5 Real Estate Negotiation Tips to Help You Win Your Next Bid
In today’s market, it can feel like every offer you submit is going to be part of a bidding war; as a real estate agent, you need your negotiation skills to be on point. With that in mind, we have five real estate negotiation tips to help make sure that you are working in your clients’ best interests. Read on below to learn more.
Use these real estate negotiation tips to help you become a better negotiator
1. Practice proven negotiating techniques.
If you want to become a better negotiator, the first thing that you have to do is practice. Like any other skill, the ability to negotiate well takes time and effort — so you’re going to want to take the time to educate yourself on proven negotiating techniques. For example, using affirmative language — or language that only uses positive phrasing even when describing negative scenarios — has been shown to assist in creating a positive outcome during negotiation.
Then, once you’ve learned about a few of these techniques, the next step is to practice. Don’t be afraid to role play a negotiation with a friend or mentor. Alternatively, you can practice what you’ll plan to say in front of a mirror. It’s only after you feel confident in what you’re about to say that you should make a call to the agent on the other side of the transaction.
2. Do your research before negotiating.
Once you feel like you have a firm command of negotiation techniques, the next step is to gather your data. If there’s one thing that’s true about any negotiation, it’s that facts and numbers can go a long way in backing up your argument. In real estate, this means taking the time to pull up comparables, look at the time on the market, and make note of any price changes that have occurred since the property was first listed.
While you may not need to explicitly reference the data in the negotiation, having it on hand will give you a better idea of the seller’s positioning and motivation. It can also serve as a good reference point in the event that the seller disagrees with a condition of your offer.
In short, the more information that you have at your disposal, the better prepared that you will be to negotiate in your client’s best interest.
3. Let the other side speak first.
Another tried-and-true rule of negotiating is that it’s best to listen before you put your cards on the table. In business, this often means letting the other side lay out the terms of their offer first. However, in real estate, this means taking the time to get a sense of the seller’s wants and needs before you put your offer together.
Typically, this step can be accomplished with a quick call to the listing agent. Simply ask the agent what is important to the seller. Ask if they are looking for a specific closing date, if they are willing to accept any contingencies, and if receiving a high sale price is their primary motivation. Additionally, you’ll also want to make note of how many other offers the listing agent has accepted so far.
Once you have that information, you’ll be much better prepared to help your clients put together an offer that is attractive to the seller.
4. Create a win-win scenerio — the key to any great real estate negotiation.
As you put together the offer, remind your clients that your goal is to create a win-win scenario for both them and the seller. While their primary motivation will be to win the bid and buy the house, they need to make an effort to make their offer attractive to the seller. For example, if the seller is looking for a particular closing date and your clients are flexible on that matter, you should do your best to convince them to make that date part of their offer.
Then, when you’re ready to submit the offer to the listing agent, don’t be afraid to highlight any features that might pique the seller’s interest. You could put a bulleted list of the strongest negotiation points in your email, for instance. In this case, anything that you can do to help your offer appear more attractive to the seller is fair game.
5. Don’t be afraid to let your clients walk away.
Lastly, when you’re negotiating, it’s important to understand that you can’t win every battle. Some sellers may be hoping for a mythical sale price that does not exist. Other sellers may only be receptive to offers that could put your client in financial jeopardy. On occasions like those, you need to remember that your fiduciary responsibility is to your client.
With that in mind, reminding them that they have the ability to walk away and find another home is often a better idea than continuing to try to win the bidding war. Of course, you can’t make the decision for them. However, it’s your job to help them remember that it exists.
The bottom line on real estate negotiation
At the end of the day, real estate negotiation is an art form. In particular, it’s one that takes patience and practice to really own. However, the more you do it, the better you will get at relaying your clients’ wants and needs in a way that sounds appealing to sellers. With that in mind, use these tips to help you get started honing your negotiation skills. With time and practice, you’ll be surprised at how easy negotiations start to feel for you.