September means Back to Basics here at Inman. As real estate navigates the post-settlement era with new commission rules, real estate professionals from across the country will share what’s working for them, how they’ve evolved their systems and tools, and where they’re investing personally.
With the National Association of Realtor’s new commission rules, negotiation has never been a more critical skill for agents to master.
Sadly, very few agents have strong negotiation skills, especially in face-to-face offer situations. The good news is the most powerful negotiation strategies rely on asking questions and waiting for your clients’ feedback about what to do.
Here are 10 proven strategies that work for you when you’re negotiating offers face-to-face in person or on Zoom, regardless of whether you represent the buyer or the seller.
Establishing a win-win negotiation environment
1. Don’t be attached to the outcome
This attitude is the foundation of all successful negotiators who are focused on providing the best possible representation for their clients. This can be extremely difficult, but in the long run, this approach allows you to be more objective while also being a powerful way to build connections and establish trust.
2. Win-win negotiations begin with negotiating your buyer or listing agreement
Rather than playing the win-lose game where the focus is on who gets the best deal with the most concessions, use the win-win strategy based on asking questions, listening carefully for what matters most for your clients, and always letting them make the decision about what’s best for their situation.
3. The most important closing question you can ask when negotiating
Virtually every script and closing strategy I have trained over my 40-plus years in the business ends with this question, “It’s your choice. What would you like to do?” This collaborative approach is a powerful way to conduct win-win negotiations and stay focused on what matters most to your clients.
By the way, if you have the urge to insert your opinions or tell your clients what to do, just remember, “It’s their house, it’s their mortgage, and it’s their decision.”
4. Shut up and sell — let silence do the heavy lifting
One of the oldest and most successful strategies is to present your offer or the terms you want to negotiate, and then sit quietly until the other party responds. Most Americans are uncomfortable with silence and feel compelled to say something. In contrast, people from many other cultures often use silence to get what they want.
As the old adage goes, “The first one who speaks loses.”
Proven strategies for the give-and-take during a negotiation
5. Coping with the negotiator who constantly grinds you and your client for more
Some negotiators constantly try to get as many concessions as possible. To break this pattern, when you make a concession ask, “If we do that for you, what are you willing to do for us?”
Allowing the other party to decide what they’re willing to do in exchange for your concession, don’t be surprised if you get a much larger concession or something you hadn’t considered before that would benefit your client.
6. How to break an impasse during a negotiation
This approach is sometimes called “reciprocity.” In reciprocity, you give something first to get something back. This is especially effective when you hit a roadblock during the negotiation.
For example, if the sellers have backed off from negotiating with your buyer, you may be able to restart the negotiation by making a new concession such as, “We could move up the closing date,” however, follow up by asking, “Is there something you could give us in exchange?”
7. ‘Flinch and vise’
I love this strategy from Tim Burrell’s classic book on negotiation called Create a Great Deal. Here’s how it works.
When your buyer wants to make a ridiculously low offer, grimace (that’s called the “flinch”). After you grimace, respond by saying, “You’ll have to do better than that” (that’s the “vise.”) This approach often causes the buyer to raise the offer. If not, you have uncovered that this may be the best the buyer can do or that they may not be serious buyers.
8. The decoy
This is another great strategy from Burrell that really works. The “decoy” is an item your clients include in the listing or offer that they are willing to concede. Here’s Burrell’s example: If the sellers want to close after school is out, the buyers could ask to close before school is out. When the sellers make a counteroffer pushing the closing date back to the end of the school year, they will feel as if they have gained a major concession. You can then ask for a concession in exchange for the later closing date.
9. ‘No’ is often the start of the negotiation rather than the end of it
This is especially true if you’re dealing with someone who is from another culture where haggling over price is the norm. Burrell gave two additional examples that illustrate the reasoning behind this approach.
“This is particularly true for bureaucracies including the government, banks, major builders and insurance companies,” Burrell said. “If you accept the first ‘no,’ they don’t have to do any additional work.”
Burrell said the same thing is true for home warranty insurance. If they can tell you, “No, it’s not covered,” and you go away, their problem is over. Be persistent.
10. Keep your body language and tone of voice in ‘charge neutral’
This approach is especially important when you receive an offer that is better than anyone expected, as well as when you’re angry and feel like yelling at the other agent and/or their client.
“Charge neutral” is the soft, non-confrontational voice you might use to comfort a small child or friend who is experiencing a difficult situation. Charge neutral also involves keeping your body still and your tone of voice calm.
To illustrate how this works, the next time you receive an offer that is way better than anyone anticipated, avoid doing the happy dance. That could cause the other client to believe that they made a mistake.
Instead, question some of the terms. Suggest that you might have to stretch to accept their proposal. Alternatively, ask them to provide a small concession to get your clients to accept their offer or counteroffer. That way, the other party will feel that they did everything right rather than feeling that they gave too much away.
Becoming a master negotiator means focusing on your client’s needs through active listening, asking thoughtful questions, and allowing silence to work in your favor. The key to success is fostering a win-win environment where both sides feel heard and valued, ultimately securing the best possible outcome for your client by strategically using concessions.
Bernice Ross, president and CEO of BrokerageUP and RealEstateCoach.com, and the founder of RealEstateWealthForWomen.com is a national speaker, author and trainer with over 1,500 published articles.
