4 Steps to a Successful Real Estate Negotiation

    

If you want to get to the next level as a real estate agent, you need to improve your negotiation skills. It’s really that simple.

Real estate agents spend the bulk of their days negotiating with all sorts of people, including clients, appraisers, inspectors, and other agents—which means they need to be exceptional negotiators to succeed in the industry. 

By taking these four steps every time you make a deal, you increase the chances you get the negotiation outcomes you’re aiming for.

4 Steps to a Successful Real Estate Negotiation

1. Get your own agenda out of the way.

First things first: You need to understand that the negotiation is not about what you want or what you need. 

Instead, it’s about your client and putting their interests first. To do that, you need to separate your emotions from the deal.

Unfortunately, far too many real estate agents focus on themselves. They’re looking at the transaction as a paycheck for their mortgages or their kid’s college tuition. But none of that has any bearing on your client’s situation.

Getting your own agenda out of the way starts with using Tactical Empathy™ on yourself. Use Labels™ to determine what you’re feeling. Once you acknowledge that, you can let the feelings pass and move to the next step.

What if you could close more real estate deals? Check out our e-book, Real  Estate Negotiation Skills: 3 Essential Tips for Closing More Deals »

2. Focus exclusively on what your client wants to accomplish.

Once you’ve gotten your agenda out of the way, you can focus on your client’s needs. 

Of course, sellers always want to make more and buyers always want to pay less. But the best agents are able to dig deeper and uncover not what the client thinks is realistic, but what they really want to buy or sell their homes for.

Does your client really want to sell their home for $1 million? Or are they really hoping for $1.1 million?

Chances are that they won’t tell you what they want upfront. 

Use Labels, mislabels (i.e., Labeling something incorrectly), and Mirrors™ to explore how much more a seller really wants or how much less a buyer is willing to pay. 

Here, you’ll also identify anything else that might be important, such as if someone is emotionally ready to sell their home.

3. Formulate a strategy.

You have removed yourself from the equation, and you have figured out what your client is really aiming for. Nice work!

Now, it’s time to figure out where you want to end up so you can determine where to begin.

You’ll need to figure out how aggressive your game plan is going to be. Knowing that people get anchored to a price, you definitely want to use that to your advantage. If you’re representing a seller, you want to get the buyer anchored to paying a higher price, and if you’re representing a buyer, you’ll want the opposite.

At the same time, you need to balance that with making sure you don’t do anything that causes the other party to walk away.

In the current marketplace, sellers obviously have the upper hand, so they’ll want to sell at the highest price point. On the flipside, buyers need to know that they are almost certainly going to pay more than they’d like to—and that they should do their best to avoid a multiple-offer situation. 

Talk to your clients and make sure they feel understood. You’re not trying to convince or persuade them—you’re just trying to hear them out. Once you’ve used enough Labels and Mirrors to uncover what’s hidden beneath the surface, summarize their situation as completely as you can to hear these two magic words: that’s right.

At this point, you will have achieved trust-based influence, and the deal will be much easier to make. 

4. Execute your strategy.

Once you’ve developed your strategy and got buy-in from your client, you need to execute your strategy.

The most effective agents are aware of all of the potential outcomes and let their clients know exactly what they can expect. 

To illustrate: In today’s market, you can’t depend on making a great offer and receiving a counter, so you need to walk buyers through these scenarios to ensure they aren’t blindsided by silence.

Never split the difference!

There is a reason Chris’ book is called Never Split the Difference—meeting in the middle is the lazy way of negotiating. Although it may be the easiest way to make sure you get paid, it’s proof that you’re not negotiating on your client’s behalf.

Now that you have a better idea of how to succeed in real estate negotiations, it’s time to learn more about what you can do to close more each month. Check out our free e-book, Real Estate Negotiation Skills: 3 Essential Tips for Closing More Deals, to continue your learning.

Real Estate Negotiation Skills Ebook

Steve Shull

About The Author

Steve has been coaching real estate agents full-time since 1993. From 1991 thru 1993 Steve sold residential real estate in the Fullerton, CA. area. In his first year with his partner, they closed 53 transactions. In Steve's second year, they were on pace to sell 100 homes when he came up with the idea to create a coaching program that marked the beginning of his real estate coaching career in 1993. In 2007, Steve was one of the founding partners of Teles Properties. He helped the company open four offices in Beverly Hills, Brentwood, Newport Beach, and Pasadena before leaving in 2012. Steve has coached hundreds of agents to help them shorten their sales cycle, make more appointments and close more contracts.