Educate Clients About the Value of Negotiation
Negotiation skills are one of the best value-adding reasons to hire a Realtor. You know that if you’ve ever handled negotiations for a client. In fact, many Realtors hire fellow Realtors to list and sell their homes, instead of doing it themselves. Why? Because that puts them in a better position to negotiate instead of trying to negotiate directly. But clients usually don’t realize how valuable it is to have a skillful, experienced, knowledgeable negotiator on their side. Most consumers don’t even think about real estate agents as negotiators. They mainly view them as people who just know a lot about real estate. That’s why they frequently complain that Realtors charge commissions that are too high. They say you didn’t earn it because all you did was answer your phone when a buyer called to make an offer. You have to help clients comprehend just how complex negotiating can be and how much it is worth to them.
Negotiation Is Not About Winning
Begin by debunking the misconception that negotiations are a win-lose proposition. When professional athletes play a game, it’s not a negotiation because there is a clear winner and a loser. But when they talk to team owners about their salary package, it’s all about give and take. That’s a negotiation. The word negotiation has always meant a discussion based on compromise. If there is no compromise, you aren’t negotiating. Why this matters – and why you have to explain it to clients – is that if they do not understand the meaning of negotiations they will expect you to ensure a 100% win. Sometimes they get everything they want. But most of the time both parties give up something and also get something they want in return. Unless your client fully grasps this idea you are setting yourself up for problems. Why? If they don’t get absolutely everything on their wish list they may perceive you as a lousy negotiator who didn’t earn your commission. Educate your seller long before any negotiations with buyers begin, and you will be setting yourself up for success, not criticism.
Identify Deal Breakers
From the moment you start talking to a seller about listing their home, you need to clarify their “line in the sand.” You already know that there will likely be points that buyer and seller disagree about, so don’t wait until they disagree to define a deal breaker. By then they will probably be too emotionally triggered to step back and see the big picture. They’ll dig in their heels. Too many times a perfectly good sale goes down the tubes because the buyer and seller get too focused on some trivial point of disagreement. It’s fine to disagree. But it’s silly to lose a sale over a petty disagreement. In that case you are cutting off your nose to spite your face.
Get it in Writing in Advance
Avoid all that by getting your client to say exactly what constitutes a deal breaker. Specify these deal breakers as soon as they sign a listing agreement. Maybe it’s a specific price point that’s too low. Perhaps they refuse to do any major repairs. Or they may say that if the buyer insists on a closing date that is too far into the future, it’s a deal breaker. Don’t just discuss these deal breaking criteria with your seller. Get it in writing. Give the seller a copy and keep your own copy. Then when you are in the middle of a heated negotiation you can remind them of the line in the sand, with proof in hand. They agreed it would be okay to sell as long as the buyer did not present an obstacle that was a total deal breaker. Now they have that opportunity, and they should seize it. That’s a victory for any serious, reasonable seller.
Negotiation Means Preparation
Remember the adage that “Prior planning prevents problems.” If you define your seller’s line in the sand early-on, it will save everyone lots of problems. That’s the value of crystal clear communication and judgment not clouded by mood, emotion, and a lack of vision and foresight. But to be that kind of negotiator you have to go into your negotiations fully prepared. That prep work starts when you negotiate with your seller to reach a clear understanding of what they will and will not accept when the offers start coming. Most Realtors skip that preparation and pay for it dearly while making the sales process way more stressful and frustrating than it needs to be. Plan ahead so you do not inadvertently undermine your own success.