If you have not learned the skill of negotiating, make it one of this year’s must do goals so you can get knowledgeable about the negotiating techniques that are best used in real estate and how to hone those skills.
REMEMBER In order to have a fantastic real estate business and a long, successful career you must learn how to negotiate effectively.
Why is it so important?
Because you are continually using this skill. You are negotiating all the way from the time you make an appointment with the seller or buyer until the papers are signed at closing. Here is what I mean.
Say you are working with a Seller. The first negotiation you encounter is when you interview for the job as their listing agent. If you are competing with other agents for this position your presentation better be sharp and concise and you should be ready to handle any objection or questions with regard to price, time frames, or why they should choose you over the other competing agents. You will be negotiating on behalf of yourself at this point.
Even if this is a “come list me” (meaning you are referred by someone or this is a past client), you will most likely have to negotiate to get the home priced well with the current market or handle any objection they may have waiting to list or resistance to making repairs as a for instance . These objections need to be handled with finesse and keen negotiation skills. Negotiating here is proving your value to the client
Once the offer comes in, you are off again negotiating the best deal for your client. This offer could be based on many other terms other than the standard of price, financing, time frames, closing and possession. You will be negotiating with multiple individuals at once.
THe Balancing act
First you must cooperate with and handle any objections posed by the coop agent to get agreement of both parties. The parties on either side can involve many different entities especially if the home is in an estate or multiple family members are part of the decision making body.
If multiple offers are received you will need to perform a delicate balancing act with your seller and the other coop agents to negotiate again. Again, more than just the multiple offers received you may have multiple sellers that must all agree.
I had a transaction one time that involved 15 different sellers as part of an estate of a deceased relative. That was a little nerve-racking since many of them were out of state and some had their own agenda which did not include the majority of what the other sellers wanted. We made it through but it was very challenging to get everyone to finally agree.
You must be prepared
Sometimes one party or the other will fight harder to get what they want. You must be prepared to have good scripts to handle unreasonable objections and know what to say to get everyone reasonable and realistic. Negotiating here is getting everyone reasonable and moving forward.
Negotiating during inspections
Next up are the inspections. Say for instance, there are items of repair and the Seller refuses to make the repairs you will have some tough negotiating to do when neither of the parties can agree.
Sometimes a good negotiating technique is to let go of the outcome. Letting the Seller know that this is his decision to do whatever he thinks is best, but adding the Buyer has expressly told us that he will walk if we can’t come to some reasonable agreement, might just get the Seller off the fence and over his stubbornness realizing this sale will not go through. Negotiating here is getting agreement from all parties whenever possible to the benefit of both.
What happens when the home does not appraise?
If you are on the Seller’s side and you feel the appraisal is unfair or incorrect you will need to ask for a reconsideration of the appraisal. You had better have your facts straight and be prepared to present to the appraiser the comparable listings you presented to the Seller at the time of the listing.
The ball is in your court as the listing agent and having strong negotiating skills, a strategy and the hard facts to back it up, will give you the edge to getting the appraiser to agree on value and keep the ball rolling.
Negotiating here is proving a concept you know to be true but also being flexible in discussion and willing to hear the other persons side of it.
THe closing falling apart
Have you ever had a coop deal start to fall apart right before closing?
Buyer’s remorse sometimes sets in with a buyer and they want to quit the deal and walk away. This is the time to seek cooperation with the other agent to come up with a solution to the problem and work to get the buyer back on board.
What if it were your buyer that wanted to quit?
What would you do?
What would you say to ease their fears?
How would you get them off the cliff?
Negotiating here is helping the client over the fear factor and getting them back to motivation as to why they started this process.
EVERYTHING IS negotiating!
I will tell you that learning the skill of negotiating has kept me in the real estate business for over 26 years. I am constantly negotiating on behalf of my buyers and sellers, but I must also negotiate on behalf of myself. And you will too!
For instance, you are in a listing appointment competing with 2 other Realtors, how do you beat them out? As I mentioned before, you must be prepared and confident to handle any of the objections the Seller has for listing with you over someone else and you must continually prove you are worth hiring. What if you are up against a discounting firm? You know the Seller wants to save money and get all the services….right?
Well how do you prove your points of difference and why you are worth the fee you are charging?
This business is emotional
I have stated many times that you have to be a bit of an armchair psychologist to do real estate. I learned pretty early on that I was dealing with the raw emotions of human beings. Money, family, the right location and the death of a family member are just a few of the things that keep people up at night worrying and questioning themselves about whether this is the right decision for them or not.
What is keeping them up at night
Buyers worry about things like “Am I buying the wrong home. It could be an expensive mistake. What if after I buy the home, I can’t afford it?” What if I get relocated the first year with my job and I owe too much and I can’t sell my home? These are all really valid and serious concerns of a potential buyer or seller. So do you see how being prepared and skillful in negotiating, compassionate and caring can help them overcome these fears or concerns?
Negotiating Is Another Name For Problem Solving.
Effectively handling these fears means taking the time to sit down with them for a consultation. I tell all my prospective buyers that we will schedule a consultation to go over their wants and needs, talk about financing, closing costs and location.
We will address at that time any and all questions or concerns they have. If they resist I simply tell them that we need this time together for me to do the best job I can do for them. That is negotiating script to get them to agree to meet. All of the problems I mentioned above have solutions but if you don’t even know there is a problem you can’t help them solve it, right? This is the important reason for all consultations.
Think about the fact that buying or selling a home is a life event. Ask yourself, why do people want to own a home? The answers will range for their particular needs but the most common ones are to raise a family, relocate for a job position, settle into a specific community, invest, be close to friends and family, downsize into something smaller and more manageable or achieve the American Dream because that is one of the rights of passage and so much more!
The light at the end of the tunnel
So as a great negotiator and in any situation, you should be able to get the answers you need once they have responded to your questions. At that time you will be able to get them seeing the light at the end of the tunnel and work through any problem that presents itself throughout the transaction, together.
Books to read
I believe the most important prerequisite you need to be able to call yourself an outstanding Realtor, is to have amazing negotiating skills. I suggest you read some of the books on my list. My favorite of all time is by Chris Voss, “Never Split The Difference”
“Getting to Yes” by Roger Fisher and “Getting Past No” by William Ury and “Fierce Conversations” by Susan Scott are all excellent books to study and learn practical skills that you can use in every aspect of your life.
You can get these books on Audible especially if you are like me and many other busy Realtors out there and don’t have time to sit down and read.
Check out my online coaching course “Million Dollar Producer”, where you will learn even more objection handling scripts, tips and learn how to elevate your real estate business to the next level!