I want to wrap up this series with one of the most important communication topics that we could ever discuss: Questions. If you want to be a great communicator and a great salesperson, you need to learn to ask great questions.
Asking great questions — and then remaining silent so that your question can do the work it was crafted to do — will open up an entirely new world to you. If you put these habits into practice, you will never look at negotiations or relationships the same way again.
Great negotiators ask great questions. Then, even more importantly, they shut up and wait for their counterpart to answer the questions. Open-ended questions that keep your counterpart talking will reveal much about their motivations and what it is going to take to get a deal done.
When it comes to real estate negotiations, everyone immediately thinks about the negotiation that takes place between buyers and sellers through their respective agents. Although this is a critical negotiation, there are much more important and frequently overlooked negotiations that take place every day — negotiations that we must win or at least win more often than we lose.
The negotiations that take place to convert a lead to a client, for example, will be much more predictive of your success in real estate than your ability to convince a listing agent that their seller should include the fridge in the deal.
Although this is about “real estate” negotiations, I would be remiss if I didn’t first point out that the most important negotiations are the ones we have with ourselves every day: When to get out of bed, to take care of your mind and spirit, whether or not to get that workout done, whether or not to control your anger and fear, how you respond to your spouse or loved ones, what to be stressed out about vs. what to let go, etc.
All of these are “negotiations,” and your ability to win them more often than you lose them is the No. 1 predictor of success in life beyond real estate sales.
Having said that here is a list of some of the most important negotiations you will face in your real estate business (this list is absolutely not exhaustive: There are many more.)
Prospecting: Negotiating with yourself
This is the most important negotiation you will ever engage in and with the most fierce counterpart: You. The first negotiation of every day is you vs you.
Are you going to get out of bed when your alarm goes off or are you going to lose that negotiation and hit the snooze button? The self-discipline to consistently win these negotiations with yourself is what makes the difference between winners and dreamers.
- Are you going to make the time for the morning quiet time, meditation, or reading that your mind and soul need or are you going to lose the negotiation vs the tyranny of the urgent?
- Are you going to make the calls you need to make today or not?
- Are you going to write the notes and finish the CMAs you promised to do?
- Are you going to be intentional about the relationships you know that you need to build today, this week, this year, and throughout your career?
Negotiating with buyer and seller leads
We focus all of our attention on representing buyers and sellers in their negotiations with each other. However, you are never going to get the opportunity to even step on that playing field unless you can negotiate for yourself to set consultation meetings and convert these leads to clients in the first place.
- How are you going to get prospects’ contact information at an open house so you can follow up?
- Are you going to be able to convince a buyer or seller to have an in-person meeting with you?
- How are you going to convince a buyer to work with you exclusively?
- How are you going to convince a seller to list their home with you instead of one of the other dozen or so agents that they know?
Negotiating with your client, the homeseller
Becoming a listing specialist takes years of study, work, branding, marketing and learning the art of negotiating. Listings are great, but active property listings do not pay your bills. Closed transactions pay your bills and put food on the table.
If the listing is not positioned correctly, prepared for sale and listed at something close to market value, your listing will never transform into the closed transaction you desire. Your seller may trust you, up to a point. You will need to be prepared to negotiate a variety of items they may be reluctant to do.
Negotiating how to prep the house
- What if the seller refuses to paint the purple bedroom or says that the buyer can “look past” the shag carpet in the master bathroom?
- How do you work with a seller who doesn’t want to remove all the personal belongings from the house?
- How do you handle the question of reduced commissions?
- Do you offer a Good/Better/Best approach and have a prix-fixe menu of services (bare minimum to full-blown marketing campaign with varying commission structures?)
Negotiating on listing price
- Data, data, data: Show them sales in the area in the last month.
- If they want to list too high, show what homes in that price range look like.
- Have a plan if you decide to list high, then reduce after a certain amount of time.
Negotiating with your client, the homebuyer
Similar to working with sellers, buyers may agree to use you as their agent but that doesn’t mean your work is done. Our industry likes to use words like “educate” or “set expectations” to describe what at times is plain old negotiations.
Many of your clients will come into the process with preconceived notions and ideas, often from a distant and mystical uncle, that will need to be set straight in order to find success in the hombuying journey.
- Loan approval: How do you deal with a buyer who wants to look at homes but is not approved?
- Discuss must-haves and locations and set them up on MLS search
- Buyer rep: What if they don’t want to commit to working with you?
- There is no such thing as the “perfect home”
- What if they want to lowball all homes they like because they heard that the market is slow and all sellers are willing to negotiate?
Negotiating with your strategic partners (service vendors like photographers, lenders, stagers, repair pros)
The service you and your clients expect is not always the service you or they receive. You need to be prepared to confront these shortcomings head-on and make sure that you have a shared understanding when it comes to communication, execution, follow-up, and standing behind completed work.
Although the best way to get a referral is to give a referral, don’t forget the critical (and often unspoken) part of that equation: You have to ask for one. Ask and you shall receive. Enter: negotiations.
- How do you ensure you get the level of service and communication you expect (timelines, delivery, communication)?
- Arrange to have them paid at closing instead of upfront, whenever possible, and encourage them to put some “skin in the game.”
- You refer them. Do they refer you? Do not waste your referrals. They are precious capital.
There are many negotiations that take place in real estate outside of the “deal” itself. Your ability to navigate these negotiations successfully will determine whether or not you get clients to work with you in the first place.
Put simply, you need to master these if you want to put yourself in the position to be able to negotiate with another agent on behalf of your buyer or seller.