9 min readThe right deal strengthens client relationships and leads to more business. Whereas, the wrong deal may cost you the client for good. Months of work can come undone fast when real estate negotiations don’t go to plan. Small mistakes and oversights can ruin deals. And as negotiations can drag on, agents need to stay focused to secure the best deal for clients no matter what happens. It’s a complex game, so this article explores real estate negotiation tips to help you secure the best deals for clients.
Real Estate Negotiation Tactics and Strategies
1. Learn the basics of persuasion and communication
Before diving into specific real estate negotiation tips, it’s important to remember that negotiation is a skill. Working with clients, appraisers, inspectors, and other agents each day – you’ll naturally improve with experience.
However, knowing the fundamentals of communication and persuasion first may save you from making costly mistakes on the job.
Three essential books for real estate agents:
- Influence: The Psychology of Persuasion by Robert B Cialdini Ph.D. Learn tried and tested persuasion tactics that have been used for decades by companies of all sizes. This book explores reciprocity, scarcity, authority, commitment and consistency, liking, and social proof. After learning why these work and how to use them, you’ll spot opportunities to use them during negotiations.
- How to Win Friends and Influence People by Dale Carnegie. A classic self-help book, filled with timeless advice on how to improve relationships and win people over to your way of thinking.
- Never Split the Difference: Negotiating as if Your Life Depended on It by Chris Voss. After policing in Kansas City, Chris Voss joined the FBI where he entered a world of high-stakes negotiations. As negotiations can be stressful, learn some tips from a professional who has seen it all.
2. Get ahead of the competition with round the clock customer service
Negotiation is effective communication. Yet… most real estate companies accept missing hundreds of calls every month! 85% of callers whose calls are not answered will not call back.
Miscommunication/failing to provide information causes confusion and delays. So, limited office hours and voicemail machines only stifle real estate negotiations and irritate callers. A 24/7 answering service ensures you don’t miss any more calls. It also builds trust from the start as clients know they can reach a friendly human whenever they need help.
A team of friendly virtual receptionists can help clients with questions and concerns, schedule appointments, take calls and live chats 24/7, and connect clients via video calls. You can keep up to date with activity via a mobile app. Learn more about the benefits of a real-estate answering service.
3. Prepare for negotiations
It pays to do your research to be aware of market trends, recent sales, and property values in the area. Should the asking price be too high, you can make a good case to lower it if you can prove that recent sales in the area were lower than the seller’s asking price.
It can also be embarrassing and costly if your clients have done more research than you. If they feel that you aren’t taking their case seriously, it’s hard to trust you.
Create a checklist to prepare yourself for negotiations:
- Pre-negotiation preparation – gather property and market information and learn client needs and seller motivations.
- Set objectives – define your goals for negotiation and potential trade-offs.
- Document gathering – prepare paperwork and online documents that you’ll need.
- Develop your strategy – choose the negotiation approach, prepare an opening offer, talking points to cover, scripts to use (for emails and texts), and then practice your negotiation strategy.
- During negotiations – be aware of timing and remind yourself of your objectives.
- Post-negotiation actions – document the final agreement, follow up post-negotiation tasks, close the deal, and assess the negotiation process to improve for next time.
4. Manage client expectations
When bad/unexpected news is received, the process can break down as buyers consider the next move. This frustrates all parties. So, try to stay proactive and prepare clients for the next possible steps. Do what you can to keep momentum high.
5. Meet sellers in person
One of the simplest real estate negotiation strategies you can do to tip the scales in your favor is to meet the sellers in person. Sellers most likely have multiple offers to consider. So if you’ve met them and made a good impression, this separates you from the other offers.
Taking the time to meet sellers shows that you’re committed. The seller will feel inclined to pay more attention to you than the ones that didn’t. Another benefit of meeting in person is because it’s the most natural way to talk. You can learn a lot from the seller in just a few minutes, which beats back and forth emails and phone calls.
6. Avoid making the first offer
When there’s something we want, it’s natural to run towards it to try and secure it quickly. But this isn’t a good strategy when it comes to buying property.
The art and science of negotiations have been studied for a long time: a Harvard University study revealed that those who make the first offer don’t get the best deals. Plus, they tend to feel more anxiety than those that follow their offer.
One successful technique for negotiating real estate is to wait for the first offer; it reveals a lot. It sets the tone for negotiations. Making the first offer as a seller may mean asking for too little. Whereas if you’re the buyer, you might offer too much. Entering negotiations after the first offer gives you more information to work with, increasing your chances of securing a better deal.
7. Don’t reveal too much information to sellers
There might be several reasons why your clients have their hearts set on buying a particular property. But if this information is passed on to the seller, they have more leverage as they know that the buyer really wants their property. So, be careful of giving away too much information as it could come back to bite you.
8. Don’t rush the process… but don’t take too long!
The stress of negotiating makes some agents want to wrap up negotiations ASAP, but focusing on speed isn’t the answer. Trying to move fast rubs buyers/sellers the wrong way. It can come across as impersonal and careless, leading people to think that you’re only interested in your commission.
Another reason why going too fast isn’t a good idea is that it leaves people feeling they might have got a bad deal as it went through too easily. A little back and forth is expected when negotiating real estate, so when clients prepare for that and everything happens faster than expected – they can’t help but think that something’s wrong.
So is going slow the answer? No, that’s just as bad. Going too slow frustrates people and leads to more emails, texts, and phone calls. There’s a sweet spot in the middle where things are progressing steadily, not rapidly. This way, everyone feels respected.
Clients put their trust in your hands when negotiation begins. Real estate negotiation tactics will help you but it’s important to remember that the human touch is the most important part.
Negotiation involves empathy, persuasion, patience, clear communication, and the drive to get the best deal possible. So, show clients you’re here for them and keep developing your negotiation strategies to boost your chances of securing the best deals.
Want to see how you can capture more leads 24/7 and grow your business with a live answering service? Book a free 15-minute consultation today.
