Do you want to be an expert negotiator? It is a great skill to have that can navigate you through some of the most important times in your life, like when buying or selling real estate.
Lets face it, the art of negotiation is dying because in most of everyday life it is not expected or common. For example, when is the last time you went into a supermarket and when the cashier said “that will be $38” you replied with “make it $35 and you got yourself a deal!”.
This article is designed to give you a base to launch from as I take you through the three steps anyone can master! Even if you know nothing about negotiation, sticking to these will get you on the right path.
1. Honesty is KEY.
If someone knows you have lied to them once, the negotiation will be over. No one likes being lied to, and you will have lost any chance you had of bettering your position, if the deal is even still alive.
Mutual trust is key to a smooth negotiation! Take property as an example, if the agent you are dealing with told you they had an offer of $1,000,000 on the home, and you found out they were lying, how likely are you to trust them again during the negotiation? and how likely are they now to achieve the best possible price for their client? Lying in a negotiation is code for “I have no idea what I am doing”, so regardless of what an inexperienced negotiator will tell you, steer clear of this “tactic” at all costs.
2. Know your product.
What is better about it? Have you explained all the features and benefits? Is it a lesser product but at better value? You need to give the party you are negotiating with the confidence to do whatever they can to secure the deal.
I remember speaking with a real estate agent who was struggling to get the buyers and sellers to agree on price. He was only $50K off getting the deal done but no one was budging. After a few questions I found out he hadn’t told them that the house had floor heating! There is $100k worth of value he was hiding from the buyer and keeping from the vendor because he was too focused on his commission and not their maximum profit.
If you are buying a property, how are you going to demonstrate to the agent and to the homeowner that your offer demonstrates fair market value? Know the sales around the area, understand the current market conditions, get an idea of the level of finish the home has and try to gain a deeper understanding of what you are buying. If you just shoot in with a low offer and hope for the best you are going to lose credibility, and annoy all parties involved.
3. Have the goal of building a relationship, not getting whatever you can out of the other party.
No one likes to feel ripped off. Your goal should be to get a great outcome for yourself or your client while allowing the other party to feel happy and excited that the deal was completed. The key to surviving in business is referrals and repeat business!
You often see a real estate agent boasting on social “SOLD FOR $500,000 OVER RESERVE”. Stop for one second and think… how would the buyer feel if they saw that? Do you think they would feel good and want to work with you in the future?
If you are buying a property, understand that a good relationship with your agent and in turn the homeowner will go a very long way. I have had a vendor turn away an offer $125,000 more than the second bidder, simply because he didn’t like the way the buyer had conducted themselves and felt very disrespected.
A great tip is to write a personal letter to the homeowner about why you love the home, and how you plan to get the most out of living there. However, remember rule number 1, if you don’t mean it then don’t say it! This will work against you every time. It is easy to tell when someone doesn’t truly mean what they say.
Books and courses on negotiation are great. But all of that is 100% useless to you if you don’t first master those 3 steps and stick to them in every situation.