The Indispensable Agent: “A dose of strategy, a dash of inspo, & a few tall tales.”
Must-Win Real Estate Negotiations (Part 2 – Negotiations)
It is not the one you are thinking about…
When it comes to real estate negotiations, everyone immediately thinks about the negotiation that takes place between buyers and sellers, through their respective agents. While this is an important negotiation, there are much more important and frequently overlooked negotiations that take place every day. Negotiations that we must win or at least win more often than we lose. The negotiations that take place to convert a lead to a client, for example, will be much more predictive of your success in real estate than your ability to convince a listing agent that their seller should include the fridge in the deal.
Although this is about “real estate” negotiations, I would be remiss without first pointing out that the most important negotiations are the ones we have with ourselves every day: when to get out of bed, to take care of your mind and spirit, whether or not to get that workout done, whether or not to control your anger and fear, how you respond to your spouse or loved ones, what to be stressed out about vs what to let go, etc. All of these are “negotiations” and your ability to win them more often than you lose them is the number one predictor of success in life beyond real estate sales.
Having said that, here is a list of some of the most important negotiations you will face in your real estate business (this is absolutely NOT exhaustive… there are many more)
Prospecting – Negotiation with Yourself
- Are you going to make the calls you need to make today, or not?
- Are you going to write the notes and finish the CMAs you promised to do?
- Are you going to be intentional about the relationships you know that you need to build today, this week, this year, and throughout your career?
Negotiating with Buyer and Seller Leads
- How are you going to get prospects’ contact information at an open house so you can follow up?
- Are you going to be able to convince a buyer or seller to have an in-person meeting with you?
- How are you going to convince a buyer to work with you, exclusively?
- How are you going to convince a seller to list their home with you instead of one of the other dozen or so agents that they know?
Negotiating with your client, the home seller.
– Negotiating how to prep the house :
- What if the seller refuses to paint the purple bedroom or says that the buyer can “look past” the shag carpet in the master bathroom?
- How do you work with a seller who doesn’t want to remove all the personal belongings from the house?
– Negotiating commission:
- How do you handle the question of reduced commissions?
- Do you offer a Good/Better/Best approach and have a pre-fix menu of services (bare minimum to full blown marketing campaign with varying commission structures?)
– Negotiating on listing price:
- Data, data, data … show them sales in the area in the last month.
- If they want to list too high, show what homes on that price range look like.
- Have a plan if you decide to list high … reduce after certain amount of time?
Negotiating with your client, the home buyer
- Loan approval. How do you deal with a buyer who wants to look at homes but is not approved?
- Discuss must haves and location and set them up on MLS search.
- Buyer rep – what if they don’t want to commit to working with you?
- There is no such thing as the “perfect home”.
- What if they want to lowball all homes they like because they heard that the market is down/slow and “all sellers are willing to negotiate” ?
Negotiating with your strategic partners
(service vendors like photographers, lenders, stagers, handyman, etc)
- How do you ensure you get the level of service and communication you expect (timelines, delivery, communication, etc)?
- Arrange to have them paid at closing instead of up front, whenever possible, and encourage them to put some “skin in the game”.
- You refer them, do they refer you? Do not waste your referrals. They are precious capital.
Take Away –
There are many negotiations that take place in real estate outside of the “Deal” itself. Your ability to navigate these negotiations successfully will determine whether or not you get clients to work with you in the first place. Put simply, you need to master these if you want to put yourself in the position to be able to negotiate with another agent on behalf of your buyer or seller.
Lead Generation – First Time Buyer Seminar
These events are a fantastic opportunity to work your strategic partnerships, generate solid leads, add real contacts to your database, and get more practice with speaking and instruction (which we all need). I have always been a big believer in putting these classes/events on for one simple reason – they work. Partner with your lender as well as a home warranty professional (for example) to help push some real money into promoting the event and preparing professional class materials (binders, handouts, marketing collateral, etc). Get with your title and escrow provider and have them get involved by providing space to host the class (if you don’t have access to a classroom with your brokerage). The economics of these events can be staggering if they are done the right way. I am seeing agents get 20-30 attendees and pick up 3-4 qualified buyers almost immediately, to say nothing for the future buyers and future referrals that come from staying in touch with the group (your follow up campaign). All this with almost no “out of pocket” expense. It is an opportunity to hone your presentation skills, deepen your partnerships, grow your contacts, and generate new business opportunities (leads).
A Quote To Ponder
“Let us never negotiate out of fear. But let us never fear to negotiate.” – John F. Kennedy