As Jack Cotton represents real estate buyers in today’s hectic marketplace, he pays close attention to three rules of negotiation that he developed and that have been instrumental in his 47-year career.
I’ve worked in the specialized luxury market of Cape Cod for decades, but it was back in my college days that I came across the negotiation advice that would become fundamental to my real estate practice. I had the chance to study with Dr. Roger Fisher, co-author of Getting to Yes: Negotiating Agreement Without Giving In, whose advice on principled, non-adversarial negotiation has long informed my approach as a luxury agent.
As I represent real estate buyers in today’s hectic marketplace, I pay close attention to three rules of negotiation that I developed and that has been instrumental in my career:
- Build standing
- Never assume
- Detach from the outcome
Here’s how these foundations can work for you and your buyers.
The negotiation before the negotiation
I once went to a baseball game—the Red Sox were playing the Yankees—and rather than watching the batter who was at the plate, I remember studying the batter on deck. Whenever a pitch was thrown, he would practice his swing with impressive precision. It struck me that these were athletes at the highest level in their sport, and yet the need to keep rehearsing for new what-if scenarios was ever-present. They knew they could never be too prepared.
The same holds true in the world of luxury real estate. Whether you role-play with a colleague or anticipate a seller’s arguments in your own head, you need to practice actively and research extensively. The reason for this goes beyond simply “winning” and getting a good price for your buyer. Your reputation and brand precede you.
That’s why the first rule of negotiation is to build your standing. Your standing is your prominence, credibility, and stature within the industry. All luxury agents need to remember that long before you engage in a negotiation, your peers are examining your bargaining style and track record. In other words, the discussions have already begun.
There is always a why behind the why
The second rule is to never assume what your buyers want—or what the sellers want, for that matter. There’s a natural tendency to assume people will aim for the same outcomes we would in their situation—but nothing could be further from the truth.
There are always contextual circumstances that inform your clients’ decisions and desires, and these need to be taken into account. I call this the “why behind the why.” Don’t just ask them what they want; discover why they want it and what subjective factors are influencing their thinking. What will achieving this why mean to them and their family?
Let me share a recent instance of why this is so important. I was negotiating with a seller who wanted to remove my buyer’s inspection clause, and naturally, my first assumption was that they were worried we would walk away from the deal if my buyer found something they didn’t like. But instead of making assumptions about the seller’s fears and motivations, I asked them for the specific reason they wanted my client to waive the right to an inspection.
It turned out the seller wasn’t worried about the buyer walking away—they were simply dreading another round of renegotiating the price. With that information, I was able to present a simple solution: my client would be allowed to inspect, but there would be no change to the agreed-upon price. By understanding the real why and not jumping to conclusions, I was able to broker a deal that satisfied both buyer and seller.
Remove your personal stake in the sale
In Getting to Yes, one of the key pieces of advice is to focus on interests, not positions. That’s because taking a position involves drawing battle lines and putting a disproportionate emphasis on demands, emotions, and egos. Instead, it’s better to focus on interests, which include informed observations and objective facts.
Personally, my approach is often to frame my buyer’s position based on their perception of the market. Instead of saying, “This is what my buyer will pay and not a dollar more,” I say, “This what my buyer thinks is fair based on their interpretation of market data.” If you take a position, you’re stuck. If you take an interest, you’re flexible. At the end of the day, it’s all about enabling a productive conversation.
This brings me to my third and most important rule: detach from the outcome. Tensions can be exacerbated when buyers and sellers believe that their real estate agents are pressuring them to reach a deal. The best thing you can do is remove that pressure. If negotiations reach an impasse, offer to find the seller a different buyer, and offer to find the buyer a different home. Without being harsh, deprive both sides of what they want—and at the same time, demonstrate that you’re in no hurry to close. Oftentimes, you’ll be surprised at how quickly they start making concessions.
These three rules of negotiation have served me incredibly well over my 47-year career. But most importantly, they have served my clients by helping me become a better advocate on their behalf.
Jack Cotton has worked continuously in the real estate company he started in his college dorm room in 1974, accumulating decades of luxury real estate experience. Jack has been involved in nearly every record-breaking luxury residential sale on Cape Cod, Mass., over the past several years—either directly, or as coach to one of the agents involved. As of today, he still holds the current record for the largest residential real estate sale on Cape Cod. In 2005, Jack sold his company to Sotheby’s International Realty. He is back to listing and selling luxury homes on Cape Cod while sharing his extensive knowledge with agents worldwide as an author, speaker, and certified coach. Jack is an Amazon.com best-selling author. His books on real estate include Selling Luxury Homes.