The crux of real estate transactions is that the seller wants the highest price while the buyer wants the greatest value (and typically a lower price). A real estate agent’s skill is in using negotiation strategies for an overall deal structure that best satisfies their client.

During negotiations, agents will be looking at different terms, which include price, contingencies, and timelines.

Negotiation Expert Calum Coburn advises:

“The nine negotiation strategies shared in this article have been successfully deployed globally in residential, large commercial, and industrial real estate deals by our graduates. So I urge real estate professionals to take a negotiation class to practice these and other strategies.”

 

1. Prequalify Clients

 

1 of the top 9 real estate negotiation strategies is; Prequalify Clients. Read more...Click To Tweet

 

Prequalifying your clients can mean the difference between making a sale and wasting your time. If you want to make more deals faster, ensure that the buyer can pay the price.

At the prequalification stage, you haven’t discussed the sale price yet. However, you should at least have a ballpark figure depending on the seller’s asking price and market value. Verify that the prospective buyer can afford the property. Conduct credit checks before you show the property.

Prequalifying your buyers also makes the pre-approval process easier after you have agreed on a price. In this way, the buyer will know what documents and amounts are needed when applying for their mortgage.

Apart from the property price, the fees that buyers should cover can include:

  • Appraisal fees
  • Credit application fees
  • Title insurance
  • Home inspection and re-inspection
  • Escrow fees
  • Mortgage origination fees
  • Property taxes

 

2. Do Your Homework

 

1 of the top 9 real estate negotiation strategies is; Do Your Homework. Read more...Click To Tweet

 

Every bit of information you can gather about the property and the client can prove useful during real estate negotiations. Of this information, price is one of the most important factors to establish. Prepare by knowing your client’s preferred price points.

It’s also important to know the condition of the house. Visit the property in person if possible. Arrange for a home inspector to provide a report. Walk through the property to inspect the key areas that may impact negotiations.

The areas to check include:

  • Roofing: Check for structural issues and how much life is left.
  • Interior: Prepare a health and safety checklist for things like smoke detectors.
  • Plumbing: Check for signs of corrosion and worn-out connections.
  • Heating and cooling systems: Check the HVAC systems.
  • Electric wiring: Check for splices and double-tapping ground breakers.
  • Kitchens and bathrooms: Check flashing and drainage.
  • Exterior (yards, garden, etc.): For instance, check whether the driveway is all-weather.

 

3. Negotiate in Person

 

1 of the top 9 real estate negotiation strategies is; Negotiate in Person. Read More...Click To Tweet

 

We live in the information age, with so many digital solutions making communication easier. We can easily send pictures and take digital tours of a property using phones and computers. We can submit quotes and counteroffers without leaving the comfort of our offices.

While negotiating a sale via email or a phone call may work, meeting face-to-face can lead to a better deal. Negotiation classes encourage face-to-face meetings wherever possible. Meeting in person allows you to gauge the buyer. The buyer’s body language and facial reactions provide an idea of their level of interest in the property. Frequent in-person interaction can make for a more personal connection, meaning it can be easier to close sales.

 

4. Practice Active Listening

 

1 of the top 9 real estate negotiation strategies is; Practice Active Listening. Read more...Click To Tweet

 

Active listening skills can lead to better deals. As an active listener, take time to figure out why the sale is important to the seller and the buyer. You may be surprised to find the reasoning goes beyond money.

Take, for instance, where an agent meets two buyers at an open house. The first buyer offers the full asking price with two months to organize contingencies and financing. The second buyer offers 8% less but needs no financing and doesn’t ask for inspection contingencies.

While questioning the seller, you learn that the seller wants a quick sale to move to another city and wants to close the deal within a week or two.

An inexperienced agent may go with the higher offer. However, an agent who takes the time to question and actively listen knows the second buyer is perfect for the deal. The deal with the second buyer solves the seller’s most pressing concerns that makes up for the price difference.

Some tips for active listening include:

  • Asking guided questions
  • Responding appropriately
  • Providing feedback
  • Deferring judgment

 

5. Provide Value

 

1 of the top 9 real estate negotiation strategies is; Provide Value. Read more...Click To Tweet

 

Real estate agents do well to avoid pushing people into their choices. To be an expert in your field, put your focus on informing and educating your clients and buyers.

Simplify the deal-making process and make information accessible so buyers and sellers can make informed choices. Business classes prepare negotiators to be authentic and cultivate trust. Though house buyers and sellers can find all sorts of information online, let both groups see you as their most reliable source of information.

Leave an impression that makes the buyer and seller feel comfortable coming to you for advice, even if you represent the other side.

 

6. Create Win-Win Agreements

 

1 of the top 9 real estate negotiation strategies is; Create Win-Win Agreements. Read more...Click To Tweet

 

One of the core challenges of a real estate agent is to negotiate agreements that please both the buyer and seller. New agents often make the mistake of hard-selling, which can be off-putting. You don’t want to