Make Better Deals This Year: Negotiation Tactics and Tips for REALTORS®
As a REALTOR® you have a very important responsibility to work and act in the best interest of your client. Whether they are buying a house or selling their home, it is your responsibility to ethically get them the very best result possible. Achieving these results stems from clear communication, due diligence, hard work, and ultimately skillful negotiation. When you arrive at the closing table, your client should rest assured that the check they’re writing, or the check they’re receiving, is the outcome of a well-negotiated deal. Here are a few tips and tactics that help you excel when it comes to negotiating your next client’s transaction.
Leverage Market Value Over Asking Price
It’s important to understand the market value of the home that your client is interested in. Even in a seller’s market, there is no reason to overpay. Using this metric as your baseline before you make an offer can be very effective to ensure that your client does not spend too much. While there will likely be a back and forth, starting too low is better than starting too high; and when you can back up your offer with logic, it can put you and your client in a very strategic position.
Know How to be Persuasive
Persuasion is key in any negotiation. There are six psychologically proven rudiments of persuasion. Being familiar with them and how to use them can be very helpful in enhancing your persuasiveness during a negotiation. The six rudiments are as follows:
- Reciprocity – If you offer something, people tend to feel obligated to give something in return.
- Authority – Requests made a knowledgeable, professional, perceived expert tend to be received more openly.
- Scarcity – A lack of resources or the principle of supply and demand can be very helpful.
- Liking – Finding commonalities with the other party can make you more likeable, and therefore more agreeable.
- Consensus – Having a reputation as someone that is nice and easy to work with in your field can make negotiating with other agents less challenging.
- Consistency – Being consistent makes people more comfortable. When they are more comfortable, they are more apt to agree with you.
Understand What the Other Party Wants and Needs
When you know what the other party values, you can use that to your advantage. Whether your client is buying or selling, there are more important factors for some there are for others. If price is sticking point you can leverage that for upgrades, repairs, or other considerations. Leveraging this information allows you offer what they want, while making sure your client is receiving something of equal or more value, at least to them. This creates a win/win scenario for everyone.
Be Familiar with the Transactional Data for Your Market
Knowledge is power. If you know the key real estate performance metrics for your area you will be at a distinct advantage. Understanding these statistics and how you can apply them during your negotiation will not only lend to your credibility (authority), but also back up your offer with hard facts. Some of the transactional data you should be familiar with includes:
- Average time on market
- Comparable
- Price per square foot
- Room counts
- HOA fees
- Taxes
- Schools
- Transportation
- Infrastructure
These are only a few examples of how you can excel at the negotiating table and represent your clients in the best way possible.
