21 Jun HOW DO I BECOME A MASTER OF REAL ESTATE NEGOTIATION?
Originally written by Terri M Cooper and Dirk Zeller and re-created here with their kind permission
Are you making money or, like many agents, going backwards? Having strong communication skills will mean success in achieving mutually beneficial outcomes during any negotiation. You can’t leave it to chance. Often, there will be a level of emotion on both sides when you are negotiating either for your clients or for yourself.
To be a great negotiator requires preparation and skill. Each negotiation will be different but there are vital keys to guarantee success. This article provides powerful tips to help you become a top negotiator.
A positive, confident attitude
Your own attitude will determine how successful your negotiations will be. Keep a positive picture in your mind of your success. See yourself handing the marketing monies to your office administration. Imagine ringing your buyer to say congratulations when the seller puts the final signature on the contract.
So often in life, you attract the outcome that is in your mind — so make sure that your thoughts are positive! Expect success and you’re well on the way to achieving it.
Do Your Research
Before every negotiation, prepare your strategy based on knowledge you’ve gained right from the beginning of the relationship. Define your ideal outcome and define the steps you will take to move both parties towards this outcome. Ask these questions:
- What personalities are you dealing with?
- Who do you think is the decision maker?
- What were the non-negotiable points?
- In which areas is it likely that concessions might be possible?
- How are you going to handle any emotional outbursts?
- What could be a win-win situation for both sides?
- What has happened so far?
Know your plan in advance
Having a strategy is paramount. The best negotiators always set their outcome before the event. They know in advance the result they want and plan the steps to get there.
Good negotiators never ‘wing it’. They plan and sometimes they even rehearse and role-play. They get to know the personalities and communication styles of their clients and their customers. They think through possible objections and stumbling blocks and make sure that they know how to handle these. Rehearsal, either out loud or in your mind, is crucial to your confidence and your competence, and ultimately to your success.
Revisit the motivation for both parties
Do this before you begin your negotiations. Be careful not to focus only on what is above the surface. Often the negotiation will be successful if you can fulfill the underlying motivation, which will be revealed only in the presence of trust between you and your client.
You should have elicited this early in the client relationship but if not, it is vital that you explore this issue now. You need to know:
- Why the seller is selling at this particular point in time.
Is it just for the money or is it more likely to be for what the money will enable them to do? This is the important thing you must know when planning your strategy. Otherwise the price issue will overshadow everything and ego and pride can come into play.
- Why the buyers want to purchase this particular property.
What are their original motivations — what were their needs and their requirements? You must read between the lines to elicit what is special about this particular property.
Doing this research — that is, really knowing your client’s underlying motivation — is what will make the difference to how you plan your strategy and is what will move you to the level of a master negotiator.
If you know the other person’s needs and objectives, you are able to offer options that will result in a win-win. Think through all of the possible options and plan how to achieve the best one.
Be totally present to your client
Instead of stating your personal ‘very persuasive’ arguments, you must begin by asking open-ended, exploratory questions. Listen attentively to the other person’s concerns and needs, and take note of their current stance. Watch their body language and carefully paraphrase to ensure you have heard and respected their position.
Write down any salient points of concern
Even if what your client is saying isn’t clear or even rational, still take the time to demonstrate concern and respect by taking notes and writing things down. You may be able to refer back to these points at a later part of the process.
Be open to any emotional energy that is present
Active listening involves observing body language, signs of hostility, defensiveness or a closed-minded position. At all times, indicate with your words and your own body language your respect and empathy for your client’s position, especially if it’s not aligned with your own.
No matter what happens, don’t react personally
Remain objective and don’t become defensive. Instead work to understand the underlying problem. You must avoid inflaming the situation with aggressive responses of your own. This is the time to listen and stay firm but emotionally steady.
Do not underestimate the power of silence
Silence is a great tool of the skilled negotiator. Sometimes jumping in too soon with a comment or a suggested solution can undermine the negotiator and lose you the advantage. Be comfortable with silence — parties may need to ponder the outcome before they give an answer.
Do not come across as judgemental or critical
No matter what your client verbalises, try to put yourself in their position. Allow them to state their point of view and pause before giving a response. If you don’t agree, these actions will show respect and understanding and will predispose the other to withdraw somewhat and be more open to communication.
If you sense that the other person is not hearing or not understanding you, it’s your responsibility to explore other options to get your views across in a non-threatening way.
In advance, prepare your responses to the most common and expected objections. Brainstorm these objections with your coach or your colleague and practise effective responses.
State common objectives before exploring differences
If, for example, you’re negotiating a contract for sale, initially emphasise any terms or conditions that will be favourable to both sides rather than honing in on the differences in price expectations.
If you’re negotiating with a potential seller to secure an exclusive listing or perhaps vendor-paid advertising monies, focus on the benefits for your seller — don’t let your client keep you trapped defending the specifics.
Prevent your client expressing a rigid attitude
There’s an old saying, ‘everything is negotiable’, which is nowhere truer than in the real estate world. The best negotiators always ‘leave a little in the pot’. They don’t give away concessions too easily. They never allow the client to say things like, ‘that’s the price I want, and if I don’t get it, don’t come near me with stupid offers’ or, ‘that’s my final offer, otherwise I’m walking away!’
Once you let a client verbalise these words, it’s hard for them to lose face and back down in final negotiations. Always leave room for movement, even a little. Be flexible and realise that there’s always more than one way to get your result. Try to be in the client’s mind and get to know your client well enough to anticipate his reactions and behaviours. Remember the ‘win-win’ principle — this leaves both parties feeling like winners.