Once again I pick up where I left off discussing Robert Cialdini's great book Influence and particularly how it relates to real estate investment. (You can see my whole series at my BiggerPockets archives here.)
This week I look at the scarcity principle,
"Indeed, one of the key rules of sales is that “you must always be willing to walk away.” This in and of itself highlights the principle of scarcity, because if the seller of buyer knows you are on the hook, then they will know they have all the leverage. They have at least one buyer or seller. But if you’re willing to walk away, they may have one buyer or seller, or they may have none at all and be forced to start over in their search to make a deal."
As Cialdini notes, "People seem to be more motivated by the thought of losing something than by the thought of gaining something of equal value." And this very clearly relates to real estate investment as every guru will tell you (minus the psychological terms of course),
"Every real estate investor knows that an important key to finding good deals is finding motivated sellers. The reason is simply that the seller fears missing out on a chance to get rid of the property more than missing out on getting a good price, so there’s an opportunity there."
But that's only scratching the surface. There's much more an investor (or anyone for that matter) can apply this principle to.
"Every day is a new life to the wise man."
The Righteous Mind
Star Slate Codex
Consulting by RPM