11/10/22

Real Estate Insights

Negotiation Tips from a Real Estate Pro

There are so many movie scenes about high-powered negotiations. They all feature tricks like making your opponent sit in a tiny uncomfortable chair.  Or whisper/mumble, so they’re caught off guard and have to ask you to repeat yourself. 

Actual negotiations are different.

They do require confidence and a bit of psychology. But negotiations are more about finding common ground than anything else. The biggest learning curve is navigating different perspectives and expectations smoothly.

Having worked in real estate for decades, we’ve learned how to be effective negotiators. Our clients know they can trust us to fight for their best interests. So we’ve decided to share our biggest negotiation secrets. You can use these tips in all aspects of your life- not just real estate (go ahead and try for that promotion!).

Create win-win solutions

Just because you’re looking to secure a great deal doesn’t mean there isn’t something the other party can get out of it too.

For example, I may push for a lower sale price for my buyer…if they agree to work with the seller’s closing preferences or agree to cover a certain portion of inspection items.

In the workplace, you could vouch for a pay raise… but also take over weekly data entry (or whatever job your boss dislikes). 

Prepare for every scenario.

It’s important to be prepared. A skilled negotiator doesn’t offer only one solution. Learn about who you’re talking to before your meeting. Familiarize your situation, and what kinds of things would be valuable. 

Be ok with walking away.

This is the hardest but most important skill of a negotiator. It’s tough to walk away when you know your client has their heart set on a home. But their home won’t be dreamy for long if they’re hit with added expenses and an over-budget mortgage. If you want to be a powerful negotiator, it’s important to show that you can and will walk away if you don’t get what you want. We always consult with our clients before actually walking away. But it’s a powerful move. You wouldn’t believe how often your opponent will backtrack when they see they’re about to lose you.

How badly do you want that raise? Are you willing to work nights and weekends for it? Be able to recognize the opportunity cost of accepting a bad deal. 

Be diplomatic 

Don’t be coy with what you’re asking for. Be decisive, direct, and positive. Be truthful with your statements without using any negative language. If this is a struggle for you, you can plan out the language of important talking points ahead of time. 

Handle negotiations in person or over the phone

While diplomatic emails are an art form, they still leave a lot to interpretation. Email and texting leave a lot of room for miscommunication. Body language, tone, and demeanor play a  big part in negotiations. Face-to-face communication ensures that everyone is on the same page. Opt for Zoom or a phone call if it isn’t an option. 

Remember to listen 

Never interrupt someone during the negation process. Listen, take a beat, and choose your words wisely. The worst thing you can do is bring your ego (or temper!) into the conversation. Don’t feel like you need to rush a response. If you want to buy yourself some more time you can take a sip of water or take notes in between responding to an offer. It’s always better to listen, absorb, and formulate a calculated response than to rush through your words. 

Create creative compromises 

Come to the meeting prepared with a creative compromise that they might not expect. Catch them off guard to win the negotiation. But remember to maintain sight of your end goal. It can be easy to get distracted by counter offers and tangents, but you’re in this meeting for one specific reason. What is your bottom line? Take notes and reference them if the conversation needs some circling back.

What combination of offers can you create to reach your end goal? Even if you don’t get everything you want if the bottom line is met… it’s still a win.