Think fast.
You’re working
with buyers who
are interested
in a house
that’s been on
the market two
months; most
houses in your
area are selling
in two to three
weeks.
Your buyers
really like the
house, but they
want to come in
low, figuring
the sellers must
be desperate.
What advice do
you give?
It all depends.
Factors such as
the sellers’ and
buyers’
motivation, the
condition of the
house, how you
present the
offer, and even
your reputation
will influence
whether you’ll
be able to
successfully
negotiate the
transaction.
How do you weigh
all these
factors and
ensure your
buyers get their
house? For that,
you need to
learn the three
skills possessed
by all great
negotiators:
mastering the
substance,
building trust,
and managing the
process.
Mastering the
substance
Before you start
offering advice
to the buyers,
you need to do
your research,
learning
everything there
is to know about
the deal you’re
negotiating.
That means
having a
thorough grasp
of federal,
state, and local
regulations;
financing;
closing costs;
and inspection
details. It also
means
understanding
the consequences
of interest
rates and market
conditions. And
it means
comprehending
these issues
well enough to
interpret them
for a client.
Are interest
rates heading
up? Then the
buyers may be
shooting
themselves in
the foot by
prolonging the
negotiation. Are
the buyers
beginning a
lengthy process
of looking for a
bigger house, or
are they anxious
to buy something
quickly? Are
they scaling
down or buying
up? Are the
homeowners
discretionary
sellers—in the
market only if
they can get top
dollar for what
they have—or are
they moving out
of town and
operating on a
tight deadline?
Any of these
factors can
become a
negotiating
point—and it’s
not always a
matter of
holding your
cards close to
the vest.
Knowing what
buyers
especially like
about the house
and conveying
that to the
sellers often
facilitates the
deal because
many sellers
want to sell
their home to
“someone who
will love it the
way we have.”
Building trust
Trust—the
confidence that
the other side’s
intentions and
behaviors are
what they say
they are and
what we expect
them to be—is
the most
important
outgrowth of
relationship
building. Trust
means your
clients know
you’re watching
out for their
best interest.
Trust also means
the people on
the other side
of the
transaction know
you’re bringing
them a good
offer and, if
they accept it,
the deal will go
through.
You can’t build
trust overnight.
Being patient,
commiserative,
and a friend to
your clients
eases the trauma
that sometimes
comes with the
negotiating
process. Show
that you listen
carefully to
clients’ wishes,
make the process
pleasant, and
don’t apply too
much pressure.
You’ll have an
easier time
negotiating the
deal, and you’ll
pave the way for
future
opportunities.
Satisfied
clients will
come back and
refer friends.
It’s just as
important to
build trusting
relationships
with other
salespeople.
Socializing at
broker open
houses creates
friendships.
Following up on
promises and
being true to
your word earns
respect.
Treating other
salespeople
fairly when
you’re the
listing agent
fosters similar
treatment toward
you when you’re
not the listing
agent.
Managing the
process
You’ve learned
all there is to
know about the
deal.
You’ve built
trust with all
the parties. Now
you need to
manage the
negotiating
process
itself—that is,
all the
decisions and
behaviors that
take place at
the negotiating
table.
First there’s
the strategy.
At this point,
you should be
ready to counsel
buyers on
whether their
lowball strategy
will bring a
counteroffer or
merely insult
the sellers.
Emotion control
is another form
of strategy. You
might have to
convince your
clients to
concentrate on
the ultimate
goal—the house
they want—rather
than do
something
impetuous that
might derail the
deal.
The
unpredictability
of the
negotiation
process makes
flexibility and
attentiveness
essential.
Listen carefully
to the other
side for
bargaining
clues. If the
sellers are very
particular about
the settlement
date, for
example,
agreeing to
their date might
enable the
buyers to pay a
little less. Do
the sellers want
to take the
window
treatments and
light fixtures
with them? Do
they want to be
able to rent
back from the
buyers for two
weeks?
Accommodation
often can make
an offer more
competitive.
Momentum is
important too.
This is an
emotional
process and if
it becomes too
much of a
hassle, people
can “fall out of
love” with the
house. But
there’s another
side to that
advice:
Sometimes, if
you can’t get an
agreement, it
helps to step
away for a
little
cooling-off
period.
Pay attention to
the pace the
other side is
setting.
When you get an
immediate
counteroffer—indicating
you’ve piqued
the sellers’
interest—responding
to the
counteroffer
just as quickly
demonstrates
your buyers’
seriousness.
If, on the other
hand, the
negotiation has
been going on a
while and
doesn’t seem to
be going
anywhere, you
might be able to
spur a little
anxiety on the
other side by
taking a longer
time to respond.
A deadline is a
powerful tactic,
but one that can
work for or
against you.
Ultimatums can
stir emotions
and elicit
hostile,
aggressive
responses, but
they also can
generate
action—when a
buyer is trying
to decide
between two
houses, for
example.
Negotiating can
be stressful,
even exhausting,
but it can also
be an unusually
satisfying
mental activity.
Whether you’re
negotiating a
peace treaty or
the contract for
a house,
approaching the
negotiation with
good
information,
trust, and an
understanding of
the process will
give you the
satisfaction of
having created
something of
value for both
sides.
Benoliel’s book,
Done Deal(Platinum
Press, March
2005), is based
on interviews
with 25 master
negotiators in
the fields of
business,
diplomacy,
sports, labor,
politics, and
real estate. The
author also is
director of the
Center for
Negotiation
(www.centerfornegotiation.com).
