“Let us never negotiate out of fear. But let us never fear to negotiate.” – John F. Kennedy
Real estate negotiation is one of the biggest factors in a successful real estate transaction, yet it tends to be one of the least discussed topics between agents and clients. After first obtaining my real estate license, I immediately enrolled in formal high-stakes negotiation training which I periodically refresh each year through new courses. In the highly competitive Portland Metro real estate market, agents must be prepared to advocate and negotiate for their clients – “Bidding wars” are common and you should expect to go through several iterations of counter offers before you reach an agreement. As you can see in the flow chart I created below, negotiation takes place at nearly every step of the real estate transaction.
During my most recent training with the Real Estate Negotiation Institute, they reported that of polled home buyers, 82% said they want a real estate agent who can help with negotiations, however, only a meager 3% of agents have formal training in negotiation. Before signing with an agent, when you’re performing interviews, one of your first questions should address their experience with negotiation. It’s important to know that the biggest transaction of your life will be handled by a skilled professional. Below I’ve listed 3 negotiation skills your agent should be fully versed in to complete the most successful transaction possible.
1. Pre-negotiation fact finding is key
Learn to communicate, discover, gain knowledge, and ask MANY questions to learn the opposing side’s point of view. Skilled negotiators spend 39% of their process on learning through strategic investigation.
2. Learn to recognize the negotiation tactics of others
Everyone uses different negotiation tactics – you need identify what type of tactic the other party is using, and how to handle it. For example, when someone has a competitive negotiation style, recognizing and verbalizing your awareness of this tactic can often disarm them.
3. Know your Best Alternative To Negotiated Agreement (BATNA)
One of the most important tools in negotiation is your BATNA. You should always show the other party that you have more options, which may take different forms. Constantly be assessing your BATNA, and test it.
Negotiation is one of the most important facets of the real estate buying/selling process, but it’s often given the least attention. Clients should not pay (literally) for the inexperience of a real estate agent in a high-stakes negotiation situation. Protect yourself by making negotiation a priority in your preliminary discussions with potential agents.
One of the most satisfying aspects of my job is successfully negotiating the best possible deal for my clients. Want to continue the negotiation conversation? Send me an email at firstname.lastname@example.org or leave me a note in the comments below.