This post was originally published on RealEstateGradSchool.com.
This week’s 1st Fifteen is all about negotiation. We’ve been speaking about the most important personal qualities of a negotiator, and the rules of negotiating. The qualities and rules will be easy to remember – because they’re the same thing. It all boils down to this:
Get as much information as you possibly can about the parties and the property before negotiation begins…
…Then keep getting more.
What follows is the most important tip and the most ignored:
Know the Motivation of the Buyer and the Seller
Hopefully you know what the motivation and urgency are of your client. But I know that you don’t always.
Often, after one of my presentations on negotiating, agents tell me:
“I’ve got an offer…but no one will move!”
My first question is: “Why aren’t the sellers moving?”
And sometimes I’ll hear back: ”I don’t know…”
“I can’t help you,” is my answer. Because at a minimum we need to understand the motivation and the urgency of your client.
Tip #1: Ask the Rapport 4
The 4 questions to define your clients’ Motivation and Urgency
- Why are you moving? (Get to the deep why.)
- Where are going?
- When would you like to get there?
- How important is it to get there at that time?
If you as the agent don’t know the answers to these questions, you’re very limited in being able to claim power in a negotiation.
Tip #2: Know The Real Issues for Each Party?
Real issues help you get even more knowledge: They want a bigger house, more square feet, an office with a workout room, a nicer community to impress friends, they’ve got 6 kids with twins on the way…
Tip #3: Find Out About the Properties Sale History
Go to the MLS and find out what it sold for. Go to the tax records. Find out how much work was done to the house, and even how many offers they received on the house.
Tip #4: Find Out Anything You Can about the Parties
Talk to the other agent (more on that soon), the neighbors, go on Facebook, Google their name, address and their workplace. Go to LinkedIn. This gives you perspective. It helps inform you about how aggressive you’ll need to be and what kind of personality style you’re dealing with.
Tip #5: Find Out Everything Else that You Can
The other agent can be a tremendous source of this information. But the agent is not supposed to tell you without explicit permission from the client. The agent is violating his or her fiduciary responsibility of confidentiality by telling you anything personal about their seller.
However, the agent will…it’s a beautiful thing!
All you have to do is call the other agent and say:
“You know I have buyers who are interested in the property, and I have some questions before I submit their offer.
- Can you tell me why these people are moving?
- Do they have a place to go, where are they going?
- And is there a time-frame that they’re shooting for?”
Now, if the other agent is skilled in negotiating they’ll laugh and say:
“Nice try – just submit your offer and I’ll try to get it accepted.”
If they’re normal, and they’re not sharp in negotiating, then they will spill their guts to get your offer.
But don’t you do that.
Here are some more questions:
“Will they be getting any help buying it?”
Or: “Does their move depend on getting a certain amount of equity?”
You might say, Hey Rich, isn’t this game playing?
No, this is skillful negotiating.
You might say, Hey Rich, doesn’t this violate fiduciary duty?
Just the opposite – you’re hired by your client to do the best job that you can, and what better way could there be to do that than getting this information from the agent?
And some more questions:
“Have improvements been made that they believe add value?”
“Which have added the most?”
“Did they do them themselves or have them done?”
Bonus Tip: Also get to know the inspectors, appraisers, lenders – it will give you better perspective.
Just ask the questions and look at every site you can find, because the negotiation goes on through the inspections, through approval of the mortgage and until the papers are finally signed.
Be continuously looking and asking. Remember, research is the #1 quality of a top negotiator.
Here is your ingredient for the recipe of success today:
“Get all the possible information on every client – yours…and theirs.”
Hug the ones you love, and make a sale!