Negotiation

Sales MeetingDecember 1, 2010

Video

Negotiation Skills- Communication Training

Commission Negotiation• What if the Seller wants to pay you a lower commission?

– ask questions to understand why– if you don’t want to accept that lower fee you have to try to

show them why it’s not in their best interest to pay you a lower fee

– Focus on the Seller’s needs:• Don’t Say: I spend a lot of money on advertising so I need to charge

a higher fee to pay for that advertising.• Say: The extra advertising and marketing we do helps us average a

2% higher sales price for you in half the normal time.• Say: I know you can get a lower fee elsewhere but what have you

really saved if you get a 1% lower fee and a $20,000 lower price for your home because the other agent isn’t a trained negotiator?

Trust

• Most important strategy in any negotiation• Buyers and sellers know that the other party has

interests that are in conflict with theirs• Establish common ground:– Communicate that they have a common hobby, the same

type of job, etc– Present evidence that your clients are qualified to buy the

property– Never delay your counteroffers. Show respect for the

seller's time.– Communicate that the buyer appreciates the home.

Ego

• Never run down the sellers' home– Don’t:

• Point out faults and deficiencies

• Explain why the home is not worth the price

• Anchor your offer price to market data

Stay on Their Team

• A united front is a strong negotiating position

• Example: The wife may love the house, but the husband wants to negotiate the price

Keep a Grain of Salt

• Not everything you are told is true– contract has to be in this

quarter– the price is going up– 1% bonus for contract

this week

Little Things, Big Difference

• Slower Pace - The sellers were a couple in their 90's. Since they did not leave the house, the buyers met them several times. The buyers took extra time to sit down and talk, and formed a strong bond.

• Holy Ground - The sellers had a small grave for their dog on the property, which they were very sensitive about. The buyers realized this, and sent word that they would leave it in place.

• For the Birds - The sellers had numerous bird feeders on the property. The buyers keyed in on this, and offered to continue feeding the birds.

Discuss This…• Get better negotiating power by discussing these items

before sending the offer:– How is the market in general? How are other actives and

recent sales priced? • How long has the home been on the market? Have there been

price changes?

– Did the house sell recently? What was the price?– Is there a time deadline that must be met? Would a pre or

post lease be desirable?– What is the appraisal district value? The taxes? The HOA

dues?– Is a disclosure available? A property inspection? A survey?– Are there any offers expected, or on the table now?

Understand the Seller

• What are the pressures on the seller of this house?– Down Market– New Job, Need to move– Already made an offer on a new home– Facing Bankruptcy

Plan B

• Identify several other properties the client would be happy with as well– Save you from giving in to whatever the seller

wants• Puts the pressure on sellers if they know you

have other options

12 Ways to Become a Better Negotiator

• 1. Learn everything you can about the situation, the issues, and the participants.

• 2. Understand all the participants’ needs and interests.• 3. Set reasonable goals for what you hope to achieve

during the negotiation, and rank them by priority.• 4. Work within a range that includes minimums,

targets, and maximums.• 5. Anticipate the other parties’ comments and prepare

your responses.• 6. Remain calm, pleasant, and unflappable.

• 7. Build trust by clearly stating what your client wants and respecting what the other parties want.

• 8. Create an atmosphere of joint problem solving that focuses on the benefits to all parties.

• 9. Remain flexible and open to a range of options.• 10. When other people speak, listen attentively and hear

them out fully.• 11. Use empathic comments and sympathetic gestures

and facial expressions to smooth over difficult situations.• 12. Always underpromise and overdeliver.

12 Ways to Become a Better Negotiator

Negotiating Tactics

1. Silent Treatment– Silence makes people uncomfortable

2. The Flinch– Small sound or facial expression that communicates

displeasure

3. The Deadline– Create Motivation, Stay on track

4. The Competition– Remind seller that buyer liked many other properties

5. The Departure– Gather papers if negotiation has reached a deadlock

Types of People in Negotiations

1. Verbalizers– Talk through issues– Emotional

2. Convincers– Want to “win”

3. Rationals– Not emotion based– Want written details

4. Reasonables– Easy going– May require more hand

holding

External Features that Influence Negotiation

• Market Conditions• Properties Physical

Features• Buyers Personal Tastes

Negotiation Ideas• Keep the earnest money deposit receipt in your

hand when you are telling the sellers about the offer.

• If you’re not sure you’re getting the best deal, stall. Many buyers and sellers get nervous when the other party hesitates.

• Explain the risk of rejecting an offer. If the sellers are presented with an offer of $149,000 on their $150,000 house and they counter at $150,000, they are gambling $149,000 to gain $1,000.

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