.
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  And as you get experience, you will have the skills to make sure that what you're
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  presenting is absolutely, you know, in line with getting a win for your clients.
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  So, that's all I just wanted to touch on that.
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  I thought it was really cool, that it came up and I've been thinking a lot
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  about the psychology of buyers and sellers as the market shifts and shifts back.
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  And so I wanted to bring that to you today.
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  If you liked what you heard, throw me a thumbs up.
• 16:03
  If you've had experience with some of this and want to put a comment
• 16:07
  below, I absolutely encourage that.
• 16:09
  If you're listening on the podcast, I appreciate that.
• 16:11
  That community is growing.
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  A review on the podcast platform you listen to would be absolutely
• 16:17
  appreciated as well as sharing this with your, your favorite Realtor.
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  We'll talk to you soon.
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  Have a good one.