Simple Ways to Handle Real Estate Price Objections Today

In commercial real estate, as an agent you will have many challenges with price objections across real estate transactions, listings, and inspections.

Ultimately the buyer wants the best outcome for themselves and not a ‘fair’ outcome based on real estate market evidence. Somewhere in the transaction will be your client and their property requirements and challenges.

So, handling price objections becomes a common element of progress for all agents in and through any property transaction. Are you up to the negotiation challenge of being the best agent solution for the client?

Negotiation Factors to Watch

Remember the core elements at the outset of any property negotiation situation. They will be your client’s instructions and the intention of the parties.

Clarity is critical when handling property matters and any negotiation as part of advancing and closing the property transaction. So, take plenty of notes as you work with any price negotiation.

The best agents are always prepared to handle the ‘price challenge’ problem. Some factors will help control the price discussion. Here are some ideas on that to help.

1. Explore Price Intentions

Different people will have different intentions regarding the property transaction and the opportunity it presents to them. Somewhere in there will be your client and their instructions.

Both parties to a property sale will have limitations on the outcomes, usually monetary. When it comes to any disagreement, discussion, or documentation, go deeply into the facts and situations that apply to each party and the ultimate transaction.

You are trying to flush out any potential disagreement or misunderstanding with the property negotiation that could occur now or in the future. Take plenty of notes as you explore your questions and responses to and from each interested party.

2. Hurdles and Challenges

Expect disagreements to occur in real estate, so remove any hurdles or challenges early in the property discussion and all the listing representations made.

It is wise to note any comments received and made, and you can do that through a supporting or follow-up email. When in any doubt on a property matter, ask more questions of the people you are working with.

3. Local Property Market Evidence

It is hard for another party to dispute market evidence from another sale situation in the location for the same property type. How you display the information is the key to using it.

Have the numbers and comparisons ready but try and use an additional graph display related to the property type or history. Ensure that the trends are easy to see and show. The visual approach works well in commercial real estate price negotiations.

4. Qualify Capabilities and Timelines

Typically, a property transaction can take several weeks, if not months, to reach finality. As the agent working for the client, establish a timeline for the expected events leading to settlement, and question the approval processes and the documentation to support the timelines.

Ensure that the parties to the transaction are prepared to facilitate the approval processes within the agreed timeframes. That could be with finance approvals, inspections, and or due diligence.

Also, consider the realities of the nominated time frames and the chances of final success within the dates agreed. Some people do not give enough time to the required approval(s) and ‘subject-to’ documentation.

5. Detail and Explore Subject-to Provisions

Detail and fully explore any subject-to-provisions – one or more parties to a property transaction will likely have special conditions or provisos they want to seek and apply. This could be regarding or as part of their offer and/or acceptance.

As you move towards some written formal offer situation, ensure that any subject-to provisions are clarified, achievable, and accurately documented.

Once made, the agreement to any real estate transaction, whether in writing or verbally, is hard to change and legally disruptive in both cost and risk to all parties. You don’t want to get ‘stuck’ in a property dispute or disagreement.

Golden Rules of Negotiation and Handling Price Challenges

So, there are things to do in your real estate transaction as you consider working through a price objection and property negotiation.

Expect the parties to have opinions and limitations with the real estate deal. Seek to understand the other parties and the elements of restriction or hurdles in the transaction.

When you know all the elements and concerns that people have, a compromise in the property transaction is quite possible.

Apply your negotiation rules for each property and client situation.