Misguided Pressure Tactics in China

Sunday, December 2, 2007 0:04
Posted in category The Big Picture

During my 4.5 years in Shanghai, I have spent a lot of time on real estate.

I have never been an agent, but I have assisted clients find retail, residential commercial, and industrial space to rent or buy. I have worked with Funds, with global 100, and with SMEs… and if there is one thing that I find myself continually irked by is the misplaced aggression of real estate agents and owner reps. for without fail, whether I am in SIP looking at commercial space or Pudong looking at retail or Chengdu looking at residential… the property that I am looking will be gone if I don’t right RIGHT THERE.. or within one of the following 6 calls from the agent I will receive telling me this.

One of the best examples of this was while I was working on a coffee store project. the entire management team was in Shanghai, and we had seen 10-15 properties over 2 days. The agent was anxious to say the least. Working both phones at the same time, and taking in coffee on top of that. At one point, we found a store that made sense. It was a villa with a garden, met the space requirements, already had a full kitchen installed, etc… it was 95% there… and the agent read this on their face. However, rather than give us the time to discuss the options without interruption, the agent called insistently asking “if we needed anything” and that “there were others in final negotiation, and we needed to act fast”. In the end, their misplaced pressure worked against them and the client chose another property… for the record, the property still has the same tenant from 3 years ago.

Going through this again with another client right now, I was reminded of just how some things never changed. My client is once again receiving the hourly reminders that the site may be “lost at any time” and that “they need to act fast”. and once again, the client is going to walk. Not because they do not like the property, not because they are not willing to work with the negatives of the property, but because they have correctly read the situation.

There are no deals of the century. and there are always going to be other opportunities

Had the agents understood this and taken the time to understand the needs and concerns of my client rather than focus on the chatter of the landlord, then I am confident that each deal would have had a much higher chance of success.

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4 Responses to “Misguided Pressure Tactics in China”

  1. Dries van de Wal says:

    December 3rd, 2007 at 11:33 pm

    I agree partly on this as I am working as a real estate agent in Chengdu and when I was do a competitor analysis I had some of the same experiences with other agency’s. I even had an experience during my job that another agency went to the hotel of OUR client and tried to contact him directly @ his room. The client got scared of course and contacted us that another agency contacted him so directly and if this was normal in China.

    In that part I totally agree with you.

    But it is pretty generalizing to say that all agents are like that.
    We are a foreign owned real estate company and we never push our clients like this. Of course keep in touch the days after the house tour but always give them enough time to think about their choice and never push them into a direction. We only help them making a choice and advise them on what are the pro’s and cons from the place.
    The thing I want to make clear is that there are a lot of bad service company’s who are way too direct but not all agency’s are like that.

  2. Rich says:

    December 4th, 2007 at 1:07 am

    Hi Dries,

    Thanks for your input.. I thought you might chim in.

    I am of course generalizing a bit, and I would say that this is a reflection of my experience primarily on the investment side more than the agency side. Although, it was the interaction of an agency that motivated me to write the post!

    For me, this is more about making sure people understand that this tactic exists.

    I know of a few firms who have been pressured into deals they may not have taken were they given the proper amount of time. Of course, they share some of the responsibility for making the decision in the end, but had they done a better job of focusing on the SWOT of the project rather than on the chatter… well, you get my point

    Hope all is well in the Du!

    Rich

  3. Dries van de Wal says:

    December 4th, 2007 at 2:52 am

    Hi Rich,
    I understand your point for sure and there are unfortunately still agency’s who work in this “cheating” way and pressure way too much on my opinion. Besides this I think this “There are more clients for this place so you have to decide fast” tactic gives you away very easily I think.
    Anyway we understand each others point.
    Everything is still going well here in Chengdu. I Hope you succeeded with the survey in Chengdu.
    Dries

  4. Rich says:

    December 4th, 2007 at 9:47 am

    Dries,

    Everything is going well with the reports (more details to come), and thanks again for your assistance!

    Pretty soon, there will be people getting a call from me. Buy NOW!

    R