What agents can learn from lawyers on the art of negotiation

Negotiate like an attorney with these 3 tips

As a former lawyer myself, I can say with certainty that legal professionals apply several negotiation tactics and techniques that I believe agents can benefit from.

Negotiation plays a central role in every legal practice, just as it does in luxury real estate. But while many agents develop negotiation skills on the job, lawyers learn the art of winning debates while they’re still in training.

That doesn’t mean lawyers are better negotiators—many of the most strategic and diplomatic deal makers I’ve met have worked in real estate. But as a former lawyer myself, I can say with certainty that legal professionals apply several negotiation tactics and techniques that I believe agents can benefit from.

Taking a page from the legal textbook

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Let’s start by looking at some of the common negotiation challenges that agents face, and how they can be solved by approaching them from a lawyer’s perspective.

1. Stick to the truth and nothing but the truth

Real estate agents typically strive to share accurate information with clients, but they simply aren’t held to the same rigorous standards as lawyers when it comes to disclosure. In a courtroom, any statement that can’t be supported by evidence or expert testimony will be questioned. In real estate negotiations, sweeping generalizations can be tempting to agents looking to fill in any gaps.

While this kind of guesswork may seem minor, it can have implications later on—for instance, your sellers having to settle for a lower price, or buyers deciding not to close, because of problems that are more significant than they were initially led to believe. Agents have an impulse to shield clients from anything negative and to downplay problems. But I’ve found it’s best to disclose everything you can, as long as you’re not in breach of your fiduciary duties.

2. Keep accurate records

On a similar note, your clients and negotiation partners will hold you to your word. I encourage all real estate professionals to emulate lawyers and get in the habit of taking notes—especially of what was covered and agreed to in informal conversations. This allows you to build your knowledge and refer back to your records as your deal progresses.

3. Talk clients through the legal implications

Lawyers always take time to sit down with their clients and brief them on the likely scenarios they could encounter in the legal process, and the implications of each. Agents should practice this as well, priming their clients for every eventuality.

This is especially true with first-time homebuyers. Many of them have limited experience with real estate markets and aren’t adequately prepared for the situations they find themselves in—for example, they may not even realize that the offer they’re submitting constitutes a legally binding document.

The lawyerly characteristics agents can cultivate

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Having practiced both law and real estate, here are three of the skills and traits that the best negotiators always possess:

  • They are detail-oriented, organized, and highly meticulous in their planning and preparation.
  • They have an extremely high level of self-belief and show confidence in every conversation.
  • They always listen with the intent to understand, rather than focusing on their own response.

That final point is extremely relevant in real estate since emotional intelligence is so imperative. In this line of work, clients are facing life-changing choices, and, in a market as fast-moving as today’s, those choices are sometimes made under immense strain. Understanding where your client is coming from and assisting them with compassion, patience, and empathy, will determine whether or not they have a positive experience with you—and whether they’ll use you again or recommend your services in the future.

Advice for improving negotiation skills

Overall, the likelihood of a client bringing you repeat business or sending referrals is determined by two factors: how well you have negotiated on their behalf, and how well you have treated them. These factors will also make or break your reputation with your fellow agents.

In order to improve both your negotiation skills and the emotional intelligence that supports them, here are a few resources that I recommend, and have personally benefited from:

  • Never Split the Difference: Negotiating As If Your Life Depended On It by Chris Voss and Tahl Raz. Their insights on tactical empathy resonated with me—I’ve even been practicing with my kids.
  • The Ninja Selling training system, and the book Ninja Selling: Subtle Skills. Big Results by Larry Kendall. Its philosophy emphasizes the need to listen to understand.

In general, negotiation is always about gathering as much information as possible, and then carefully crafting the best outcome for your client based on that information. You do that by being conscientious, courteous, and committed to truth.


 

Troy McLean

Troy joined Sotheby’s International Realty Canada, Brokerage in August 2017, bringing with him over 20 years of Canadian and international industry experience, including 10 specialized years serving high-net-worth individuals, families, and entrepreneurs. Troy is an accomplished professional. He started his career as a lawyer, before transitioning to financial services, where he held progressively senior relationship roles in wealth management at RBC Wealth Management and TD Wealth Management. Troy’s career in the real estate sector began in 2012 through his involvement in new home construction, working as a licensed mortgage agent to help finance the building of communities across Canada. Troy’s knowledge and skills derived from his unique professional background, bolstered by his passion for helping people is well matched to meet the needs of the most discerning client when it comes to advising on what is often the single most important asset for most people, their home.