Real estate professionals with finely tuned negotiating skills are able to deliver the best offers for their clients in the shortest amount of time. In return, they earn higher real estate commissions for their efforts.
Real estate negotiations can often feel like a pressure cooker so it is important to have an effective strategy in order to win. Negotiating for buyers and sellers may appear challenging and highly technical, but it is really all about getting the best possible deal for your client while the other party also feels they received a great deal as well. Perfecting these skills is essential in being a top real estate agent.
As you know, quite often price is not always the main motivating factor. While price is important, there may be other contributing factors influencing their decision. A savvy real estate agent who investigates what their clients really need will be in a better position to effectively negotiate on their client’s behalf. A temperature assessment will help uncover and gauge those factors that may be more important to them than price. You might start out by asking your client; “other than price, what other factors are motivating your decision to buy/sell this property?” Then, ask the client to rank them in order of importance on a scale of one to ten. This will help gauge where price fits in relation to other factors that are influencing their decision. You may discover that a seller may be willing to accept a lower priced offer in exchange for a faster close. On the other hand, a buyer may be willing to pay a higher price if the furniture is included. Of course, there are many possible combinations.
The Power of Information
When involved in a negotiation, it is important to gather as much information as possible. Since real estate agents and brokers generally represent either the buyer or the seller, you will need to work with the agent representing the other party to help you understand their client’s motivations and desires. Knowing who you are up against along with all the particulars about the property is vital in staying ahead. Negotiating is like a game of poker. The other party wants the pot, but you’re holding all of the cards! Once an offer or counter-offer is presented it is best to wait until the other party responds. If the other party responds with another offer, always try to ascertain the reasons from the other party. Quite often money isn’t always the driving force and they may be willing to accept other considerations to close the deal.
Perception not Pressure
Most real estate agents will win their negotiations by the perceptions they create as opposed to creating pressure. Pressuring the other party can be construed as being overly aggressive and could push them further away when you are trying to move them closer. Instead, use their motivations and desires to create a sense of urgency for getting the deal done today. With the fluctuations in the markets, it is important to be vigilant and know how to react in these types of situations. As long as there are options available, the deal is yours. The perceived loss of a deal by inaction often encourages the other party to make a decision in your favor. Learn how to use this strategy responsibly and if you are on the other side of the table, recognize the difference between perception and reality.
Time is a vital part of real estate and you can make it work for you in any negotiation. For some sellers, getting more profit out of the deal is their desire and for others it is the speed at which you can close the transaction. If a seller is reluctant to sell, draw their attention to the costs they are incurring by maintaining the property. It is also essential that you help buyers understand the importance of a timely purchase. Still, always ensure that you are getting your client the best deal possible.