- Barbara Corcoran once made over $1.2 million by selling 88 apartments in less than three hours.
- The "Shark Tank" star modeled her strategy on a puppy sale she watched as a child.
Barbara Corcoran once sold 88 lousy apartments within three hours, making her $1.2 million, by cribbing from a puppy sale she witnessed as a child.
The real-estate tycoon and "Shark Tank" star was tasked with selling the apartments in the early 1990s when interest rates were a sky-high 18%. Virtually no one was buying property in New York at the time unless they were among the few who could pay in cash.
Corcoran's solution was to emulate her grandad's next-door neighbor in New Jersey — a farmer who sold litters of Jack Russell puppies. The business mogul told the story on the latest episode of "The Tim Ferriss Show."
The farmer only had eight or nine puppies to sell, yet there was a long line of expensive cars from New York City outside her home.
"All these fancy city people have come to buy the puppies," Corcoran recalled her mother saying.
"There must've been 30 cars waiting to get a puppy," she continued. "And there was so much fighting in the line when the last puppy was taken, because there weren't enough puppies to give everybody a puppy of course."
Corcoran — who would later turn a $1,000 loan into a real-estate empire — learned that the farmer regularly held these sales and always overbooked appointments.
Pups to props
Decades later, the Corcoran Group founder applied the same thinking to sell dozens of "dumpy" apartments that were "just really the losers in the marketplace," she said.
"So I priced the 88 apartments exactly alike," Corcoran said. "Different floors, different locations, views, no views, kitchens, didn't have a kitchen, had a back wall, whatever — equalize them like the puppies."
Corcoran listed every one of them for $100 shy of $60,000. She then told her roughly 150 salespeople to bring only their two best customers to the sale, and organized a bus with a banner reading "Deals on Wheels" to ferry the prospective buyers to the Upper East Side location.
"I had almost 180 people waiting for me, the morning of the puppy sale, the morning of the one-price sale," she recalled. "And you should have seen the couples, the individuals running."
Corcoran fanned the fervor by signing scores of dummy sales contracts, placing them next to unsigned ones, then telling interested viewers, "These are taken, sign the contract here."
She ended up selling the whole lot in less than three hours, and made a "juicy $1.225 million" that she used to open two offices.
Corcoran made sure to work in that the customers invited were the "pick of the litter," yet even the "runt" of the apartments sold that day because the viewers "could turn around and see another 100 people in line."
Her key insight from the puppy sale was the power of scarcity in driving demand and spurring people to pay up — even if it's an artificial shortage created by overbooking appointments or busing in a bunch of customers.
Charging the same amount for all the apartments signaled they were interchangeable, and there was no need to take a closer look to identify the best one.
When buyers find themselves in a crowd of people clamoring to take home a puppy or buy an apartment and there aren't enough to go around — and the clock is ticking — it's much easier to get them to close the deal than if they don't feel any pressure or fear of missing out.