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Yesterday, we did a teleseminar show in the SWS Virtual Studio about negotiating - specifically, negotiating on behalf of our buyers and sellers (as opposed to any sort of fee or commission negotiation). I was joined in the studio by Blake Farley, from Silver City, New Mexico and from the positive feedback I received on her presentation and brilliance, I'm guessing you'll be seeing her on future shows - GREAT JOB, Blake!
The format of the show was that Blake and I took turns sharing our top ten favorite tips and strategies for keeping negotiations on track and civil... and, oh yeah, maximizing the likelihood that our client gets what he wants without any unnecessary drama, chaos or angst. At the end of the show, I asked the audience to tell me what their favorite tip(s) of the day was/were, and here were the results:
Favorit-est Tip #1: When negotiations get hot and heavy, withdraw. Dead silence from your side. Don't tell the other agent you're "thinking about it" or going to "sleep on it," just stop all communication until the next day. Very unsettling to the other side, and keeps your client from getting carried away by the emotion of the negotiation.
Favorite-est Tip #2: Never believe anyone when they say "This is our best offer" or "This is our bottom line," and related, never let the deal die on your side. No one knows what their best offer or bottom line is until they've either signed an agreement, or rejected one. When the other agent presents a counter-offer to you and tells you "this is the best we can do," pay no attention. If your client still wants the house (or still wants to sell), counter back. More often than not, the negotiation will continue beyond the previously stated "best" or "bottom."
Favorit-est Tip #3: Related to 2, never ask your buyer or seller for their bottom line or highest-and-best. If you do, you force them to commit to a figure and they might be uncomfortable down the road if they're willing to go higher or lower. A side benefit to this strategy is that you won't be accused of spilling the beans to the other side if, by chance, the offer or counter comes in at the exact figure they shared with you. If a buyer or seller tells you what their highest-and-best or bottom line is, act as if you didn't hear them ;-]
Favorit-est Tip #4: Get everything in writing - no oral negotiating. When agreements are reached over the phone, something always comes up when it's time to put the agreement on paper, creating unnecessary drama. It's easy enough today to just "write it up," and keeps everyone on the same page, so to speak.
(Tied for) Favorit-est Tips #5, 6 & 7: (Almost) always counter an offer, even on technicalities to keep the buyer from feeling he could have/should have offered less; as the listing agent, don't remind the buyer's agent of contingency deadlines (to protect your seller's right to retain earnest money); and always remember whom you represent, which helps you be a stronger negotiator and not make an idiot out of yourself with your own client!
Other tips from the show:
Make the offer price/counter price "attractive" to the other side by rounding up or down (e.g. $279,900 versus $280,000)
When countering, use positive statements when possible - e.g. instead of "No termite inspection," say "Buyer to pay for termite inspection."
Realize that you can say NO - and that the other side sometimes fully expects you to.
Set expectations with your clients BEFORE you get to the offer stage (e.g. market conditions, communication, etc.)
Negotiate delayed possession for staged and owner-occupied properties, in case the loan falls apart at the last minute
Try to give the other side an opportunity to save face when negotiating - don't reject a counterproposal outright - give a little bit, even a token amount or concession.
If you missed the show, you can purchase a recording of it in the SWS Bookstore for $3.99, or join Club SWS for $10/month and get access to recordings of all past, present and future SWS shows!
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.