Whether you’re a rookie agent, a rising team leader or an established veteran broker, we can all benefit from sharpening our skills. Follow our “Back to Basics” series to learn fundamental strategies, tactics, philosophies and more from real estate pros across the industry.
One of the best things you can do as a real estate agent to develop greater trust with clients is to boost your negotiation and sales skills. Whether you are working with a buyer or seller, you will need to learn to skillfully bring everyone to the negotiation table and help broker a deal that your client can be satisfied with at the end.
While that sounds relatively straightforward, any agent can tell you that it’s anything but easy. Sellers will want to fight for the highest price possible while most buyers will try to hold out for the lowest price they can get. It takes a skilled real estate agent to bring these separate goals together.
If you are ready to improve your negotiation and sales skills, here are five ways you can work toward boosting your techniques.
1. Collect important client information
The first thing you need to do is collect all the essential client information. Whether you are working with a buyer or a seller, your abilities as a negotiator will be improved when you are in possession of all the necessary facts.
Say you are working with a seller. You will need the seller’s contact information, an understanding of their goals, proof of ownership and a complete appraisal report on your client’s property.
2. Develop greater experience
One of the top reasons to hire a real estate agent is for their greater experience and knowledge of the housing market, but clients will also expect you to have excellent negotiation skills. And frankly, the only way to gain greater experience with negotiating good deals is to simply do it.
You can start by taking a few clients at a time. Inevitably, there will be mistakes made during the arbitration process. Instead of letting these mistakes scare you away from real estate or just ignoring them, write them down.
With the mistakes written down in front of you, consider what went wrong. Were you missing information? Did things become heated between the buyer and seller? Set up a recreation of the situation with a mentor or associate, and experiment with different techniques to help improve your response in future real estate negotiations.
3. Practice patience
Working with clients can stretch an agent’s patience. Whether it’s a disagreeable buyer couple or and argumentative seller, your patience is sure to be tried as you work with clients.
It can be especially stressful for newer agents who aren’t used to working off of commission. However, it’s important not to lose patience and rush clients during negotiations, as it can make you come off as pushy, and your clients might miss out on a better offer.
4. Utilize an escalation clause
Whether you are working with a buyer or seller, properly utilizing an escalation clause can help clients move through the negotiation process more smoothly.
According to realtor.com, an escalation clause is “a real estate contract, sometimes called an escalator, that lets a homebuyer say ‘I will pay x price for this home, but if the seller receives another offer that’s higher than mine, I’m willing to increase my offer to y price.'”
Before you recommend an escalation clause to a buying client, consider some of these factors (and check with your state laws and regulations):
- Is your housing market hot? In a hot housing market where properties can be listed and sold within the same day, it makes sense to recommend an escalation clause to your client to help them secure their desired property.
- Does the seller want to sell quick? Even in a slower market, sellers who want to move their property quickly might be willing to accept an offer quite a bit under their ideal price. With an escalation clause, you can help both parties feel satisfied with the negotiations, even if your buyer client never has to pay the high price indicated by the escalation clause.
- What can your client afford? As your client’s representative, you need to be aware of just how high of an offer they can make and advise them accordingly. If their escalation clause offer will cause them financial hardship, be sure to caution them before proceeding, as it shows alertness and awareness on your part as a negotiator.
5. Continue your education
Last, but certainly not least, you should be mindful as you continue your education as a agent. Although the continuing education requirements for broker and real estate agent licensing can vary by state, you should make a point of pursuing further education regarding negotiations and sales.
One resource for this can be found at the National Association of Realtors, which has a list of CE approved courses. As you look for continuing education courses, consider which best apply to your market and assist you in the direction of real estate work you would like to do more of as your career progresses.
By adding these techniques to your agent arsenal, you will be able to boost your sales and negotiation skills and develop a stronger reputation as a quality real estate agent.
Jackson Cooper is a writer and real estate enthusiast at Jensen and Company. Follow Jensen & Company on Twitter or Facebook.