Some negotiations go beyond the agreement itself. Learning how to navigate them effectively can have a positive impact on productivity and growth, writes broker Nick Shulkway.
Check out Parts 1 and 2 of this three-part series on negotiation.
I would like to conclude this series with a question that is one of the most important communication topics you can ever discuss. If you want to be a good communicator and a good salesperson, you need to learn how to ask good questions.
When you ask great questions and remain silent to allow the questions to do their intended work, a whole new world opens up. Once you practice these habits, you’ll never look at negotiations and relationships the same way again.
Good negotiators ask good questions. And, more importantly, they remain silent and wait for the other person to answer their questions. Open-ended questions that engage the other person can reveal a lot about their motivations and what they need to get the deal done.
Then, real estate negotiation, everyone immediately thinks about the negotiations that take place between buyers and sellers through their respective agents. While this is an important negotiation, there are far more important and often overlooked negotiations taking place every day. In other words, there are more negotiations to win, or at least more negotiations to win than lose.
For example, the negotiations that take place to convert a prospect into a customer are far more likely to predict success in real estate than the ability to convince a listing agent that a refrigerator should be included in the deal. It will be expensive.
Although this is about “real estate” negotiations, I would be remiss if I didn’t point out first that the most important negotiations are the ones we make with ourselves every day. Be mindful of when you get out of bed. And the mind, whether to train it or not, whether to control anger and fear, how to respond to a spouse or loved ones, what to stress about, what to let go of, etc.
These are all “negotiations,” and your ability to win more than you lose in negotiations is the biggest predictor of success in life outside of real estate sales.
Here is a list of some of the most important negotiations you will face in the real estate business (this list is not exhaustive; there are many others).
Prospects: Negotiating with yourself
This is the most important negotiation you will ever have, and the one with your fiercest opponent. The first negotiation of each day is you versus you.
Are you going to get out of bed when your alarm goes off, or are you going to lose the negotiation and hit the snooze button? Self-discipline to always win the negotiation with yourself is what makes the difference between a winner and a dreamer.
- Are you going to make time for what your heart and soul needs, like morning quiet time, meditation, reading, or are you going to lose the negotiation with the tyranny of the emergency?
- Are you going to make the calls you need to make today, or are you not going to make them?
- Are you going to write your notes and complete that CMA you promised?
- Are you going to be intentional about the relationships you need to build today, this week, this year, and throughout your career?
Negotiations with prospective buyers and sellers
We are committed to representing buyers and sellers in mutual negotiations. However, unless you can negotiate and set up consultations yourself and convert these leads into clients in the first place, you won’t even get a chance to get into that arena.
- How do you get prospect contact information at an open house so you can follow up?
- Can you convince a buyer or seller to meet in person?
- How can you convince buyers to cooperate exclusively with your company?
- How do you convince a seller to list their home with you instead of the dozen or so other agents they know?
Negotiations with client home sellers
Becoming a listing specialist takes years of study, work, branding, marketing, and mastering the art of negotiation. Listing your property is great, but you don’t get paid for active property listings. Closed transactions pay the bills and put food on the table.
If your listing isn’t placed correctly, isn’t prepared for sale, and isn’t priced close to market value, your listing won’t be the closed deal you want it to be. Your seller may trust you to a certain extent. You should be prepared to negotiate on various items that they may not like.
Negotiate how to prepare the house
- What if the seller refuses to paint the bedroom purple or says you don’t “need” to see the shag carpet in the master bathroom?
- How do you work with a seller who doesn’t want to remove all their personal items from the home?
- How do you address the issue of fee reduction?
- It provides a good/better/best approach and prefix Menu of services (from minimal to full-fledged marketing campaigns with different fee structures?)
Under negotiation of listing price
- Data, data, data: Show last month’s sales in that area.
- If you want to list something too expensive, show us what homes in that price range are like.
- If you decide to list at the top, make a plan and reduce the list after a certain period of time.
Negotiations with client home buyers
Similar to working with sellers, buyers may agree to use you as their agent, but that doesn’t mean your work is done. Our industry likes to use words like “education” and “expectation setting” to describe sometimes mundane negotiations.
Many of our clients come into the process with preconceived notions and ideas, often from a distant, mysterious uncle, that need to be corrected in order to be successful at the home improvement store.
- Loan Approval: How do you deal with buyers who want to see a home but are not approved?
- Discuss your necessities and location and get set up with an MLS search.
- Buyer Representative: What if they don’t want to commit to working with you?
- There’s no such thing as a “perfect home”
- What if you want to undervalue all the homes you like because the market is down and you heard all the sellers are willing to negotiate?
Negotiations with strategic partners (service vendors such as photographers, lenders, stagers, repair experts, etc.)
The service you or your customers expect is not necessarily the service you or they will receive. You need to be prepared to confront these shortcomings head-on and ensure a common understanding on communication, execution, follow-up, and standing behind the work completed.
The best way to get referrals is to give them, but don’t forget the important (and often unspoken) part of the equation. That means you need to ask for a referral. Ask and you will receive. Please enter “negotiation”.
- How can I ensure I get the level of service and communication I expect (timeline, delivery, communication)?
- Where possible, arrange to pay at the end of the transaction rather than upfront, and encourage them to “get a little in the game.”
- you refer to them. Will they introduce you? Don’t waste your referrals. They are valuable capital.
In real estate, there are many negotiations that take place in addition to the transaction itself. Your ability to successfully navigate these negotiations will determine whether your client will cooperate with you in the first place.
Simply put, you need to master these if you want to put yourself in a position to negotiate with other agents on behalf of buyers or sellers.