Yet, negotiation is like a bad word, with negative connotations associated with the act of negotiating and the viewpoint that, in order for one side to gain, the other must lose. But, this needn’t be the case in real estate – it doesn’t have to be an adversarial battle. In fact, it’s possible for everyone to win; the seller, the buyer, and both agents in the equation.
If you are going to make it to 100 deals, you must master the art of negotiating for all of these parties to feel that they succeeded in the negotiation and resulting transaction.
However, before you even get a seat at the negotiating table for a deal, you need to convert the lead into a client. This also requires negotiation on your part, as a potential seller undoubtedly will be looking at your commission versus saving money with discount brokers.
In order to negotiate, you must present to the client the advantages of working with you to get them to sign you as their listing agent representative.
As there are always going to be discount brokers in the marketplace, you obviously need to be prepared for such questions from the seller. Basically, a seller shouldn’t ever be paying you more than discount brokers, unless you can show them your value.
You need to be fully prepared for your Listing Presentation. We will go into further details on this preparation and tips for success in Chapter 8: Listings ~ There’s No Second Place.
This is your opportunity to show and explain the value that you can offer. The way to do that is prove your track record and negotiation skills, and how they have helped to keep sellers out of trouble and helped bring more monetary value to the table as far as price. In addition, you should highlight how you harness the marketing tools that are available to you, whether it’s ads in the paper or on the web. Mention too, your staff who will be assisting in the listing, and you can even talk about the cost of infrastructure of running your business. You must be ready with your value proposition over the competition and present it accordingly.
Naturally, with each item that you discuss, it’s important to be prepared to explain how this item affects their end result. There’s no point explaining that you have a technological tool, for example, if you don’t identify how this tool specifically relates to meeting their goals, adds value, and what it means to them.
Ultimately, without demonstrating the added value, you shouldn’t be paid more – and you wouldn’t pay more if the tables were reversed. You will not win listings if you can’t show tremendous value.
On a listing presentation, the mention of a discount broker (also known as a “limited service” broker) may never enter the conversation, but count on the fact that 100% of the time it is on the mind of that seller. When being compared to a discount broker, you should always differentiate based on your experience, abilities, knowledge of the geographical market, and technology/tools of your office; any advantage you feel that you have over your listing agent competitors.
Of course, these differentiations will vary on an agent by agent basis, but if you’ve been a REALTOR® for some time, then we recommend talking about your track record.
What are your stats? Find out who you are competing against, and compare your records. If it’s an agent who has only been in the business for a couple of years, try to find out what that agent’s production is, to compare them, experience to experience.
That’s the competitive advantage for a long-time, larger real estate business. But, as this book is for REALTORS® from all walks of life, and levels of experience from beginner to pro, you need to find out what your competitive advantage is. The trick is to be creative and think about what distinguishes you over the other guy who runs the full page ads in the paper. For instance, you might mention that you know that neighborhood inside and out, even though you’ve only sold 2 houses; they were both in this specific area and very similar to theirs.
While one agent can proudly say they’ve negotiated 300 deals in the last 18 months, a smaller agent may state that they’ve negotiated deals right on this block, plus, “I have all the time in the world, this listing will be treated with kid gloves when we have an offer, I’m not part of a big machine…”
If you know you’re running against an agent who is larger than you, you will likely want to talk about the advantages of being small – you’re versatile and attentive, you offer a personal touch, and the client won’t be lost amongst many other clients. Meanwhile, if you’re a large and established REALTOR®, that’s what you’re fighting against.
Be ready and pick your side before you go into a negotiation. Are you up against a rival, a smaller agent, or a larger agent? Either way, if the clients aren’t telling you ‘yes’ at the end of the presentation, then these factors came up in their minds, but you didn’t overcome them.
Also in this chapter: Discover how to talk about your marketing value, learn the client’s perception of value, a lesson from George Costanza and should you say no to the first offer?
To learn more about or purchase “Blueprint for 100 Deals or More Than $1 Million Per Year in Income,” visit: http://www.blueprintfor100deals.com/.
Rick Bengson is the CEO and Co-Founder of ShowingSuite, Inc. a leading real estate productivity software company, and Co-Creator of HomeFeedback.com. Alan Shafran is the owner of The Alan Shafran Group, selling up to 175 homes per year. To learn more about “Blueprint for 100 Deals or More Than $1 Million Per Year in Income,” visit: http://www.blueprintfor100deals.com/.
Editor’s Note: “Blueprint for 100 Deals or More Than $1 Million Per Year in Income: The exact systems and technology to sell 100+ homes, every year—no matter the market,” is a new book by leading real estate industry executives Alan Shafran and Rick Bengson that outlines how to build your business as well as make more money, please more customers and improve your overall quality of life, whether you are a novice or climbing the ladder in the real estate business. For the next several weeks, RISMedia will be running portions of each chapter every Wednesday or Thursday, highlighting the in-depth information and invaluable resources the authors have compiled in this exciting, new publication.