In previous posts I went over "tough guy" vs. "nice guy" negotiators and how I have found that the "nice guy" approach, if done correctly, can be far more effective when negotiating residential real estate.
I also had a post about what I call "The Art of the Email Deal". How I use email to position my buyer and set a positive tone for the negotiations.
In this post I want to bring those two together. I'll show you how I positioned my buyer in order to get a home that was listed for $965,000 for only $579,000, on the first counter offer!
In my negotiations, I find that good things seem to HAPPEN when I remember these words:
- Honest
- Authentic
- Polite
- Positive
- Empathetic
- Nice
Negotiation is all about building trust. Using HAPPEN seems to create a lot of it.
- Be honest. If you get caught in a lie or inconsistency, all the trust goes right down the drain. Tough to recover.
- Be authentic. Take off your mask. Don't pretend to be someone you are not. Don't be a mystery buyer. People fear the unknown. The unknown will cause the shields to go up.
- Be positive. Don't think that pointing out all the negatives will get you a lower price. It might actually cause the seller to think you aren't very motivated and that you might change your mind at the last minute.
- Be polite. Pretty basic stuff. The seller is probably someone's mom or someone's precious child. Treat them that way. Show some respect. Let me hear it now, R-E-S-P-E-C-T...
- Be empathetic. Let them know that you are considering their situation and maybe feel their pain. You want this to be one human being trying to work something out with another human being.
- Be nice. No one enjoys dealing with a jerk. Don't burn bridges.
In the example above where the seller came down from $965,000 to $579,000 on the first counter offer:
- I tried to humanize my buyers. They weren't some wheeler-dealer investors trying to steal the home. They were just regular people who didn't want to pay more than they thought it was worth to them.
- I used the comparables as best that I could. I accentuated the facts that supported my case best. The email format is wonderful for links to supporting documentation.
- I showed empathy for the seller. We acknowledged his anticipated loss of money and how unfortunate it was that the market was the way it was but we had no control over it.
- I had the documentation to show the seller that my buyer was well qualified to complete the deal.
- By including a lot of detailed information, I tried to convey that we spent a lot of time doing our homework and were very serious buyers.
The beauty of this is that I never have to make up any stories. All I have to do is tell the real story of my buyers. It's much more interesting than anything I could even think up. Real life is usually more interesting than fiction.
No need to BS. No chance of getting caught in a lie. No need to worry about what you said to who.
There are a lot of negotiating tactics that I've read and studied, but to me they are just things that you have to allow to happen naturally. Be aware of situations that might work to your advantage but never force the situations. You don't want to get caught faking or bluffing.
Don't use the "Good Cop, Bad Cop" technique if it's not genuine. But do bring it up if it is the reality of the situation. If the husband loves it and the wife is reluctant, bring that up. But don't make it up.
Don't use the "It's All That They Can Afford" technique if it really isn't. Just say that it's all that it's worth to them right now. Don't be afraid to show them that you can actually afford a lot more. In the example I shared above, my buyer showed that he could afford a million dollar home but he wasn't going to pay more than what it was worth to him.
Don't use the "Deadline" technique if there really isn't a good reason for a deadline. But if there is limited time to come to a deal, then you certainly should convey that time is of the essence.
In the situation where we had a seller who had received multiple offers and chose our offer that was $5000 less than another one, we didn't lie or make up a story. We just described the actual situation.
In my email I simply humanized my buyer.
"He is a single guy right now and is looking to get a roommate until he eventually gets married. His girlfriend loves the place along with his girlfriend's parents. His mother also loves the home so I think everyone approves and it should be smooth sailing."
Guess what? It just happened that the seller was in the same position when she bought the home. She apparently connected with my buyer on an emotional level so much so that she was willing to take $5000 less than another offer because she liked my buyer. She had never even met my buyer. All she had to go on were my few words in my email. Those few words were worth $5000 to my buyer.
Just a few other thoughts to keep in mind when negotiating.
What a home is worth is always very subjective and is subject to change due to time and changing circumstances. Don't assume anything. Anticipate but don't decide for them. Don't fear submitting an offer because you think you know that it will be rejected. Many times you will be surprised.
Another important thing is to focus on what your final goal is. Figure out, upfront, what your goal is and be happy when you get it. Don't worry if the seller won a few more bargaining points in the process than you did. Remember the big picture and be grateful when you reach your goal.
Never burn bridges. Always keep the door open. If you actually have to use the "Walk Away From the Table" technique, if you were pleasant and professional, they just might reconsider after a timeout. If you were a jerk, even if you convinced them of a lower price, you probably won't be the one they offer it to.
If this all makes sense to you and you can see it working for your situation, give me a call to set up a time to come in and discuss your specific situation.
I'm a "nice" guy negotiator looking help other nice people. It's just a better, more effective way to get real results.
This was the final segment of a three part series describing my negotiating techniques.
Part 1: The "Tough Guy" Negotiator. Is it Effective?
Part 2: The Art of the Email Deal
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