Need sharper negotiating skills?
Thinking about a real estate transaction, you negotiate with every party involved, right? Whether it’s for a cut in your fees (no!), time to close, a reduction in sales price or agreement on communication terms, it’s all a negotiation.
Why the discomfort?
It’s a mindset. And, it’s also cultural. To some, negotiating may seem rude. To others, when faced in a negotiation, it feels like one party wins, while the other looses.
Here are three strategies and four tips that will help you improve your negotiation skills and drive more bottom line revenue.
The Cringe
An effective tactic, the cringe is used to make the other party uncomfortable. The less experienced negotiator will either offer a big concession or will attempt to rationalize what’s been offered/requested.
The Stance
As a rule, people often ask for more than they expect to get. Be steadfast. Don’t back down what you offer/counter offer.
The Inquisitor
While you don’t want to present yourself as harsh, severe or hostile, the more information you have on the other person’s situation, the better. Ask questions to discover what’s really important to them.
For example, if you’re in a listing presentation, you may ask:
- “Why are you considering selling?”
- “Which other agents will you be speaking to/have you spoken with?”
- “Is there a deadline or timeline driving this?”
It is also important to know as much about the agents with whom you compete. It could help you overcome using that agent as leverage.
Tip #1: Recognize Style
We each have our own communication style. The same holds true in negotiating. To be effective, you need to understand the negotiation style to that of the person on the other side of the table.
Who are you? Dominant decision maker? Influencer? Both are extroverted. While task oriented and those adverse to change adverse are more introverted.
Why is this important?
- A dominant negotiator must practice patience with the less extroverted.
- An influencer is not terribly detail oriented.
- Task oriented types need facts in negotiations.
- Change adverse folks need to understand why.
Tip #2: Practice
In real life – practice. Get in the habit of asking for discounts.
- “What’s the best you can do on this?”
- “That seems expensive.” (shhh, wait for them to respond to gauge an opportunity to negotiate)
- “What discounts are you offering today?”
- Don’t forget the Cringe!
Tip 3: Be Willing to Walk
It’s not easy to do this, when every transaction is so important. But somehow it gives you a confidence that will provide quite a bit of leverage in the negotiation process.
Tip #4: Listen
Listen with the goal of understanding, rather than to prepare a reply. And, make it a point to not only hear the words spoken, but observe the tone of voice, inflection and watch body language.
Photo Credit: © Andrew Cooper.
Ken Brand
December 30, 2009 at 8:54 am
Wooo-Weeee, this is GREAT advice. I’m especially interested in how we/my friends/I, respond questions/requests to reduce our fees.
Here’s the thing, everyone….yes, everyone wants to pay less and get more, it’s American. Intellectually we all know, if the question to cut/reduce/discount isn’t asked out-loud, it’s asked quietly, inside their head.
You have some great tips here. If we know what people are thinking and the question is inevitable, why do we cringe, cross our arms, lean back, stutter, stammer and spit some lame excuse, like “you get what you pay for, blah, blah, I suck, etc.”.
We know it’s coming, we know it’s thought, like you share in Tip #2 & #4. Not only should we be hyper tuned into what and how they are saying what they are saying, we should know exactly how we’re going to respond, what we’re going to say, the tone we’ll use, the words we’ll use, the body language we’ll use, etc. When we aren’t prepared, while our clients are expressing their concerns, our head reels with how we are going to answer/avoid their question, instead of listening and observing.
I know everyone pukes at the thought of “scripts”. I’m not saying you should have script, but the greatest communicators of all time began with a written script/speech/talking points, etc. They don’t memorize their speech word for word (usually), but the process prepares them to say what they want to say, in the way they want to say it, with confidence. Some same, “persuasion is a transfer of confidence”, I agree with that.
More opportunities are lost over flubbing the discount question than anything else, except maybe a mealy-mouthed, tyro conversation about pricing.
Awesome advice, mastering this alone will improve our 2010 profits, without spending a penny, just speak professionally and confidently.
PS. It goes without saying that is what we charge is high and what we provide is ordinary, common or just as crappy as the next person, well, we don’t deserve the business.
Happy New Year Brandi, thanks.
Brandie Young
December 30, 2009 at 12:45 pm
Ken,
Thank you SO much for putting a smile on my face so many times this year, especially when we met at Inman.
I’m a fan of scripts. I believe a well thought-out response to a “touchy” question will result in a confident delivery. And, your clients want confidence, right? Plus, you can have two or three responses to the same question to match the personality of your client.
I hope we get some feedback here on the fee reduction question (read: CROWD SOURCE).
We get the fee reduction question, too. My partner and I have different ways of speaking to it. I’m the blunt one (shocking, right?) that begins the sentence with one word “no”. Then I address what I believe to be their concern – value – without justifying or apologizing. It might sound something like this:
“No, we can’t. I understand that budget is tight and you need to make every dime count when making decisions that have such an important impact on your business. We’re in the same boat. That said, I know it’s very important that you (fill in the blanks based on discovery – i.e. build a brand that resonates in the marketplace, etc.) which is what led you to us in the first place.”
Anyway … Happy New Year!
Troy Roark (ILRealEstate on Twitter)
December 30, 2009 at 2:53 pm
Well done. I needed this today. Thank you.
Brandie Young
December 30, 2009 at 2:54 pm
Thanks, Troy! You made my day! Good luck!