There are three important areas for Realtors to be successful in to survive in any market. First and foremost is lead generation. Without lead generation, you can have all the skills, knowledge and ability to be a success but without clients, you won’t make a penny in the business. The next one is being solution oriented and solving problems for your clients. When you resolve issues, you become a valuable resource to your clients and will receive leads on an ongoing basis. And the third key area is negotiation and that is what we are going to cover in this blog today.
Let’s review some of the important pieces of the puzzle to negotiating successfully. To know where we are going we must know where we are coming from. First, start by analyzing previous negotiations. What went well, what didn’t & why. What did you learn? What did your clients learn? Review this with your new clients to set expectations of success in their transaction. By having the proper expectations, your road to a successful end is much more likely to happen.
Next, assess your client’s situation prior to entering the negotiations. Do your research. Ask lots of questions because information is critical to successful negotiations. Who is involved? What is your strategy? Where will you give concessions? What are your best alternatives? Where do you want to end up? Also, through your research determine, do we want to work with them? What is the motivation of the other side? When do they need to move and why? Who is the other party involved in the transaction and what is their background? Discuss what your options are with your client? Determine the “what if’s”. Then listen and take notes.
Also, remember, it is just as important to know what your side wants as much as it is to know what the other side wants. Do you know their position as well as your own? What are their objectives? How do you get the information? Ask the agent or lender about the client and their situation. Also, check them out on the internet, Google, social media outlets, DPOR and public records are just a few places to begin.
Who and how do you control the negotiations? The person who asks the most questions and gathers the most information and can build the bridge to a successful end. Plan your questions according to the situation so you can create win-win negotiations. Let’s review how you create win-win negotiations. Find common ground and build upon it to get the common goal of both parties. Discuss all options available to both sides to get resolution. If you come to a stall in the negotiations review how close you are to the final outcome, review how you got how you got where you are and why it is important complete the negotiations. Use your notes and remind the other side it is better to negotiate than not negotiate to get resolution on the issue creating the stall. Convey flexibility in one area over another. Ask other side to restate their position, gain understanding and restate your position as well. If the other side asks for a concession, say “yes if”. Focus on the issues at hand and not positions and be tough on the issues but not the people involved – separate them. Always seek to understand and be understood. Remind the other side of the mutual benefits of resolving the issue. Use we – not us and them. Ask the other side, “What would you do?” Never narrow it down to one issue – keep the discussions open and fluid.
What to avoid: getting confrontational; giving up walk away power or getting to the point of no return; giving up control; negotiating against yourself; improper use of concessions; assuming the other side wants the same thing as you; missing out on clues (good cop bad cop, flinching, stalling, red herrings, nibbling, higher authority, hot potato, any others, etc.); getting to bottom line too quickly; negotiating with the wrong party; negotiating price too soon and too quickly; not explaining your value – up front;
In addition to what we mentioned, we also need to strive for in negotiations are to keep an open mind – think outside the box. Focus on what’s right not who’s right – it’s not personal. If negotiations boil down to one issue – it’s a win lose…stay focused on give and take scenarios. Answer questions with questions to determine what they really want. Don’t pre-negotiate with yourself and don’t answer questions that weren’t asked. Keep your ego in check. You have more power than you think you have in the negotiations. Put things in writing so the issues are clear. No is just an objection that you need more clarification on – ask why they are saying no. Start high or low depending upon the situation you are encountering. List your assumptions on what will happen and the scenarios that will happen as a result of each option. Build a relationship prior to beginning negotiations with the other side – by having a relationship, the transaction will go more smoothly. Communication is the key – ask permission to ask questions. Never say yes to the first offer and know the reason why. Give in diminishing chunks. Always give the impression you have other alternatives and this isn’t the only choice to gain leverage. Keep your client’s information confidential. Realize your strengths in your situation. After making offer, remain silent.
Practice negotiations all the time and in different situations. Also, it is also critical to rehearse with an accountability partner prior to presenting your offer to the other side as you need to be sharp with your presentation skills.
By exercising and utilizing these tips and tactics, you will have great success in real estate. Get it? Got it? Good!