How strong are your negotiation skills?
It seems like all of a sudden, negotiations are critical in real estate transactions again, after the pandemic rush. If you’re not working on those skills, you might be losing opportunities to close sales.
I’m going to break this down three ways so you can make sure your negotiating skills are on point.
Combat the Fear of Negotiating
Negotiations and inspections, among other things, can be really challenging and stressful.
I know I’ve had the fear of, “Hey, this deal’s going to fall apart. It’s going to go sideways. Things aren’t going to go well.”
I get it. I understand it. I’ve been through it all. So I’m going to give you three pieces of advice that will help you better negotiate on your client’s behalf and better manage the process so you’re not stressed out about deals going sideways.
Because that worrying distracts you from what’s most important, which is—
- Finding new people to meet with
- Scheduling appointments
- Earning new business
#1: Use the 1-3-1 format
The first thing to adopt in your negotiation strategy is the 1-3-1 format.
The first 1 is when you reach a roadblock in the transaction and encounter an issue. It’s critically important to clarify what that issue is.
Then there typically are going to be 3 options for your clients:
- They can walk away from the deal
- They can accept the problem as is
- They can come up with a solution in the middle.
That’s typically what the options are. And then the last 1 in the 1-3-1 is your recommendation to them.
So, when you give people options, it takes all the pressure out of it. Instead of saying, “You have to do this, you have to do that” (which is not good advice), giving people options allows them to think through what’s best for them.
That’s ultimately going to be what’s best for you as their agent as well, because you want them to make a really good decision, whether or not it’s buying the house.
Remember, we’re in this for the long game. And that means guiding your clients through decisions that are best for them, to earn their trust, which is essential to earning their repeat and referral business.
So, the 1-3-1 mindset is critical for any negotiation.
#2: Know all the required documents for your state
The second way you can improve your negotiation skills is to know all the contracts and all the options that are allowed in your state.
If you can’t clearly explain the contract, its different outcomes, and the options for buyers and sellers, you’re doing yourself and your client a disservice.
Because then you’re running to figure this stuff out as it happens, and it inhibits you from giving your clients their options.
So, if you don’t already know the contracts, read through them more than once. It’s your job as an agent to know what every single document says and what it means to the consumer.
How can you give someone sound advice if you don’t even know what the documents are? That’s a question you’ve got to ask yourself.
#3: Let it play out
Number three, let it play out and let it breathe. These contracts have deadlines. There are no emergencies in real estate except when the house burns down (and I’m not a firefighter).
There will be time deadlines when we have time to deal with things. When you let things play out and let them breathe, people can calm down. They have space to get their emotions back in check, and they can make logical decisions.
Most people don’t make logical decisions. When they have an emotional reaction to something or feel rushed, they’ll find it harder to think clearly.
Try this instead: Call them, let them know what their options are, and then give them time to think about and discuss those options with others before you reconnect with them later.
“Hey, why don’t you take a couple of hours to think about it? Let’s regroup at five tonight. I’ll give you a call then.”
Here’s an example: I was recently on a call with a seller. And guess what came up: the NAR commission lawsuit. “Should I be paying a buyer agent?”
We went through his options, and now he’s talking with his wife and he’s going to be getting back to us. There wasn’t any stress there.
We said—
“We want to give you as much guidance as possible. Here are the reasons why this could make sense. We’re going to do whatever you want—it’s your call here—and we’re going to give you advice because that’s what you’re looking for.”
And his response was, “That’s exactly what I want. I want you to be straight with me so I can make good, sound financial decisions around real estate.”
So, when you take this three-pronged approach—your 1-3-1, providing at least three options to people, knowing all the documents frontwards and backward, and letting it breathe—that’s going to help you navigate these negotiations a lot more clearly and concisely in a way that doesn’t stress you out.
It’s not going to stress the client out, either. You’re keeping everyone calm, so you can move ahead in whatever direction they choose.
