Industry News


Master Real Estate Negotiations

By: Philip Lilavois, CEO

 

One of the most powerful tools any real estate professional can possess is the ability to negotiate. Excellent negotiation skills start with building your knowledge of your client and the party they are negotiating with. It is the realization that there is so much more to real estate negotiations than just price. But price is usually, and may always be, the base starting point.

  • Price is such a valuable negotiation tactic because it is universal. It is also over-valued. Many times, price is used by strong-minded individuals as a measurement they have won. If you can identify these individuals, it gives you the edge to achieve other concessions in other areas.

Once you open your mind to the fact that there is much more than price involved in a negotiation, it frees you to be truly creative in getting a buyer and seller together. Here are just a few places to consider.

  • Determining who places the most value on time can be a powerful bargaining chip. Are one of the parties pressed by a deadline to relocate or by other financial issues? Assess which party places value on time and use that in negotiations.
  • Try to Determine the participants REAL goal. Many prospects take predetermined stances in real estate without realizing there are other options to achieve their goal. The fact is, most people purchase based on a monthly payment they can afford. Helping them find a mortgage just a half-percent lower is more powerful than negotiating a price that is a few thousand dollars less. Even helping them connect with a lower cost insurance provider can help them achieve a lower monthly cost.
  • Listen and Identify. Negotiating really starts with being a good listener. What are your client's goals, what is important to them and how will they even know they achieved their real estate goals? This is important in how they perceive you as their representative and how they judge your performance.
  • Don't Minimize the Value of Emotion. One of the reasons real estate agents are so valuable is their ability to take emotions out of the process. Listen for cues that indicate a strong emotional attachment. “Our children grew up here”, “I've put a lot of sweat into this house”, and even “We're looking for a home to raise our children” all are indications of the amount of emotional value prospects place in a transaction. If you minimize these values, you may be missing an opportunity to bring parties together.
  • Assess Tangible Assets. Many times, successful negotiations may be completed with something as simple as “If we can keep the living room furniture, we've got a deal”. Keep an eye out for cues to indicate what is triggering interest and value. You may have much more to negotiate than what you think.

There is a classic 1982 book written by Herb Cohen entitled “You Can Negotiate Anything” that is a good read for those wanting to expand their negotiation horizons. Add it to your list of resources like Realty Scout and you will improve your real estate skills.