Negotiation is the life’s blood of the real estate world. It is one, if not the most, important skill that someone can possess as a buyer or a seller, and it’s a skill that can always be improved upon. Knowing how to negotiate can make a significant difference in your transactions as you explore the real estate market.
Here, we want to explore the art of the negotiation and help you hone in your skills to make you become a master negotiator!
Research and Prep
Making sure you’re always the most well-informed person in the room can be a strong suit. Successful negotiation skills start with tons and tons of research about a multitude of aspects. Local market conditions, recent sales in the area, and any unique factors that may impact the overall value of the property are things you should consider looking further into. Being knowledgeable can provide you with a solid foundation for the negotiation process.
Establishing Clear Objectives
Define your goals. Before entering into any negotiations, your goals, objectives, and priorities should be rock solid. Are you looking to negotiate price? Repairs? Speed up the closing process? Identifying these necessary questions can help you stay focused and on track with what you want to achieve.
Know When to Make the First Move
Knowing when to make the first move in a negotiation can be crucial. Setting the tone in the meeting can make the negotiation turn in your favor, as well as mounting the tone for any future negotiations, be it that is needed. Survey the atmosphere and determine whether you need to be aggressive or chilled, full-on or laid-back. It’s strategic to observe the other party's position before presenting your offer, assessing the circumstances can help you determine the best course of action.
Leverage Market Knowledge from Research
By researching and being in the know about the current state of the market, you can be supported heavily in your negotiation position. Highlight the recent sales in the area and what prices they went for, current trends in the market, and property specifics you found while researching that can justify your offer. Data-driven approaches will add credibility to your negotiations and strengthen your position.
Be Flexible, Creative, and an Active Listener
Negotiating can often require flexibility and creativity when it comes to reaching an agreement between the two parties. They can also require the negotiator to be an active listener—to listen to the other party’s concerns and hear them—to get the desired results they wanted. Consider all the options the negotiation may take that could satisfy both parties interests. For example, if the seller doesn’t want to reduce the price, listen to their hesitations, process them, and look for a win-win solution that works for everyone!
Build Trust and Rapport
Trust is the most important thing for most people, especially people dealing with negotiations of the selling of their home. Building trust and rapport with the other party can create a collaborative environment that they feel comfortable in and will listen to your negotiations, whatever they may be. A positive relationship being established will cause a greater willingness to find a solution. Be professional, be respectful, be in the moment, and keep a good attitude throughout the entire negotiation process.
Know Your Walk-Away Point
Before you even get to the negotiation, know at what point you’re going to walk away if the terms of the negotiation aren’t in your favor or aren’t benefiting you. This can be the price, the terms, the rapport, anything that is hindering your ability to proceed with the negotiation. Knowing your limits will help you avoid making bad or uninformed decisions you won’t be happy with in the future. Stand firm and hold your ground, while remembering to be respectful and open-minded. If anything exceeds your comfort level, walk away.
Mastering the art of negotiation, especially in the realm of real estate, is a skill that can be mastered with the proper research, dedication, and practice of active listening.
It is a valuable skill that can lead you down the path of successful transactions, and ensure you can navigate negotiations with the utmost of confidence in the future!