Negotiation skills are the key to the mint in real estate as well as many other businesses. But, understanding how to improve is challenging.
We believe that confidence and communication is the key to successful negotiations but that’s easier said than done. These eight tips will help and hopefully empower you to grow from within.
1. Listen First
We all know that communication is the key to negotiation. If you can effectively communicate what you want, why you want it, and why it’s good for both parties, you can win any negotiation.
There are a few things to consider here first. Have you built rapport with the other party? You need to have something worth negotiating on and if you haven’t already established a relationship with the other agent, it could be more difficult.
Don’t come right in with numbers. Ask good questions, ask about the agent, talk about the property, and talk about his or her client. Gently easing in with open and honest communication will make the process easier down the road.
2. Embrace the Awkwardness
Sometimes mastering negotiation skills is all about becoming comfortable while being uncomfortable. There will be awkward pauses, there will be times where two parties disagree, but that’s part of your job.
You have fiduciary responsibility and loyalty to your client so it’s important that you’re looking out for their best interest. The key is understanding that and becoming okay with it.
3. Be Emotionally Strong
Emotions can be the friend or enemy of your negotiation skills. It’s important not to let them get in the way but you can use them to your advantage as well. Positive and upbeat emotions will help create trust between two parties.
It’s crucial that you have a high level of emotional intelligence and you pay attention to the emotions of the other party as well. Take a look at their body language, how do they feel? The more you pay attention to their emotions, the more you can play on it in the best interest of your client.
Another important thing to consider is that you’re not doing anything wrong by doing this. It’s part of your job and something you should always remember.
4. Present Multiple Equivalent Offers
MESOS or multiple equivalent offers simultaneously is a concept coined by Harvard Business School and it involves making multiple offers at the same time in an attempt to close a sale. This can be a powerful strategy and one that is highly underutilized by a lot of agents.
For example, you can talk with your client and come up with two offers they’re willing to accept. One could be forfeiting an inspection to speed up the closing process in exchange for $5,000 off the purchase price. The other offer could be including all inspections, a slower closing, but adding $5,000 to the purchase price.
This makes the offer look a lot more desirable because it’s almost like a two-in-one. It also gives the agent's client more to think about which can take their interest away from other offers. Remember that the other agent has a responsibility to present all offers and you’re technically negotiating with the buyer or seller and not the agent.
5. Don’t Focus on Dollar Signs
While of course, money is gold in the real estate business, we don’t want to always focus on that in negotiation. Learning how to negotiate effectively is a lot more about understanding communication. By asking the right questions, you can understand what is truly important to the client and you’d be surprised that it’s not always about money.
For example, a client might be more concerned with getting a fast closing because they’re already closing on a new house. Maybe they’ve suffered a recent divorce and they just want to get out of the house as fast as possible.
Money might not be as important in this situation and they’d much rather someone who is already pre-qualified and can close in 15 days. You may be able to help your client get the house for a lower price by speeding up the closing process.
6. Use The Best Negotiation Books
Investing in the best negotiation books is always a good choice if you feel this is a problem area for you. These books will help you even if they don’t focus directly on real estate. You can apply what you learn in them to your situation and always find ways to make the most of what you read.
If you’re not interested in reading or simply can’t find the time, a lot of these books are converted into audiobooks and you can use apps like Audible and listen to them while you’re on the road driving to showings.
7. Understand the Role of Confidence
Sometimes we need to look deeper and realize that it’s not so much about negotiation and it’s more about confidence in ourselves. Imposter syndrome is something that a lot of new agents suffer from. It’s the feeling that you’re not good enough, you’re not qualified, and that everyone is more capable than you.
This is all in your head. It’s common especially if you’re young and new to the industry and you’re dealing with agents who have a lot of experience. You need to remember that they started right where you are and no one person is better than you. You’re just as qualified as everyone else and the only way you can learn is by falling flat on your face sometimes.
8. You Have to Ask
At the end of the day, you can’t get anything if you don’t ask. Don’t be afraid to represent your client and be aggressive with your ask. If you feel that you can get the client more for their home or you can get them a house for less than asking, you need to be upfront about that and make the offer sweet for both sides.
Why Is Negotiation Important?
Great negotiation leads to great success in the real estate industry, plain and simple. It helps you build relationships and develop a reputation in your community. People hire agents who aren’t afraid to put themselves out there and illuminate confidence.
But, reading about 5 negotiation skills, 6, 7, or even 8 will not make you a great real estate agent. You need to put it into practice.
One key to mastering negotiation skills is having an agency that supports you. At Christian Saunders Real Estate we believe that our agents are the key to our business and we’d love to help guide and coach you through your journey towards success. Click here to learn more about our agency and what makes us different.