The Two Most Misused Phrases in Real Estate Negotiations
Do you mean what you say and say what you mean? It sounds simple enough, yet curiously I'm finding this basic tenant of negotiation is being ignored by many Realtors and their clients in today's marketplace.
In this busy Spring 2013 real estate market, the one we've earned after 5+ years of adverse market conditions, I'm seeing far too many agents are out of practice when it comes to negotiation skills. Two glaring examples come to mind, they are the two most misused phrases in real estate negotiations.
We have a deal
"We have a deal" are beautiful words. Hearing them can be nearly orgasmic if you've been working on a negotiation for days on end. When I hear the phrase "We have a deal" the next thing I want to see is.....
Signatures. Ink on paper. We've arrived at a conclusion. We are ready to sign.
Because let's face it, it's not just "we have a deal" it's usually, "congratulations, we have a deal". Few things are more offensive in business than when you hear these words and then the other side keeps negotiating. They may try to downplay this tactic by asking questions and making suggestions. This is usually followed by an attempt to change the terms of the contract.
Technically you don't have a deal until the contract is fully executed. Nevertheless, I'm old school and I believe your word should be your bond - whether it is in an email, text message, or a verbal statement.
Let's say you uttered this joyous phrase on behalf of a client and you then see that your client has changed their mind. As quickly as possible you should let the other side know that you made a mistake and that you need to reopen the negotiation. It's not a great position to be in, but you're going to make it a whole lot worse if you don't apologize.
What you don't do is send an email or a text hours later with new demands. If you do, don't be surprised if the other side walks. Even if your points are minor, from an emotional perspective doing a 180 degree turn from "we got to the house / we sold the house" to the feeling of "uh oh, they were not serious" can be devastating.
Before you use that joyous wonderful phrase "we have a deal" as yourself and ask your clients, "Are you sure? Do you have any outstanding questions or concerns?" Maybe they need to sleep on it, I can respect that. Just don't put the other side in the position of having to call their clients and let them down. That is not the right way to start a deal.
Best and Final
"Best and Final" This is one of the two most misused phrases in real estate negations along with "we have a deal". Sometimes I hear agents say "best and final" and I know they are bluffing. The delivery is too fast and too casual.
If I say the words "best and final" it really means "take it or leave it". I'm just using real estate jargon. My clients have reached their limit. It doesn't have to be said in a hostile way. I actually think it can be polite. Trying saying it this way, "My clients have instructed me to make this best and final offer ________________. Thank you for the consideration, we hope the answer is "yes".
"Best and Final" makes the responder have to answer "yes" or "no". Sure, they may issue a counter offer, however you've already let them know that they have your best offer. A counter offer is a long "no".
Don't say "best and final" unless you mean it. Make it a special occasion phrase. Not every negotiation involves a "best and final" round.
The two most misused phrases in real estate negotiations are "we have a deal" and "best and final". Ask yourselves, do you mean what you say and say what you mean? You have to balance the logic with the emotion. These two phrases should only be uttered at crucial times during the negation. Don't use them casually.