A recent study by the National Association of REALTORS® revealed that 89 percent of buyers and sellers consider negotiation skills to be the most important skill when selecting an agent. In an industry where commissions are being challenged and discounted daily, negotiation skills can be the difference between receiving a four or six percent commission. That means, in a $500,000 transaction, you could be missing out on an additional $10,000 in your pocket.
During the most recent Homes.com webinar, “Negotiating Contract to Close: Tactics and Tips to Succeed,” Alexis Bolin shared some of her top negotiation tactics, including the best ways to deal with other agents and the secrets to getting what your clients want at closing. She explains that a negotiation is nothing but a discussion. “It’s a bargaining process between two or more parties seeking to discover a common ground and reach an agreement or resolve a conflict,” she says. “Sometimes that doesn’t happen and that’s because we can’t get all parties on the same common ground.”
What’s interesting is that 80 percent of all vital issues are normally resolved in the last 20 minutes of the time allotted on an offer. For that reason, Bolin advises not to get frustrated when things aren’t moving as quickly as you want them to happen—data shows it will all work out. To make sure you’re prepared for your next sticky situation, here are some top negotiating tactics from Bolin.
The secret to any good negotiation is to be properly prepared for the meeting going in. According to Bolin, this means learning everything you can about the people involved in the negotiation—the buyer, seller and even the other agent. Use Google, LinkedIn and Facebook to learn more about the parties involved. When it comes to the other agent, if you don’t already know them, find out the number of sales they’ve made and their specialty.
To make sure you’re prepared, Bolin lists four things that you should keep in mind when selling a house:
1. It’s what you know, along with who you know.
2. It’s the little people who get things done.
3. Never underestimate the power of the person behind the desk.
4. Always pay it forward.
Even before you’ve finished closing a transaction, thank all the people who have been involved by sending thank you notes and referrals. “Small things can go a long way,” she says. “Part of prospecting is to be nice to the small people.”
A big tip Bolin offers is to go into negotiations with the right frame of mind, which means you’re in a good mood and you avoid acting defensive. Be sure that you’re polite to all parties involved. You should ask questions, be brief with answers, never argue and use compliments when you can. “Resolve the easiest issues first and don’t give up something without getting something in return,” she says. “Find ways to come to an agreement first and get a feel for what’s going on. Be prepared to defend your client with facts, not emotions.”
Questions for Buyer’s Agent
Don’t be fearful of talking with the buyer’s agent about any offers. Ask what their clients are thinking so you’ll be able to make the best moves for your own clients. Bolin recommends asking the other agent what homes are on their client’s list, what they’ve seen and why they like this property best. To get this information, let them know that it’s your job to get their offer accepted, but you’ll need their help.
If there’s an issue on pricing, Bolin suggests this situation: “If I have a house that’s $300,000 and they offer $240,000, you must have found some comps we haven’t seen; what three comps have you found that I can use to defend or support the offer?” Bolin admits that most times, they don’t exist, but it opens up a dialogue to better understand where the buyer and agent are coming from. After this, she suggests asking, “What do you think needs to be done to get this sale to work?” She also suggests saying, “If this was your listing, where would you have suggested the seller price it?”
While these are just some of the tips provided in the webinar, there are even more great negotiating tactics you can learn by viewing the full recording. For more free real estate education including best practices, visit Secrets of Top Selling Agents. Be sure to sign up for the upcoming webinar, “The 4 Simple LifeHacks of SuperProducers: Get More Done, Make More Money, Spend Less Time, Enjoy Life More” featuring Michael Maher on Wednesday, February 24 at 1p.m. ET.