As technology and web portals make housing information more accessible to the public, real estate agents find themselves needing to step up their game in order to provide real value for their clients. Show your clients that being a good real estate agent is more than just finding the right house or creating a listing.
People hire real estate agents for the skills and information they themselves lack, such as in-depth local knowledge, insights on market trends, and negotiation skills.
“Negotiation is about starting out with an ideal and ending up with a deal”
– Karl Albrecht
Be prepared to face your first or hundredth deal with well-practiced negotiation skills.
Negotiation Is About Preparation
Make sure you have all your ducks in a row before you “go to battle,” so to speak. Before you begin any negotiation process, sit down with your client to establish criteria by asking questions to determine their primary goals and objectives.
You also should do your research to gain as much information as you can from all relevant parties, including your own client, the other agent, tax records, and past multiple listing records. But preparation goes beyond just finding out information. You often need to prepare your clients prior to negotiations, as they may have misunderstandings of what it entails.
Prepare Your Clients On Negotiation
Not everyone may be familiar with the negotiation process, or have an incorrect idea of what it may entail. During your presentations, prepare your client, whether they are the buyer or seller, for how the negotiations are going to go.
You might say something like:
“I’d like to go over what happens when a buyer is interested in purchasing your home. The buyer and their agent will write an offer and deliver it to me. I will then present that offer to you. Here’s a sample copy of an offer and the paperwork that goes with it. There are more items than just the price that have to be negotiated. I’d like to go through the whole process with your so that you can be more prepared and confident when we’re actually negotiating with the buyer. May I take a moment and go over it with you?”
Then, as you review it, explain all the items that might be negotiated in your market.
Prepare Your Client For The Best and Worst Case Scenario
Part of preparing your clients for negotiation is to set expectations. Many people go into it thinking they may get everything or most of what they want. Set realistic expectations by describing both the potential best and worst-case scenarios. Then suggest that their experience will most likely be somewhere in the middle, but closer to the best case since you’ll be working hard to help all parties feel like you’re getting the most for them.
Setting the right expectations for clients creates peace of mind for themselves, while creating more confidence in your services. Negotiations can be stressful, and this knowledge may help them remain calm and have things run more smoothly.
Leverage Emotional Intelligence
Some people will say that you should take emotions off the table. However, good negotiators not only know how to identify emotions, but also know how to influence them. Being skillful in emotional intelligence could help you draw out the invisible motivators that are key to the negotiation.
Each side’s position is usually motivated by an outside influence, and until that influence is known and understood, negotiating can be ineffective. For instance, a seller could be motivated to list their home because they have to care for a sick relative, have a new job somewhere else, have a child on the way, etc. Without knowing their reasons and motivations, the buyer may just throw money at the situation when a what the seller is looking for is a quick closing to solve their invisible motivator.
A good negotiator will ask open-ended questions to get the other side talking, and listen in order to figure out their emotions and their motivators. Until you know the reason they want to negotiate, it’s not likely that both sides will close the deal on optimal terms.
Mirror Words and Label Positions
Mirroring the other party’s words and actions is a fast way to build rapport. It’s as simple as repeating the last few words back to them to acknowledge that you’re listening. It also enables people to feel safe and more comfortable sharing information.
Mirroring and labeling also helps to avoid the price “increase and decrease” game. Mirroring your negotiating partner aims to reinforce the main idea of the other side’s position back to them, including their justification for that position.
Often when someone feels unheard, they will dig deeper into their position and refuse to budge. Mirroring is important because it shows the other person that they are being heard.
“Labeling” is a strategy where one side attaches a term to the other party’s feelings. The purpose of labeling is to pinpoint the other party’s tactics in the negotiation. Usually, when a person hears an unfavorable “label” attached to their position, they’ll try to change that label.
On the flipside, putting a label on the only favorable part of the other side’s position to draw them closer to the good factors and away from the unfavorable ones. The way a label is characterized is just as important as the label itself.
Mirroring and labeling combined as negotiation tactics can change the conversation from a position movement game to a discussion about the greater goals of both parties. It can help to produce mutually beneficial outcomes rather than having a “winner” and a “loser” at the end of a negotiation.
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