David Harts, a real estate agent in California (USA), is passionate about the negotiation process: “*The truth is that proper negotiation is much more than simply the price on a home or the offer to purchase. Negotiation, in real estate, really is an art.”*
But he’s adamant that this art can be learned. Here are his thoughts …
Never take an adversarial or even aggressive posture in any of your interactions with other agents, buyers or sellers. Actually, just the opposite. You must be easy to get along with and easy to talk to. But never forget that you are there for one reason: to solve your real estate needs. This means that while you are negotiating the deal, every piece of information that you provide to “the other side” should be carefully released at just the right time, spoken in just the right way and designed to improve your position in the transaction.
Experience has shown that the art of negotiation is not just a simple isolated exchange, but rather a continuing effort. You must remember every action that you take during the entire transaction is part of this negotiation. Don’t give up your position too early, don’t make unnecessary concessions, and don’t compromise without gain.
A good buyers’ agent will coach his clients about the best ways to position themselves and their offers to increase the likelihood of the sellers’ acceptance. This is true even in a strong buyer’s market; because if you want to pay the lowest price for piece of property, you then have to be sure that all the other components to your offer, other than price, are as attractive as possible.
It’s not always all about price
Generally speaking, there are a lot of real estate agents out there who have poor negotiating skills. While it might not have crossed the listing agent’s mind to ask their client, I really do want to understand exactly what is most important to the seller.
More often than not, at this point in the game, pricing is not the “number one most important item”. But, even if pricing is #1, what other things are on this list of importance? What is item #2, or #3? I want to know what these needs are so I can help my buyer-client structure their offer to answer these needs if the initial offer is rejected. Believe me, I have seen the craziest items hold high importance to people and you often don’t know what they are until you ask.
Pride is a big deal
There is an art to creating an offer to buy a home at the best price. Most people understand that if you walk up to a person selling their home and say to them, “I think you are stupid and I want to buy your home so here is my offer” the chances that the seller will actually look at your offer is pretty low. This is because you have put the seller into a compromised position. You have forced the seller’s sense of pride to over-rule their desire to sell the home. Once you have put the seller in this position, it is difficult to correct it. I have seen very few buyers able to correct the mistake of insulting the seller. Pride is a really big deal.
So, most people understand the obvious concept, but people often don’t realize how many different ways that you can put either a seller or buyer into this defensive position. I have seen buyers take the approach of including a defect-list in their offer, which highlights every undesirable feature in the property. They do this sometimes to support a low offer. Either way, this is the same thing as saying, “Your house sucks and here is why”. The seller is insulted and either discards the offer, or counters at a higher price than they might have if they were not insulted. It is a counterproductive negotiation technique.