The Secrets to Winning Real Estate Negotiations Part 2 – The Middle Sales
Now that you’ve become an expert on the beginning stage of the real estate negotiation process, we are now able to push forward to get you one step closer to becoming a top negotiator .
Being the middle child, I’ve come to notice the middle stages to anything should never be overlooked as it could be the most valuable information for you.
The middle negotiation stage feeds off pressure and how to handle it.
It will teach you how to master pressure situations while in the negotiating game.
Keynote # 1 Appealing to a Higher Authority
The beauty about this first step is the tactic which is very popular on both sides of the table.
What can be that tactic?
That tactic is the agent must appeal to a higher authority before making the decision. Before we get a knickers in a twist, let’s break this down and see how this can make you a powerful sales negotiator.
You might have the power during the negotiation to make the decision but your opponent does not have to know that. Your higher authority should be vague such as a “ team of investors ” or “ a landlord ”. This tactic is powerful in real estate negotiations as it shifts the pressure off your shoulder without forcing a confrontation.
One thing you must keep in mind is, there is always that one opponent who will demand to speak to this higher authority.
If this tactic is played on you, attempt to get them to admit they have decision-making authority by countering their plan with one of your own.
- Appeal to their ego
- Get them to commit to a decision, subject to some other consideration or time period
Keynote # 2: Document the Service Value Declining
That pesky, “I’ll make it up to you later.”
As a sales agent you must have come across this phrase many times and if you have not then you haven’t been prospecting hard enough.
After you demand some concessions, ask for a reciprocal IMMEDIATELY! The reason for this is according to the “Value of Services Principle” , the value of your concession will drop immediately after saying it. It states that although the information you provided to your prospect may grow in value, over time the value of a service (such as a concession) will decline.
Negotiate concessions or counteroffers immediately.
Keynote # 3: Never Offer to Split The Difference
A great sales negotiator is able to satisfy all their client’s wants and needs while making their opponent feel like they won. You will be faced with many situations that will attempt to challenge this, the sales game is tricky, you cannot let your guard down.
“Equal” concessions do not often reflect the opening negotiating positions of the opponents. Say you are the seller and you have a bracketing strategy in play, you over-value the property and an inexperienced buyer comes to try to negotiate. Although you two met at “the middle ground” , it clearly is equitable for the opposing side.
During the negotiations, never offer to split the difference, instead encourage your opponent to do so. You can do this by stressing over the time like saying, “look, how much time we have both spend on the negotiation”. By getting the other person to offer this split, you have put them in a position to suggest a middle ground. You can then use this to your benefit by asking for more benefits because they put that offer on the table first.
You should never put this offer down first as it will give them the upper hand over you during the real estate negotiations.
Keynote # 4: Eye Your Trade-offs
Just as you did with the value of service principle,you will be immediately asked for something in return when a buyer asks for a concession while negotiating. The reason for this is, if you ask for a concession one or in some cases all of these three things will happen:
- There is the potential that you will get a significant concession
- You elevate the value of your concession by demanding something in return
- It stops them from constantly coming back for more in the real estate negotiation, they will just agree to the terms
The important part to remember here is to refrain from asking for something specific. Let the other party make the concession offer.
Now that you have finished part two of this insightful real estate negotiation series, you will start to notice how you can implement these techniques to your benefit during real estate negotiations. With this industry being a very lonely one, it is up to you to keep persistence to help you in becoming a top agent.