Why Building Rapport Is the First Step Towards Closing (Almost) Any Real Estate Deal
Every real estate guru has been saying this since the days of William Nickerson: Always build rapport! It might seem obvious, but it’s hard to understate just how important rapport is when it comes to real estate or any other business. Still, many of us shrug it off.
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I should, of course, note that in some instances, this is not necessary. For example, when making offers on HUD homes (houses that were repossessed by the Department of Housing and Urban Development), it’s really just a numbers game. You submit an offer and then some asset manager in some distant place makes a decision. But whenever you are dealing with a flesh and blood human beings, rapport is critical.
And I really mean whenever. For example, the mere act of a doctor spending extra time with a patient appears to reduce the likelihood of malpractice lawsuits irrespective of outcome.
In his book Influence, Robert Cialdini simply calls this “the liking rule.” He describes a simple, but very illuminating example:
“There is a man in Detroit, Joe Girard, who specialized in using the liking rule to sell Chevrolets. He became wealthy in the process, making hundreds of thousands of dollars a year. With such a salary, we might guess that he was a high-level GM executive or perhaps the owner of a Chevrolet dealership. But no. He made his money as a salesman on the showroom floor. He was phenomenal at what he did. For twelve years straight, he won the title of “Number One Car Salesman”; he average more than five cars and trucks sold every day he worked; and he has been called the world’s “greatest car salesman” by the Guinness Book of World Records.
“For all his success, the formula he employed was surprisingly simple. It consisted of offering people just two things: a fair price and someone they liked to buy from. ‘And that’s it,’ he claimed in an interview. ‘Finding the salesman you like, plus the price. Put them both together, and you get a deal'” (Cialdini 146).
Again, this ain’t rocket science. Think to yourself whether you would be willing to buy something—even something you wanted to buy—from someone who was being a complete jerk. Almost just to spite him, wouldn’t you try to buy it from someone else?
But even more so than just not being a jerk, it’s important to be proactive in your friendliness. Indeed, never underestimate the power of genuine compliment—although I must also stress that I’m not referring to false flattery. For one, false flattery is, well, false and thereby dishonest. But in addition, most people can see right through it and it comes off as fake and manipulative. False flattery does more harm than good.
In addition to being friendly in negotiations, you should try to set up your own staff, team, or colleagues in such a way that encourages cooperation instead of competition (with a few exceptions, of course; for example, employees working on commission). It’s important to know when cooperation works and when competition works. On your own team, you almost always want cooperation.
Cialdini describes one example of how easy it can be to set people against each other by describing an experiment done at a boy’s summer camp:
“What the researchers learned is that it didn’t take much to bring on certain kinds of ill will. Simply separating the boys into two residence cabins was enough to stimulate a ‘we versus they’ feeling between the groups; letting the boys assign names to the two groups (the Eagles and the Rattlers) accelerated the sense of rivalry. The boys soon began to demean the qualities and accomplishments of the other group; however, these forms of hostility were minor compared to what occurred when the experimenters purposely introduced competitive activities into the groups’ meetings with one another. Cabin-against-cabin treasure hunts, tugs-of-war, and athletic contests produced name-calling and confrontations. During the competitions, members of the opposing team were labeled ‘cheaters,’ ‘sneaks,’ and stinkers.’ Afterward, cabins were raided, rival banners were stolen and burned, threatening signs were posted, and lunchroom scuffles were commonplace” (154).
Later, when the experimenters had the two teams take part in activities that required the groups to cooperate, the hostilities slowly but surely went away.
Amongst those who work for and with you, be aware of what kind of environment you are creating. Again, there’s a time to be competitive and there’s a time not to be.
Rapport for Real Estate Investors
There’s a reason that so many business deals are done on the golf course. People want to do deals with people they like, and doing fun activities together increases such positive feelings toward one another (presuming the game isn’t too intense, of course).
Regarding real estate, we need to remind ourselves not to be in too much of a hurry. Say you’re looking at a house with a potential seller. Go ahead and shoot the breeze for a few minutes beforehand. Talk about anything other than the property. Be genuinely interested in what they have to say.
Also, don’t be afraid to compliment them. If the seller notes a personal achievement, go ahead and compliment (even if they are obviously fishing for compliments). If there’s a nice piece of artwork or something like that in the home, go ahead and say so.
And while I wouldn’t generally compliment the house (because you are trying to get a good deal and that would also put you at a disadvantage with the consistency principal), I also wouldn’t insult it or say anything the owner may take offense to. It’s their house and many will feel personally insulted if you say something about it is bad, even if it has no reflection on them.
I would also try to build rapport with potential tenants on showings. Go ahead and chat with them a bit before talking about the unit.
And then of course there are banks. You most certainly want to get on good terms with lenders and become friends with them. Don’t be afraid to buy a lot of lunches. And while this applies to people in all sorts of professions you will need to work with, it especially applies to lenders.
Overall, it’s a very simple lesson; people like to sell and buy from people they like. But while it’s simple, it’s often ignored. Never forget to always build rapport.
How do you foster rapport in your real estate dealings?
Let me know with a comment!