Psychology 101 includes the discussion on Maslow’s Hierarchy of Needs. According to Maslow, there are 5 levels of human needs shaped in the form of a triangle (see the chart attached). Before each level can be reached, the preceding level must be met first. In other words, the first level, physical and biological needs must be met before a person becomes concerned about safety and security needs. On the next level, social needs are not important until physical needs and safety needs are met. At the top of the pyramid, the ultimate emotional state a person can experience is self-actualization.
Let’s look at how each need can be applied to prospective buyers and sellers.
- Physical or Biological—Real estate prospects already have a roof over their head and food to eat or they couldn’t afford to buy a house. Don’t forget though, if someone gets hungry or tired, they aren’t likely to listen to you. Don’t cram too many showings into one day and don’t forget to stop for lunch.
- Safety and Security—This need applies to your integrity and reputation. We all want to do business with people we like and trust. It’s important for clients to feel that you are trustworthy and fair. Occasionally, a prospect will do business with you even if you’re not fair and honest if they feel it’s in their best interest. It is unlikely however they will ever refer anyone else to you or do business with you again if they can avoid it.
- Social—This need is a big one in real estate especially with buyers. Moving takes people out of their comfort zone. The sooner prospective buyers see that they will fit into a new location, the more quickly they will make a decision. A sense of belonging can come from many areas. It can be knowing neighbors, children the same age in the development, being members of a church group, or participation in a country club. It can even be as simple as your buyers finding out that residents nearby are from the same state, work for the same company, or are in the same industry. The more you can tell a buyer about a neighborhood and the more you can introduce them to residents they identify with, the more comfortable they will be with their purchase.
- Ego or Self-Esteem—This need has wreaked havoc on the real estate market in recent years. Economic uncertainty and fear of price depreciation have shattered both buyer’s and seller’s confidence in their ability to make a good decision. Their lack of confidence has paralyzed buyers and sellers alike. The strategy has been, “If I’m not sure, I won’t do anything”. “I’ll wait.” The best strategy for overcoming this need and rebuilding their confidence is to inform and educate. Otherwise, your clients are likely to apply the “Sheeple” strategy and just wait until everybody else is buying and selling. We know that this strategy has adverse consequences to everyone involved including real estate agents.
- Self-Actualization—Very few people achieve this level.
As you develop your buyer and seller strategies, be sure they take into consideration Maslow’s Basic Human Needs.