To continue the tips from my last post, here are more tips for successful negotiating:
7. Don’t let your opinion get in the way – I touched on this a little above. There is no place in negotiations for your ego, so realize that your opinion is only your opinion. There’s no need to defend your listing price, or protect a client from potentially paying too much. Too many agents get in the way of negotiations without actually letting the client decide what they want. I know, you think you’re a great agent, and you priced the home so well. And did you consider that maybe the seller was willing to come down lower than they told you, or really needs to sell now more than ever and will take that deal? Who are you to stand in their way? All you can do is give your client the data and let them decide what they want to do for themselves.
This also goes for when the client asks, “What would you do?” If you fall into the trap of answering that question, as many agents do (it’s tough to resist when someone asks you for your “expertise”), please, please, please, try not to answer that question. Instead ask them what they want to do. Many times that answer is the key to the deal.
“Scott, what would you do?”
“That’s a good question, Mr. Seller, what were you thinking of doing?”
“Well, we figured we’d come down $10,000 and see what happens.”
“Great idea, I’ll call the other agent.”
It’s that simple. But what if they press you for an answer. At that point, I would do everything I could to make sure they know you’re not TELLING them what to do. “Look, it’s not my money, so I really can’t tell you what to do. If it were me, I’d probably want to counter 2-3% to show them I’m willing to negotiate, and that I want to sell. But that’s completely up to you. Do you want to go that route?”
8. Get rid of the drama – Many agents will stir up drama during negotiations for many reasons. One reason is that they’re just drama kings or queens; everything is dramatic. Another reason is they’re really attached to the outcome and it shows through. Many agents will look to throw the other agent and/or client under the bus, unnecessarily, so they create drama as a justification for their commission, in a “see how hard I’m working for you?” kind of way.
Get rid of it all. It’s a waste of time and energy, it causes stress, and it doesn’t help the negotiation one bit.
9. Find motivation – Often times money and motivation get in the way of each other. A buyer may need to move quickly, may have found they house they really want, yet decides at the most inopportune moment that “I’m not going to overpay for this house!”
Overpaying for the house is usually a vague term that really has no meaning. If pressed, most times, a buyer doesn’t really know what the amount is that would have them overpay, or not. They might have a number in mind they won’t go beyond, but that may not be the same. Besides, if they tell you they won’t spend more than $250,000, you’d really have to question if you have a motivated client (or a real client at all) if they won’t take the seller’s counter of $251,500.
However, if you know the motivation of your client, you can then bring that to the forefront when negotiating. You can remind them of their stated motivation, and how what they’re now doing goes against it. “Mr. Seller, I understand you don’t want to counter, yet you need to move by July, and this is the only offer we’ve had in the 75 days you’ve been on the market. Are you okay with this buyer walking away? Can you afford to wait another 75 days to find another buyer?”
10. Ask questions – If you go back and look at the dialogue examples in these tips, you’ll notice that the agent in the examples is always asking questions. “Do you think you can get your buyers to come up a little more?” ” What were you thinking of doing?” “Do you want to go that route?” All questions. Selling is always about asking great questions, it’s not about telling. That’s true in negotiations more than any other time. No one likes to be told what to do, more so when it’s their money on the line. Your first inclination should always be to ask a question.
11. Understand the scope – To you, this is just numbers on a contract. To the client this is a lot of money, and/or their home. The average agent sells 3-4 homes a year, your clients might buy/sell 3 or 4 times in their adult lives. You do this kind of thing daily, for a living. Don’t just roll over the numbers and issues as if it doesn’t matter. Give this stuff the respect it deserves in your client’s minds. They have a lot on their plates, and are thinking about many different things and how it all affects them and their family. So when you can’t understand why they won’t just come down $1,000 bucks, think about being in their position. Usually it’ll all come around when you treat the issue and the client with they deserve.
12. Don’t let your commission become part of the deal – This is the worst thing I can think of, and the quickest negotiating tactic that most agents seem to posses. Your commission is NOT a part of the deal. Resist the urge to give it up in the middle of negotiations because you need the deal to go through. That’s not being a good negotiator, that’s being a doormat with no sense of self worth. You work hard for your money. The buyer saw the list price, and you’ve schooled them on the averaged list to sale ratio in the market. So why all of the sudden do they get close to a deal, and get some of your commission to make it work? Same thing with the seller. You’ve already negotiated your commission on the listing agreement (hopefully it’s full!!!!), so why do they think they can re-open those negotiations when you’ve brought them a ready, willing and able buyer? Besides, they get 94% of the sales price, you get 3% before your split.
Be strong, and get the other agent to be strong too. If you are asked to cut your commission to make the deal happen, simply let the parties know your commission is NOT a part of the deal. Tell them to focus on the deal, the house, the other party when negotiating.
Motivated people might hem and haw, but will eventually do the deal. Unmotivated people aren’t worthy of being your clients, and will possibly even be those people who end up walking away from the deal anyway. Those that stay might end up being those mean clients, who get mad at you and you can’t call anymore. At the very least, it’s a horrible precedent to set for them in the future and any other referrals down the line, because you know they’ll expect, and tell everyone else to expect you to cut your commission in the future.
If you’d like to learn more, visit www.yourethedifference.com, or call us for a free, no-obligation coaching call at 609-601-1296