While most agents concentrate primarily on lead generation, your negotiation skills determine how often those leads turn to dollars in your pocket. When it comes to negotiation, which approaches work best? Is it the hard close, collaboration or gentle persuasion?
- The most effective closers rely on collaboration and persuasion.
Would you like to convert more listing appointments into signed listings and more offer negotiations into closed transactions? While most agents concentrate primarily on lead generation, your negotiation skills determine how often those leads turn to dollars in your pocket.
When it comes to negotiation, which approaches work best? Is it the hard close, collaboration or gentle persuasion?
If you’re ready to unleash your negotiation power, here’s how to do it.
1. Begin where you agree
A tried and true negotiation strategy is to begin where you agree.
For example, if you are representing a seller who receives a ridiculously low offer, persuade your sellers to make a counteroffer, even if it’s full price. In my experience, about 50 percent of the time they end up closing the deal.
2. Fast-talking salesperson — to be or not to be?
The “fast-talking salesperson” is a pejorative term that suggests the salesperson will use a quick rate of speech as a way of inhibiting client objections. A study done back in the 1990s suggests that there may be some truth to this notion.
It says that if you are presenting information where your clients might object, it does pay to speak faster so your clients have less time to formulate objections.
On the other hand, it also recommends that you slow down when you are presenting information or an opinion where they agree with you.
3. Create a winning closing environment
While hard closes and manipulative strategies work, the most effective closers rely on collaboration and persuasion instead.
The reason is that manipulative closes often leave your clients feeling that you won and they lost.
To create a collaborative closing environment, ask questions and be a conduit of information.
For example, when you go on a listing appointment, instead of telling sellers where to price their property, show them the MLS comparable sales and then ask, “Where would you like to position your property in the marketplace?”
If the sellers come back with an unrealistic asking price, Robin Dreeke, the former head of the FBI’s Behavioral Analysis Program and the author of It’s Not All About “Me:” The Top Ten Techniques for Building Quick Rapport with Anyone, suggests that you avoid telling them that they are wrong.
Dreeke explains why using this approach is so important: “When people hear something that goes against their confirmatory biases or contradicts their beliefs, two things happen: First, the logical part of the brain shuts down and second, the brain prepares to fight.”
Instead, Dreeke suggests that when you encounter this type of situation that you ask a question that allows them to explain their reasoning.
Consequently, you could ask: “Please help me understand how you arrived at that price.” If they respond by saying, “This is what Zillow says my property is worth,” you now know the basis on the objection and you can counter it.
4. Switch up, don’t give up
At this point, you can apply what Jia Jiang, the author of Rejection Proof, calls the “switch up, don’t give up” approach.
Jiang says, “Before deciding to quit or not to quit, step back and make the request to a different person, in a different environment, or under a different circumstance.”
By asking about the sellers’ thinking, you have identified the specific circumstance that is causing the objection and can now make a different request that will allow you to meet the objection.
5. Seldom right, never in doubt — cockiness beats expertise
A study at Carnegie Mellon University shows that “humans prefer advice from a confident source, even to the point that we are willing to forgive a poor track record.”
So, what does it take to feel confident about your pricing? While cockiness/confidence may seem important, accuracy is what matters most. Consequently, make sure that you are adequately prepared for the most common objections that you will receive.
In the case of the Zillow objection, two of the most powerful ways to be prepared are with the valuations from Inman Market Intel and HouseCanary.com, both of which are artificial intelligence tools that evaluate thousands of factors, not just MLS and public records data.
If you don’t want to spring for the paid tools, some older tools such as Corelogic’s EpropertyWatch.com, the Chase Home Value Estimator, Homesnap and MoveUp.com are all free.
In either case to close ask, “Did you know that there are several other automated valuation tools, that like Zillow, are used by major companies and banks to set prices and to even set values on Wall Street hedge funds? Before you make a final decision about your price, let’s look at what these other tools say — is that a strategy that works for you?
By inviting them to collaborate, you are side-stepping their objection without making them wrong.
By the way, if you’re using the Inman Market Intel tool, you can factor in the Zillow Zestimate and any appraisals as well. By factoring their data into the algorithm, you now have a truly collaborative CMA that will help your sellers be more realistic about their price.
6. The most important phase in negotiation
No matter what you are negotiating, always remember that your role is to be a conduit of information, not the decision maker.
Thus, the most important negotiation close is, “It’s your choice; what would you like to do?” This simple sentence defuses virtually all conflict. If your clients are totally unrealistic, you can always walk away.
Jiang sums up wisdom of collaborating rather than arguing with your clients. As he explains, “Arguments are a magnet for rejection” because “arguing turns potential collaborators into enemies.”
To shift this pattern, always make it clear that your clients have the freedom to say, “No.” Then look for a way to collaborate by identifying where you agree.
To unleash your negotiation power, be confident, well-prepared and collaborate with your clients to arrive at the best possible decision. While you may not get exactly what you want, you’ll have happier clients and most likely a commission check in your pocket as well.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles and two best-selling real estate books. Learn about her training programs at www.RealEstateCoach.com/