14 Negotiating Tips Part 1

14 Negotiation Tips - 7 Do’s and 7 Dont’s

“Let us never negotiate out of fear. But let us never fear to negotiate” John F. Kennedy said during his Inaugural Address, (55 years ago)January 20, 1961  - I love this quote because it reminds us not to let fear stop us from fully expressing ourselves and encourages us to put in our order - to ask for what we want and in doing so realize the answer is no if we don’t ask.  We’re all on a journey to live a fulfilled life, and if we can step back and understand, we need to look at the big picture when we are approaching a negotiation we’re more likely to have a favorable outcome for all parties.

A recent Forbes magazine article of the top 5 reasons consumers hire a Realtor was to assist with negotiations. This was #2 only behind accessibility to inventory and a convenience factor.  This means, even though other topics like price, fees, and more trivial questions come up early in the conversation with potential clients, consumers desire finding an agent that has strong negotiation skills to represent them. That said, let’s look at the top do’s, and dont’s I’ve learned over the years when it comes to the negotiation process.

 The Do’s:

1. Talk less, listen more - Often when we hear someone is a great negotiator we have a tendency to associate this with someone who is a “smooth talker”. That’s not always the case. Negotiating isn’t always an outward thing...it’s also what’s going on inside that’s not seen or heard. Yes, while having great communication skills is an attribute to be a successful negotiator it’s also a person's ability to ask great questions and have exceptional listening skills that make them awesome at negotiating.  I’ve learned first hand over the years that when we approach a negotiation in a relaxed manner, keep our cards close to our chest and allow the other party to talk, they often tell us what we need to know to make our next move.  We can only learn this if we’re willing to let others do most of the talking, this is where most people fall short as they don’t know how to just remain calm, quiet and patient.  You’d be surprised how much people talk and talk and talk if you just learn to be slow to respond and quick to listen closely for clues to help you with your next move.
2. Remember win-win or no deal - Ok, I realize that not ever deal will go this way. I’m suggesting that if we’d keep this concept in mind and through our influence we can bring a tone to the negotiations that can set up positive energy and allow you to have a path of less resistance. This also helps us keep our clients expectations under control or from getting unreasonable and out of control.  It may be my utopian world, and when everyone feels they’re being treated fairly it makes not only for a smoother negotiation, it also will set up the next 30-45 day closing period to have less conflict or need for feelings of retaliation for what was said or done early on in negotiations.
3. Eliminate emotion - Don’t take things personally and check your ego at the door - I understand, it can be easier said than done. Here’s what we know, chances are the other party is going to bring all of these emotions into the picture, so, when you do as well it’s double trouble.  I was coached long ago to always be the calming force in every transaction.  Take a step back and look at the parties to the transaction. We have the buyer and seller, and we know moving makes the top 5 list of the most stressful things people do in their lives, add the agents in the mix with a varying degree of experience and most time really needing that commission - and then round things off with the often tricky process of navigating the mortgage.  It’s a miracle we all get the deals closed we do with all that highly volatile energy flying around.  This why I have taken the advice I was given many years ago... to be the calming force in the transaction...if you don’t who will?  Having the proper expectations will only help you reduce stress and keep a level head while working with all the various personality styles that you’re bound to come across during the transaction
4. Be prepared, do your homework - In previous episodes we’ve covered the 5 P’s - prior, planning, prevents, poor performance. It couldn’t be more true than while negotiating.  How can we prepare? Of course we need to know obvious terms the deal like pricing, closing date, contingency timelines and assuring financing is in place.  There are also some less obvious factors to take into consideration.  A few of these could be knowing how long the other agent has been in the business, their approximate age or maybe what they have done in a previous career. The more we can understand who we’re working with, the more we are in a position to effectively communicate with them. Others may be what ultimately are the other parties hot button(s)? Why are they buying or selling?  What do they have to gain or lose and in what timeline all comes into play. Knowing this is leverage for you when navigating through the negotiation. We gain this information by learning how to ask questions.
5. Seek to understand, not only to be understood - A big reason that leads to misunderstanding is we aren’t listening to understand, we are listening to notice when the other person has stopped talking so we can make our next statement and get our point across. Usually, real estate agents are moving at a very fast pace and can innocently miss something in conversation as their minds are 50 feet in front of their body. When we take a step back and slow down, we’re also less likely to miss something in conversation that may be a key piece of information. Perception is reality so the key here is even if we don’t agree with what we may be hearing, working to be absolutely clearly on what’s being discussed is critical to prevent us from “thinking” we’re on the same page when in fact we’re going in opposite directions based on a misunderstanding.  Clarity is power and the way to gain clarity is by asking questions like, “tell me more about that” or saying “so what you’re saying is” and repeating what’s been discussed to assure you are receiving the intended message. Seeking to understand doesn’t have to mean you’re in agreement, it means we are at least getting accurate information communicated through all parties. I would venture to say this is a huge reason for a breakdown in many negotiations.
6. Know who you are speaking with and communicate in their style - This is a more advanced skill and one that has been invaluable to me over the years. For example, I always want to access what type of personality style the other agent and seller/buyer is leading with or demonstrating. Having this skill will help you tremendously and can be learned like anything else with proper study over time. Using the DISC profile in this example, what is the leading style of the other agent? D- dominant, bottom line oriented, low emotion. I - High energy, out-going - people oriented, S- Supportive, avoids confrontation, agreeable, C- task/detail oriented, analytical, perfectionistic traits. Knowing how to quickly identify this by language patterns, tonality and or body language can be a huge advantage to you in how to approach and deal with others in a negotiation.  You can find more information about this online and there are many books available as well.  Maybe we will do a future episode on this topic.
7. Be patient - let time work it’s magic - This is something I learned over time (no pun intended) I call it ping-pong negotiations. Let me break down what this looks like.  An offer is prepared and sent to the seller/listing agent.  The listing agent presents the offer, and the seller submits a counter offer to the buyer. Then immediately, the buyer submits a counter offer to the seller. This may happen a few times. Then, negotiations come to an impasse, and the two agents are going back and forth and back and forth with no movement forward.  Often, some time passing can allow all parties to take a step back, let high emotions come back down to a more reasonable level and each party can reflect with a clear mind what’s at stake.  What happens is when both parties aren’t allowed a chance to take a breath,  I have sometimes found its can become more of a matter of people digging in their heels or unconsciously being difficult out of frustration vs. working towards a more reasonable outcome. This happens we people feel pitted against one another.  We have to remind our clients not to take things personally.  Each negotiation has it’s own set of circumstances, and I realize there are times when it’s necessary to be timely with our communication.  When the opportunity presents itself, this approach can work in your favor. Allowing everyone to sleep on it can actually bring them closer together. When you can let doubt creep into people's minds and get them more focused on what they may lose vs. what they’re pushing hard to gain, you can create leverage and close the gap or better yet, make the deal happen.