Nothing happens in real estate without negotiation. So as a Realtor, you need to hone the fine art of negotiation on a daily basis. Negotiation doesn’t just happen after the offer is made. It’s happening all the time—starting with the first phone call from a buyer or seller.
Negotiating effectively has two critical components: establishing trust, and understanding what the other person wants. You need to establish trust between yourself and the client, as well as building trust between the buyer and the seller. You need to determine when the other party can compromise and when they can’t. Learn about points of agreement and build on those. Learn about points of disagreement and find ways to make people happy without making them give up what they want. Sounds tricky, doesn’t it?
Here are three specific strategies for becoming a winning negotiator.
- Build trust constantly
- Be collaborative
- Do your homework
Build trust constantly
Every buyer and seller knows that the person on the other side of the table has interests that are in conflict with theirs. So everyone starts out feeling a bit apprehensive. It’s your job to establish rapport quickly. Show the other parties that you and your clients will be easy to work with. As a buyer’s agent, for example, show that your clients are qualified to buy the property. Show respect for other peoples’ time by responding promptly to offers and counteroffers.
Build rapport by sharing something the buyer and seller have in common—a similar hobby, kids the same age, fans of the same sports team—anything that will establish common ground.
If your buyer likes a property—say so. Some buyers curb their enthusiasm, thinking this will help the negotiation. On the contrary. The seller is giving up something very personal, sometimes under great pressure. He wants to sell to someone who likes his home as much as he does. You never lose by being real.
Collaboration, not confrontation, is the key to a successful outcome in almost any negotiation. The seller wants to sell. The buyer wants to buy. Create an atmosphere of cooperation. “Let me see what I can do” is a good response to almost any request by the other party.
Little things make a big difference. Sometimes good deals go bad because of a difference in the style or personality, so be conscious of differences. For example, if the other client is elderly or disabled, arrange a meeting time and place where they will be comfortable. If a seller loves her rosebushes, promise your buyer will take care of them; or better yet, let the seller take it with.
Do your homework
As a Realtor, it’s your job to stay on top of current market information in order to negotiate the best deal for your clients. Here are some questions you should be able to answer:
- What’s the current state of the local market?
- How long has the home in question been on the market? Has the price reduced?
- Has the home been sold before? What was the price?
- Is the other party under any kind of time pressure?
- Are there any offers pending, or on the table now?
Price is just one consideration when you’re negotiating for a home. Other terms, such as financing, closing date, repairs, or time of possession may be just as important. If you do your homework, you’ll put your clients in the best position to get the deal they want.
Take 100% of the responsibility for the outcome of the transaction. If the other agent gives wrong information, drops the ball on details, or is in any way untrustworthy, you step up to the plate. Double check everything, handle the paperwork, and meet the deadlines.
Negotiation is a skill that can bring you enormous success in all aspects of your life. When you’re a skilled negotiator, you’ll benefit your clients, your colleagues, and yourself.