Negotiating happens in just about every part of the real estate business. Sometimes the process is easy, and other times it is complex and challenging. You can build strategies to help.
As agents and brokers, having a comprehensive skill set around negotiation is a good idea. Think about practicing skills around that.
Property market conditions change through the year and over time. On that basis, the things we must negotiate through always vary. Not all items will be agreeable to the parties to a property transaction. As agents and brokers, we bring the facts to the discussions and the recommendations to our clients.
Knowing the Client and Property Market
Let’s face the facts, properties bring unexpected points to work with, the client has targets they want from the transaction, and the property market has trends that will impact any sale, purchase, or lease situation. All factors affect others.
Knowing what is happening in the property market is the first step towards helping clients with their property challenges. Information and evidence from the market are something that you must work with.
Here are some strategies and ideas to help your next property negotiations flow with more control and potentially towards a positive outcome.
- Researching the parties – Understand who your client is and what they want in the transaction. Sometimes that target may not be realistic, so working with that will require a complete understanding of all the people, the situations, the pressures, and the priorities. Asking real estate questions and creating conversations will always help with understanding those things. Make your notes as you gather that information and have those meetings.
- Gathering full market evidence – Transacting a sale or lease successfully will always impact the local property market relative to the property type. Keep focusing on other listings and compare prices or rents to use those facts when questions and opinions arise. Typically, your client will want more money than the property market will give, and the buyer or tenant will limit their offers and negotiations. How can you work with that? Have all the market evidence at your fingertips.
- Knowing the comparable property alternatives and locations – Knowing the location directly follows the previous point. Take that information to the next level by analysis of improvements, services, and amenities. Every property will have notable improvements and design factors that can vary your comparisons. Any successful real estate transaction must be centred on all the evidence from the location.
- Having clear and accurate documents prepared or checked – In a lease, sale, or buying situation, capturing the parties’ intention requires a ‘signing’ of the papers. You don’t know when that offer situation will arise, so have access to the paperwork and the legal documents that can take the offer forward. Before you get to the ultimate offer, title searches, plans, property history, and ownership investigations should be made early in any listing situation. Finally, prepare for the documentary process. Always be prepared.
- Understanding perspectives and an awareness of the client’s position – The client pays the commission and will not want to do that if all matters are not handled well for them. On the other hand, a happy or informed client is likely to face reality when it comes to the final transaction. What can you show, say, and provide that will help the client move forward towards a transaction result? Property market realism will usually flow into the client discussions, listings, or negotiations. How you handle that is important.
- Face-to-face connections – Always try to meet with people as part of a property transaction. Sometimes that isn’t easy. However, you must do whatever is required to communicate the facts correctly at the right time. Meeting with people will allow you to see responses and read their ‘body language’. Remember that any discussion can be critical to the ‘end game’ and agreement.
- Questions and note taking – From the previous point, taking notes from what is said and done will help you stay on task and move to a better bargaining position. Reaching an agreement is the ultimate focus for you and your client. Sometimes you can move through a few offer and counteroffer situations between the same parties. A successful property sale, purchase or lease is usually a negotiation compromise for all parties.
- BATNA concept – This terminology is well-known in the business community. It simply means that you should be aware of the situation alternatives without agreement between the parties. What is the fallback position for either group, or how will that impact your client? BATNA means ‘best alternative to no agreement’. Be aware of the concept and consider it. You may have to fall back to the BATNA position of your client or the other parties.
- Clarify and restate important facts and steps forward – In a negotiation, clarifying matters in a discussion and restating key issues before proceeding is helpful. In that way, the others in the transaction can see and hear that you understand them. Client trust and respect are built from that.
- Provide clear steps for all parties to progress – The parties to a property transaction will generally focus into one issue, and that is getting the result that they want. Do you know what that is? Beyond that point, they will not be attentive to documentation, progress, dates, and legalities. As the agent of the transaction, and in your position acting for the client, be prepared to nurture and push people through the stages of negotiation progress in the agreed transaction. There are many steps to progressing a property sale or lease. You are the catalyst to make it all happen.
So, as a real estate agent, you are the ‘facilitator’ of a property transaction. ‘
Real Estate Facilitator
Consider all these issues and use them to your advantage when advancing a property sale or lease through negotiation.
Add to the list other notable facts that apply to your property type and location. Ultimately, that will help your outcomes with listings and transactions.