The Psychology of Unity: Why Real Estate Truly is a “Relationships” Business

by | BiggerPockets.com

In a previous series of articles, I noted many of the cognitive concepts Robert Cialdini highlighted in his fantastic book Influence, such as the power of social proof. Well, now he’s out with a new book on the art of persuasion called Pre-Suasion. He’s definitely the best authority out there on influence, and I highly recommend his work.

In his first book, he went over the six major human biases that make us persuadable, even if it is not necessarily rational, which are:

In Pre-Suasion, he adds a seventh: Unity.

In many ways, this is rather obvious. Namely, people are generally more likely to trust their “ingroup” (whatever they perceive that to be) than any outgroup. And obviously, one can quickly see the major downside to this, as virtually every war has had this ingroup/outgroup phenomenon underlying it.

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How Unity Differs From Reciprocation

An ingroup, however, need not be anything innate or physical. Indeed, it is much more flexible than that. Cialdini describes how he came to this conclusion and how unity differs from reciprocation as follows:

“…An older student… stopped and thanked me for solving a decade-long mystery in her home. She said that ten years prior, her family had received a Christmas card from the Harrisons of Santa Barbara, California. But neither she nor her husband remembered knowing any Harrisons in Santa Barbara. She was sure there must have been a mistake and that the Harrisons misaddressed the envelope. Yet her family had received a holiday card from them; so, true to the principle of reciprocity, she sent one in return. ‘We’re in the tenth year of exchanging cards with these people,’ she confessed, ‘and I still don’t know who they are. But now at least I know why I sent them that first card.’

“Several months later, she came to my office, declaring that she had to bring me up to date on the story. Her youngest son, Skip, was about to begin college at the University of California at Santa Barbara. But because of a repair problem, his dormitory wasn’t ready, and he needed a place to stay for a few days until the problem was fixed. Although the university offered him temporary housing in a motel, his mother didn’t like that idea. Instead, she thought, ‘Who do we know in Santa Barbara? The Harrisons!’ So she called and was relieved to learn that they’d be happy to have Skip as a houseguest. She left my office claiming to be more amazed than ever by the influence the principle of reciprocity had on human behavior—in this case, her own and the Harrisons'” (Cialdini 173-174).

As odd as this story sounded, reciprocity didn’t seem like the right explanation since there was no outstanding debt to be reciprocated. Instead, Cialdini concluded that “it was the ten year resulting relationship between the families that compelled the Harrisons to open their home to an eighteen-year-old they’d never met.” He further notes, “Our ability to create change in others is often and importantly grounded in shared personal relationships, which create a pre-suasive context for assent” (175).

A Relationships Business

This seems obvious when we think about it, but then again, rarely do we think about such things—and rarely do we act on them. I remember being at a seminar for real estate agents, and the guru was emphasizing how important it was to become genuine friends with your clients. He would talk about going bowling with them and their friends and whatnot, and then, of course, when one of them needed to sell or buy a home, he would be the first to call. And this network just webbed out from there.

I think his shtick was something cheesy like “grow your relationships, grow your business.” Cheesy works sometimes, I guess.

I am, of course, not recommending that you pretend to be friends with people in order to manipulate them. The point is that it’s more than just a saying that real estate (or any other industry) is a “relationships business.” We have an annual event where our entire staff goes to a baseball game, and we make it a habit to invite all of our key vendors and contacts (particularly the bankers). We also try to consistently grab lunch with key contacts or have drinks after work. In essence, relationships are built through cumulatively building rapport. And these relationships will be the backbone of your business.

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It’s also important to keep this in mind in negotiations. You don’t want to get lost in the details if a negotiation gets dragged out. A lot of people seem to be under the impression that you build rapport at the beginning and then move onto the nitty gritty until you can get the deal done or you have to walk away. This isn’t how it works—or at least it isn’t how it should work.

To illustrate this, review this example of when we purchased a portfolio of 97 houses. The deal took over three months to negotiate, and we met with the seller five different times before coming to terms. This is not to mention the countless emails and phone calls involved. Building rapport is a constant throughout this process. After a certain while, a relationship is built, which creates trust. With vendors, lenders, and other contacts, this trust increases the likelihood of getting financing or moving to the top of their priority list. With sellers, it increases the odds of getting a deal done. And with anyone, it increases the odds that when the time comes and you offer a service they could use, you will be on the top of their mind.

Has an ongoing relationship helped you build your business lately?

Let me know your experiences with a comment!

About Author

Andrew Syrios

Andrew Syrios is a real estate investor in Kansas City and a partner in Stewardship Properties along with his brother and father. Their company owns just over 500 units in four states.

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