Real Estate Negotiations: When to Push and When to Walk Away

    

In any negotiation, a push equals an assertion. 

Assertions work if they are preceded by Tactical Empathy™. Without it, you will blow the deals you should have made. 

Here’s how to gauge deals and navigate assertions in real estate.

Real Estate Negotiations: When to Push and When to Walk Away

Different Dynamics

Real estate negotiations have a different dynamic than other negotiations, as they generally include one or more parties who have conflicting levels of “desperation” contributing to the negotiation nuances.

Derek Gaunt—one of our expert coaches—says that every conversation in a real estate transaction is a tough conversation. 

So, the “Late-Night FM DJ Voice”™ is the default voice to use throughout the process, especially in the middle of bargaining when you sense you may need better terms. This is a calm, soothing voice with downward inflections. Calm is a great tool in this situation. You need to show your counterpart exactly how you want them to respond. 

Your side (or the other agent) is likely pushing you to concede as they are afraid of losing the deal (and their commission). Fear of loss is the single biggest driver of human decision-making. 

The Ackerman Rules of Bargaining (detailed nicely in Chapter 9 of Never Split the Difference) are not as applicable here because they are based on a counterpart who is less emotionally attached to the outcome. In a real estate transaction, your counterpart is (probably) a homeowner, so they are more likely to overreact after one counteroffer. (Ackerman is designed to navigate three counteroffers.)  

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Clear Your Counterpart’s Head with an Accusation Audit™ 

Use an Accusation Audit™ with your side to clear their head. State, I’ve got bad news, then pause while they gather themselves. Wait for them to signal that they are prepared to hear what you have to say. 

You’re probably going to think I’m crazy and unappreciative of your efforts and of what’s at stake for you. You’re probably going to think I am wasting your time and that I’m going to blow up this deal. How prepared are you to make a counteroffer?

Buyer’s Side

If your client didn't write and hand-deliver a letter to the seller with their first offer, now is the time to do so. In the letter, detail your vision for the house as a “home” where you wish to create cherished memories, just like the seller did with their own family.

If you live in a market where this is prohibited (check on this first, independently of what your agent has told you), make sure you reiterate this multiple times to your agent. This is the language they will need to relay to your counterparts.

Personalization always gives you an edge.

Seller’s Side 

The Accusation Audit™ with your side (agent or client) is still appropriate. 

Your counteroffer is an assertion. You are entitled to assert if you do it gently. Tactical Empathy™ is the way to do it gently, and tone of voice is the icing on the cake. Your tone will induce emotion in your counterpart, affecting their decision-making. Your choice is whether or not to take advantage of this dynamic for yourself.

How Do You Know When to Walk Away?  

Your decision occurs after you have gently pushed twice and there is no movement from the other side. The key here is going from wondering to knowing. 

Knowing always makes you smarter, even if you don’t like the answer. 

Give your counterpart a Summary™ of the situation. Wait for their response. 

Your final response before you walk away? Use a Label™: It sounds like there is nothing we can say to make this deal.

The walk-away here is legitimate, not a tactic. You are walking away with respect and empathy. The last impression is the lasting impression. If there is any chance for them to concede on any point or renew the negotiation in the future, it’s after you have left a positive last impression.

We regret we couldn’t make this deal with you. We wish you the best for the future. Please keep us in mind should you reconsider.

The Black Swan Method™ gives you your best chance of success, so give it a shot. You deserve it!

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Chris Voss

About The Author

Christopher Voss is the CEO of The Black Swan Group, a firm that solves business negotiation problems with hostage negotiation strategies. Chris founded the Black Swan Group, in 2008 upon his retirement from the FBI where he was the FBI’s lead international kidnapping negotiator. Chris is also an Adjunct Professor at the University of Southern California (USC) Marshall School of Business and Georgetown University’s McDonough School of Business where he teaches business negotiation in both M.B.A. programs.