As I mentioned a few blogs back in Ongoing Insanity in the Housing Market, we are considering moving due to a pending rent increase of unreasonable proportions – 35%! Consequently, for the fourth time in Beijing, I’m looking at apartments in and around Wangjing. Over the years, I’ve noticed some patterns when it comes to real estate agents: the tendency to show places beyond the stated budget, or to show a two-bedroom flat when the agent was informed of the need for three. However, the other day I heard something that smacked so much of familiarity, I knew it could not be a coincidence.
As we arrived at the prospective apartment, another agent showed up representing another potential renter to check on some details. This was a surprise to our agent. Essentially, the “other renter” had already asked for the apartment, but was unable to get a deposit to the landlord until the next morning. Why this sounded familiar to me is I had heard the same story before. Several times. It is not unreasonable for this to occur, but the number of times I have been told this surprising development reminded me of my lessons at Portland State University in Persuasion – arguably one of the best classes I ever took because it taught me to recognize when sales people are trying to manipulate the situation (basically all the time) and how they do it. In this case, the owner of the flat, and likely my agent, had created a sense of scarcity with respect to the apartment we were being shown. After some discussion, our agent informed us that if we wanted to rent it, we had until 9PM to decide and sign a contract. Even though the other renter had already agreed to pay an additional RMB1,000 a month more than we were willing to pay, the landlord would give it to us today rather than wait for the other person to come in the morning.
Now I realize that I am charming, exceedingly handsome, and have an enchanting wit, but since I had hardly spoken a word or even glanced twice at the landlord, I’m sure he was unaware of my winning traits, so why would this story hold up? And why do I keep hearing it whenever I see a decent prospective apartment?
Using scarcity, intentionally or otherwise, actually works. It’s that unstoppable itch that makes you answer your phone when you are in the middle of a conversation with someone already (you might otherwise miss the call), it’s what makes you purchase something because it is only available for a limited time (McDonalds has used this notoriously with their McRib Sandwich in the USA), Amazon uses scarcity when they let customers know that only a few items are left in stock, and it is what influences a person to buy a used car when they see someone else checking it out at the same time (here’s a hint, if only two people respond to your ad on a used car, schedule them to arrive “accidentally” at about the same time to check it out). Lo and behold, scarcity can work when a realtor is showing you an apartment. I’m not saying that is what all landlords or real estate agents are up to, but I’ve seen it enough to suspect most of them.
Now if you will excuse me, I see that Cutco Knives are available on the Home Shopping Network, but only for the next 15 minutes. Honey, where’s my credit card?
photo by Calgary on Flickr