With the rise in property prices, it is becoming harder for real estate agents to find a decent deal for their clients. Many of them are increasingly struggling to make it work. As a real estate investment agent, you get a commission after closing a deal. Therefore, your income will be dependent on your ability to successfully close real estate deals. And you want to make sure that you get the best possible deals for your real estate clients.
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In a competitive real estate market, it’s often the best real estate negotiator who walks away with the best deal. Your negotiation skills can make the difference between a successful deal and one that falls apart. This is one thing that most clients consider when looking for hot real estate agents. Therefore, to be a successful real estate agent, it is crucial that you learn how to be a great real estate negotiator. Each real estate negotiation will be different. However, here are 7 proven tips to sharpen your real estate negotiation skills:
1. Be Positive and Confident
Your attitude will influence the success of your real estate negotiations. A good real estate negotiator maintains a strong and positive attitude, even when things are not going according to their expectations. Since we often attract the outcome that is in our mind, it is important to keep your thoughts positive. When you expect success, you are likely to achieve it.
Sometimes you may be desperately in need of the commission for that particular real estate deal. Nevertheless, do not act out of reactive fear. The other party will often sense your fear of losing the deal and may take advantage of that. Therefore, no matter the situation, never let emotions get in the way and blur your judgment. Always deal with the facts of the situation and never be emotionally attached. Have a pragmatic evaluation of your options and keep an open mind. It’s a business deal like any other and not a matter of life or death. If it fails, you will sooner or later close another one as long as you learn from your mistakes.
2. Negotiate in Person If Possible
Generally, people prefer to do business with those they know and trust. It is a lot easier to forge a connection with someone in person than online or by phone. Whether consciously or unconsciously, we react more to other people’s body language and voice tones than the words themselves. It’s often not easy to understand someone’s intentions when negotiating real estate deals through text or email. Sometimes the other person may even get offended by a comment that was meant to be funny or was truly neutral. Therefore, meeting in person will give you a competitive advantage over other offers that are faceless and anonymous. There are some situations where it may not be possible to meet the other party before making an offer. In such situations, a video conference would be much better than a phone call.
3. Check Your Body Language
This real estate negotiation tip relates to the previous one. To become a top real estate negotiator, you need to be conscious of your body language. When you negotiate in person, the other party will be looking at your facial expressions and read your body language. If you sit with your legs and arms crossed, you convey to the other party that you may be closed-minded, irritable, or hard to please. Make sure you have an open posture whenever you are at the negotiating table. You should also smile and maintain eye contact as much as possible when talking to them. This makes you seem more trustworthy and honest.
4. Make the Other Party Feel Comfortable and Appreciated
Everyone wants to be liked and feel appreciated. If you are likable and make the other party happy, they will also want to see you happy. Where appropriate, a real estate agent shouldn’t be afraid to make the other party laugh or smile. Be free to show your good sense of humor. Also, be sure to complement and flatter them. However, make sure the compliments are genuine and related to the negotiation. Once you make the other side happy, and they feel appreciated and at ease, they will lower their defenses and become more receptive. As a result, you will have a better chance of getting a deal that is mutually beneficial.
5. Learn the Motivation for Both Parties
To be an amazing real estate negotiator, you also need to master the art of research and preparation. Prior to negotiating, learn who your client and the other party are and what they need from the deal. Revisiting the motivation for both parties will influence how you plan your negotiation strategy. A real estate negotiation will often be fruitful if you can fulfill the underlying motivation of the property seller and the property buyer. You should never enter into a real estate negotiation without knowing as much as you can about both parties.
Start off with your real estate client. What do they care about? What do they want from the deal? Ask them questions to know what will satisfy them for it to be a win-win deal. On the other hand, knowing the other party’s objectives and needs will enable you to know which options to offer to have a win-win outcome. When you understand where the other party wants to go with the negotiations, it becomes easier to get there.
Related: A Guide for Effective Communication with Your Real Estate Clients
For instance, if you are a buyer’s agent, you would want to have answers to these questions: Where is the property located? Who’s the property seller? Why are they selling at that point in time? Are they living on the premises? Was it an investment property? How quickly do they need to sell the property? How many offers have they had? What are their terms? Sometimes sellers will accept a far lower price if the deal can be settled within a short time frame or offers other non-financial benefits.
6. Find Common Ground First
To get a leg up as a real estate negotiator, you should first state the common objectives before you explore the differences. For instance, what terms or conditions are favorable for both sides? After getting a list of the items that both sides agree on, you can then work out the other issues that need some form of compromise. If the other party doesn’t agree with your options, provide them with alternative options. However, make sure you back your options with solid reasons.
7. Earn the Deal
Far too many beginner real estate agents make the mistake of aiming for an offer that the other side will accept. A real estate negotiator should never fear friction and give the final say to an opposing agent. Instead, they give the other side an offer they can counter. Nothing is more frustrating than securing a deal straight away, with little or no resistance from the other party. With no going back and forth, both parties often end up feeling like they should have negotiated a little harder. The other party is likely to back out of the deal and shop around for a better offer since they feel like they gave in too easily.
To avoid that nagging sense that you could have done better, simply ensure you always get the last concession no matter how small it is. For example, when helping your client buy a property, your initial offer in a home purchase should be low enough so that you are left with enough room to go up while still ending at a reasonable price. This gives the seller the chance to negotiate and feel like they got a fair deal. If the seller’s final asking price is within your budget, ask for an inspection contingency, a specific date to close, etc. Always try to give your client the final say in the deal. The other party should feel like they fought hard and won. As long as the other party feels like they won, they will try to make sure your deal goes through and is closed.
The Bottom Line
Being an excellent real estate negotiator is one of the most important real estate agent skills to have if you want to start closing a lot more real estate deals. The good news is that, whether you are a beginner real estate agent dreaming of your first deal closing or a pro agent, it’s possible to improve your real estate negotiation skills. With simple shifts in action and thought, any real estate agent can master the art of real estate negotiation and boost their real estate agent career.
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