Part of being a realtor means negotiating on your client’s behalf to help them get the best deal possible; right? And in this pursuit, you often have to negotiate with other real estate agents.
What makes you stand out is your ability to negotiate, which is a skill that heavily depends on your local and national real estate market. As the buying and selling of a home take place quickly, especially with the current market trends, you have to make the right financial decisions during the negotiation process.
6 Real Estate Negotiation Tactics
Are you ready to become a better negotiator? Then grab a cup of tea or coffee, turn off your mobile phone, and pay attention. In this article, you are going to explore some of the best negotiation strategies gathered from top real estate agents.
Do Your Homework
Before your negotiation endeavor begins, prepare a clear strategy based on the knowledge and experience you’ve gained so far in the industry. Define your ideal customers and the steps you are going to take to move them closer to a final decision. What kind of personalities are you negotiating with? Are there any non-negotiable points? What will be a win-win situation for both parties? Try to answer these questions while creating your negotiation strategy.
Don’t Show Your Cards First
When you are negotiating a deal, try to name the initial offer second. Why? Because naming your offer second can result in a better deal. According to Harvard Law School’s Program on Negotiation, negotiators were asked questions about their emotional state when they made the first offer. They suggested that they felt more anxiety than those who did not make the first offer, and, as a result, were less satisfied with their results.
Carry Out a Positive Attitude
Because you don’t always know how a client will act when you are going into negotiations, it becomes crucial to control your emotions and stay positive. Your own attitude determines the success of your negotiation efforts. So, trust your instincts and let your clients know how well you can handle their situations and finances.
Use Encouraging Tone
Using an affirming tone always makes sense when you want to welcome someone. In most cases, it gives you a positive reputation in your real estate community. Since you want to get to the closing table as easily as possible, having a good reputation is good for your business. While on the flip side, if you are a challenge to work with, clients and agents will simply walk away and won’t contact you.
Know When to Say ‘No’
Sometimes it’s hard to say ‘no,’ but it can be far more powerful than saying yes. Saying no doesn’t always mean you’re walking away. It means you want to make a fair counter offer and continue the negotiation process. However, be aware that your ‘no’ can make the opposing party walk away. Therefore, know their maximum purchasing or selling price. And if you don’t feel they are in the same ballpark, then don’t be trapped by saying ‘yes.’
Have a Backup Plan
Plans don’t always work out the way you want them to but don’t be afraid to fail. Learn from your mistakes than you do from your successes. Although you may have set up a wonderful plan for negotiating, it is wiser to have a backup plan in case the initial plan doesn’t work out. This will reduce stress and keep your mind at peace, helping you get through the negotiating process.
What’s Negotiable in the Real Estate Industry?
To become a successful real estate agent, you need to keenly look at the things that are negotiable in general. What can be negotiated and what can’t be? This question will define your negotiation strategy for that particular property. Below are a few items that are generally negotiable in real estate.
Negotiating price is quite obvious, and it is what most realtors negotiate first. The seller expects the highest price, while the buyer wishes to pay the least amount. Thus, it is usual that both parties may offer higher or lower prices before the negotiating part begins.
If your clients are buyers, then they have to pay a prepaid closing cost for their mortgage. A mortgage company will hold this cost in an escrow account. However, the client can request a seller to pay a small contribution (1–3%) towards closing costs.
When your clients are selling, they may want to sell as fast as possibleto avoid paying for the property listing. Because they are eager to get a huge financial return once the property is sold, the closing date can be negotiated to meet their requirement. Also, the closing date affects homebuyers’ monthly cash flow. If they want to skip the next month’s mortgage payment, they can negotiate and close at the beginning of the month.
When it comes to negotiating home repairs, homebuyers generally have the upper hand. You can urge your client to hire an inspector to perform a pre-inspection and discover issues that need repairing in the future. For home sellers, you can always specify that the property is being sold “AS-IS”. This will notify prospective homebuyers that repairs wouldn’t be negotiated.
Appliances and Furniture
Sometimes home sellers include built-in appliances and furniture, such as the refrigerator, cabinets, chairs, microwave, etc. So, consider including some of these appliances for negotiation purposes. Advertise them in the real estate listing. By looking at their serial numbers, check their quality. This will help you negotiate their monetary value.