The Indispensable Agent : “A dose of strategy, a dash of inspo, & a few tall tales.”
Negotiation Strategies Every Agent Must Know (Part 1 – Negotiations)
Hint: It’s not about the deal & it’s definitely not about you!
If I could say anything about negotiations in real estate it would be that most agents are focused on the wrong things. The wrong outcomes, the wrong players, and in most cases even the wrong negotiations. The negotiations that matter the most are not the negotiation between the buyer and seller over a purchase and sale agreement. The most important negotiations happen every day and the stakes are much higher than a refrigerator or a piece of equipment or a sale price. Further, I have observed that most agents carry an attitude and approach to negotiation that is either unproductive or downright toxic. They are completely attached to the outcome and their ego takes center stage to the point where they cannot be effective. Many agents, through sheer ignorance or willful arrogance, bumble their way through the negotiations of life. I hope this piece helps to shine a light on a meaningful path forward, for some of you. Part 1 of this three-part series reveals the tried and true principles of world-class negotiators.
Principles of World-Class Negotiators
Here are a few of the most important lessons I have learned in hundreds of negotiations with other agents, clients, vendors, employees, brokers and brokerage owners.
- Top Performers look at the concept of “negotiation” with other people, differently than the average agent. They don’t look at it in terms of “winning” or “losing” and they don’t approach it ready to “go to war” and “fight”. Instead they ask difficult questions and perform real-time research with their counterpart to discover the underlying motivations and needs of the other party. Upon discovery, they work to meaningful solutions that both parties can accept.
- Negotiations are all around us, every day. Everything is a “negotiation”. You need to be good at this.
- Getting out of bed – the first negotiation of the day and the one you must win, is with yourself.
- Did you get your workout in today or did you lose that negotiation?
- Is your mother in law living in your basement against your will?
- Do your kids eat their dinner or throw it on the floor?
- Is your lender sending you referrals or sending them to someone else?
- What price does your seller list at?
- What is your buyer’s search criteria and what homes will you show them?
- This list could go on… and on…
- The best in the business are always willing to walk away… or they are good enough at masking their emotions that the other side thinks they will walk away. You have to be detached, emotionally detached and personally detached, from the outcome. If you have “commission breath” or come across as desperate, you will struggle to convert leads to clients and you will be unable to influence others to make decisions.
- Always keep your composure and keep your emotions in check. If you and your counterpart are screaming at eachother, everyone loses.
- Do not negotiate against yourself. If you have made an offer or counter-offer, then your counterpart needs to come back to you with a response. If you modify your offer before they respond to you, then you are now negotiating against yourself. You are doing their job for them.
- Great negotiators ask great questions (another newsletter coming soon will have a list of these). Ask open-ended questions that get your counterpart talking. This is easier for us in real estate because real estate agents LOVE to talk… just don’t be that agent. After you ask your targeted, calibrated, open-ended questions, then you need to…
- Shut up. You have two ears and one mouth for a reason, use them accordingly. Ask a direct, calibrated question and then shut your mouth so that they can answer it. Silence is powerful. It is part of human nature to be uncomfortable with silence in a conversation and people will rush to fill that silence with noise. You will be absolutely blown away at the results you get in both personal and professional negotiations if you are willing to endure that silence and allow your counterpart to fill it with noise.
- This is never about you and it is certainly not about your ego. Beware your ego. Emotion in negotiations almost always comes from ego. Ego and emotions destroy negotiation.
- Get on the phone – you cannot be an impactful negotiator via text and email. Great agents negotiate a dozen times a day on the phone. Amateurs draft countless proposals and create endless email/text chains with 6 counter-offers. Written negotiations take too long, lead to misunderstandings, and greatly reduce your ability to influence the other party.
- Knowledge can be powerful if it is used appropriately – if you have more knowledge of the given topic than does your counterpart, you have the upper hand in the negotiation. If you know the market or know the neighborhood better, then you become the authority and the “adult” in the conversation.
- Everyone, even serial killers, want to be seen as “reasonable” and will seek to justify their actions. Beware the “F” word: Fair. “that is not Fair” = “you are not being reasonable”. This is a powerful and common tactic that you must become familiar with how to employ and how to defend against.
Stay tuned for next week’s email in this three-part series: “Must Win Real Estate Negotiations”
Lead Generation – The Pareto Principle (and your referrals)
Where do your referrals come from? The Pareto principle states that for many outcomes, roughly 80% of consequences come from 20% of causes (the “vital few”) (wikipedia). Most of us are familiar with this principle. What you may not realize is that this principle applies to your referral sources. Did you know that the vast majority of your referrals (80%) comes from a small minority of your relationships (20%)? Well they do. Here is a more important question, do you know what 20% of your sphere is referring you 80% of your clients? If the answer to that question is “no” or “I am not sure”, this is a FULL STOP moment for you. If you don’t know who these people are, then you do not have the ability to give them the appropriate amount of attention (and reward) that they deserve for doing exactly what we all want people to do, refer us! If you don’t reward people for referring you, they will stop referring you. It is human nature. Conversely if you make sure people know how much they are appreciated and valued, they will continue the behavior (referring you). If you don’t know who refers you then you are in the dark about one of the most critical aspects of your business. You cannot afford to be in this position.
All relationships are not created equal. You have 24 hours in a day and you only have so much time to spend in focused 1 on 1 or small group sessions building critical relationships. If you want to be intentional about your success, you need to focus that time and attention where it is going to benefit you the most.
Further Reading & Learning
When it comes to negotiation principles and practices, a huge inspiration to me is Chris Voss. Chris is a former FBI negotiator and an incredible thought leader in his field. His video series on “Masterclass” is incredible and both of his books are a must-read:
- “Never Split The Difference”
- “The Full Fee Agent”
A Quote To Ponder
“He who has learned to disagree without being disagreeable has discovered the most valuable secret of negotiation.” – Chris Voss