Why do you need to be a Skilled Negotiator?
To Substantiate Your Fees - Being a Professional Negotiator ...this one skill set will separate you from other business models which do not offer contract/inspection negotiations for the client.
"When negotiating, don't give a concession unless you get a concession in return."
When we look into and read this phrase, we need to realize it forms the basis for the entire negotiation process. Negotiation is all about giving and taking, while continually moving towards reaching a goal of a successful agreement for all parties.
As a real estate agent, there are times when you'll want to implement this approach for yourself as well. One of the greatest mistakes I see real estate agents making is simply caving in when it comes to negotiating their commission. In these situations, a conversation between a Seller and Agent might go something like this:
Owner: "I only want to pay you a 4% commission instead of the 6% commission."
Agent: "Uh-OK."
Looking at this closer, going from a 4% commission to a 6% commission, (assuming you pay 3% to a Buyers Agent), is a 66% decrease in an agent's income for doing the exact same amount of work on the transaction … Kind of stings when you think about it that way …doesn’t it?
With this in mind, the minutes you spend negotiating your commission most often translates into a greatly increased hourly rate for the job you perform as a Listing Agent ---This negotiation may quite possibly be the most “valuable” time for the financial leg of your business that you'll ever spend!
In continuing on with this line of thinking, recognize that some people love to engage in the “game” of negotiating. They want to feel they're in the position of power. An agent who stands toe-to-toe with them as a skilled negotiator, wins their respect at a much higher level.
So know this and utilize it to your advantage with the people you deal with who are like this in your real estate business.
This also means being prepared …These “power hungry” agents also like to brag about how they got such a great “deal” for their client …the only way to go head to head with them is through preparation.
Explaining Your Negotiation Strategy- It is very important that your client know your negotiation skills and strategies up front. This will set you apart from your competition. Show your stats and how they compare against other REALTORS®. Explain how negotiation is about choices. Find out which terms and/or conditions are important to the client … Knowing what your clients hot buttons are, what they are willing to compromise on and what they aren’t is a good start. Find out where they want to “end-up” and plan your strategy around that number. Keep your client informed and never show weakness to the other side.
Always look to get something in return for what you're giving up when negotiating for clients. If you sense that the other side has finally reached the limits, it may be time to re-think your strategies …gain as much INTEL as possible for what the other side really wants …
Ask WHY? A LOT! Why is the tiny question "why?" so important? Many times the reason, or reasons, the client is stonewalling will be hidden. The simple question "why?" could unveil the real reason and lead to a breakthrough.
It’s The Psychology Of Negotiations …Making both side feel as if they have won, this is critical. Value perceived is Value believed with the client. We must lose our egos and suggest the client lose theirs as well. Many a transaction could have been but wasn't because it couldn’t work its way around a huge set of egos.
*For every day a listing stays on the market past 30 days, the perceived value of the property and of the REALTOR® go down. Hence the perception of the consumer is two-fold negative, there must be something wrong with the property, and the REALTOR® !
Client Perception Becomes Client Reality
Eddie Brown ©2011
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