There’s no greater test for a realtor than handling the negotiation process. This is the stage of the deal where he/she has to detach themselves from both the client and the potential buyer/seller. In this regard I have compiled a list of 10 rules that have guided my negotiations over the years. Hopefully it will also guide you to some of the best deals in your realty career.
1. The Guy With The Cash Usually Wins.
I’ve tackled many fish in my years and I can guarantee you that this tip always works. It doesn’t matter whether you’re trying to push of a commercial property or a luxury condo, always bring cash. Understand that the main reason people sell their property is to get some cash. With this in mind, the party with no cash will be desperate to close a deal even at a loss just to get the deal done. Make sure that either party has a sure way to finance the final deal and you’ll always know who is the winner from the onset.
2. Automate the Grunt Work.
In my earlier years I lost a large chunk of my valuable time trying to chase deals. The reason? I tried to do all the paperwork by myself. For this reason I would advise you to invest in an automated software solution. It will create more time for you to earn a decent commission while still enjoying your work hours.
3. Emotional Intelligence Is Key.
I’ve seen so many of my clients lose out on great deals because of their lack of control over their emotions. As a result I would advice you to learn how to detach your emotions from the bargaining process. Moreover you must learn how to read the emotions of others so as to gain an advantage. This is a skill that very many professionals in the realty business lack, develop it and you will soon be a master of negotiation,
4.Listen more, Talk Less.
Realtors often make the dreadful mistake of refusing to listen to the client and prospective sell/buyer. This is why we must learn to listen more and talk less. Entertain your potential sell/buyer and let the expose as much information regarding their situation. This will give you an opportunity to identify a point of entry for your final deal. Remember that information is power and the party that uses it well usually gets a better deal.
5. The first offer is all that matters.
It doesn’t matter how many you emails you send or how many calls you make, the first offer is all that ever matters. In this regard we must always let the opposing party make their offer first as It will give us a clear indication of our standing in our negotiation. It will enable us to curve a route towards a price that makes a tidy commission while still making the client happy.
6. Manage Expectations.
Ensure that you have received a target price from your client and the prospective sell/buyer. This will enable you an opportunity to manage the expectations of both parties. You can then manage expectations on both sides and therefore increase the likelihood of a successful negotiation. Set the tone for both your client and potential seller/buyer so as to avoid and disagreements and unnecessary tension that is common when money is put on the table.
7. Work With Deadlines.
You don’t want to become the realtor who takes three years to close a deal, trust me. Make sure you always set a realistic date for both your client and prospective buyer/seller. It will create a sense of urgency and inspire both parties to find a middle ground. In addition to this I have some time been forced to set penalties if I sensed that something could go terribly wrong. Not all parties that you enter a negotiation with will want to paly fair, protect yourself.
8. Delegate and then delegate some more.
Now that you’ve automated the mountains of paperwork it is time to increase your efficiency by delegating more task. For instance why should you spend useful hours filling legal documents when you could delegate that work to a clerk or assistant? This will enable you to build a team that works well together and gets deals over the line. Don’t worry about sharing your commission, there’s always enough for everybody when deals are going over the line.
9. Know when to walk away.
Develop the tenacity to use the word ‘No’. It will give you the ability to walk away from bad deals. Understand your niche and note all the red flags before letting a deal go through. Some deals will eventually turn to losses. For instance if your client quotes a very high price tag for their average home, walk away. That is an unrealistic client that will waste your time and eventually lose you potential commissions. Write down all these warning signs and develop a system to ensure that you don’t repeat the same mistakes.
10. Let The Numbers Talk.
When all is said and done we have to admit that the real estate business is all down to numbers. Stick to your data and let it inform your decisions. It will help you discern what are facts and what are assumptions. Use the numerous online resources to source your date and present it to your client to help them understand what the market deems appropriate for their property. For instance, if every property on the island costs $10,000, why should your client demand $25,000? Let numbers bring in a sense of reality to simplify the negotiation.
These 10 rules have guided me towards some the biggest commissions in my long career as a realtor. They have helped me identify good deals and following through on the sale. Moreover they have enabled me to develop discipline which has in turn created professionalism. If you read them on a regular basis and put to practice what I preach then you will sell a ton of property.