If you want to become an expert real estate negotiator, read Never Split the Difference.
After you’ve done that, keep these five tips in mind to sharpen those skills and solidify your status as a world-class realtor who gets the best deals every time.
1. Understand how important your ability to negotiate is.
As a real estate agent, you need to realize the value of your ability to negotiate. After all, this is what people are paying you for. In any transaction, there will be 10, 20, 30, or even more negotiations—everything from figuring out when you can get into the property to whatever inclusions and exclusions are part of the deal—and you need to be ready.
Your negotiation skills will have a critical impact on your real-world outcomes, so you need to set aside time and money to invest in yourself as a negotiator. Truth be told, this is something you should be working on every day.
Your ability to negotiate is best measured by your ability to negotiate for yourself. If you cannot negotiate a full fee for yourself… how can you expect to negotiate top dollar for your clients. The idea that you can negotiate for yourself in one way (e.g., sure, I’ll lower my fee) and then negotiate more effectively for your clients is ridiculous.
The goal in real estate is not to work harder and make less. The goal is the exact opposite. By committing yourself to continuously improving your skills as a negotiator, you’ll never have to cut your fees, and you can maximize your earning potential.
2. Practice every day.
The best real estate negotiation experts practice constantly, role-playing negotiations every day. They’re aware of all of the common negotiations that are bound to pop up in most deals—negotiations about commissions, requests for repairs, closing date flexibility, contingencies, and more.
At Black Swan, we like to say that nobody ever rises to the occasion. Instead, we fall to our highest level of preparation.
When you don’t practice, you will do what’s familiar and what’s comfortable in each negotiation. And it’s unlikely that approach will be most effective.
By setting aside part of each day for role-playing exercises, you can develop your skills over time and make better deals because of it.
3. Know your ideal outcome ahead of time.
Never get involved in a real estate deal without having a desired outcome in mind. Knowing your ideal outcome ahead of time frames how you’re going to negotiate.
For example, if you’re representing a seller, you will want to anchor the other side to a high price. If you’re representing a buyer, you’ll want to anchor them to a low price.
To illustrate, imagine you’re selling a house for $700,000 and a buyer comes in with a $600,000 offer. At this point, most agents automatically meet in the middle at $650,000. In such a scenario, why not counter at $695,000 instead? It absolutely has an influence on the other side’s next move.
4. Be willing to learn from your mistakes.
When you’re just starting out as a realtor, you know nothing. The only way to learn how to negotiate effectively is by going through the motions and learning from experience.
The best real estate negotiation experts are willing to make mistakes and learn from them. In fact, many of them know they are going to make mistakes, and they’re perfectly fine with that.
If you’re new to real estate, being around people who are experienced is absolutely critical to your success. It’s hard to learn how to negotiate when you’re never around any deals.
Ready to continue your journey to becoming a real estate negotiation expert? Sign up for our online class, “Real Estate Success with Never Split the Difference.”