Negotiating the offer can be a real estate professional's most daunting task. Good negotiating skills are a must for every agent because according to The 2006 National Association of REALTORS Profile of Home Buyers and Sellers, the second most important reason why a homebuyer uses a REALTOR is to help them negotiate the terms of the sale. You are the professional and your number one priority should be to negotiate the best deal for your clients.
Here are a few negotiating tactics that almost always work (adapted from 1,200 Great Sales Tips for the Real Estate Pros by the National Association of Realtors (John Wiley & Sons, Inc. 2007). Try them out in your next offer.
The Silent Treatment. Silence makes people uncomfortable. After you've made an important point, look directly at the other party, smile, and wait. The longer you go without saying anything, the more uncomfortable the party will get. Eventually, someone will say something - anything just to break the silence and the response will often be unguarded and will give you valuable information for your next strategy.
The Flinch. The flinch is a small sound or facial expression that communicates displeasure. Although the flinch is subtle, it can plant serious doubts in the other person's mind. Try flinching in reaction to a monetary offer or when the other party starts negotiating too aggressively. Don't be surprised if even the most experienced negotiator becomes more flexible!
The Deadline. Deadlines are a must when negotiating. They keep situations under control and get results. Begin a meeting by saying that you must leave in an hour, or, if negotiating over the phone, tell the other party that you need to be somewhere at a certain time and that they won't hear back from you for a few hours. Try setting a date when the offer will expire; this will motivate people to take decisive action.
The Competition. Competition is a good thing and mentioning that there are other parties interested in the property will keep the other side from feeling too secure. If you are the buyer's agent, remind the listing agent and the seller that the buyer also liked several properties in addition to theirs. If you are the listing agent, hint that another offer may be on the way. Don't lie, but don't miss the opportunity to use the competition to your advantage.
The Departure. Preparing to walk away from the negotiation table can get dramatic results when the other party is being non-committal or refusing to make a counteroffer. It can also backfire at times as well and if the sellers or buyer rejects the offer; you may have a very upset client on your hands. In a buyer's market, the seller may be more willing to negotiate because buyers are few and far between. There will always be another property for sale that the buyer may be interested in.
The Perk. You can negotiate valuable non-monetary perks in the contract that will satisfy the buyer while keeping the seller's bottom line in tact. Perks, such as a quicker close or a free home warranty to the buyer if items in the home should happen to break after close. Talk with your buyer first before presenting the offer. He or she may be happy with a home warranty because of the uncertainty of an older appliance or mechanical system in the home. If you represent the seller, explain to them that the home warranty can limit any post-sale liabilities after close. You can offer to pay for the warranty as a closing gift to the buyer. This will definitely get you referrals!
A home warranty can be ordered quickly online or over the phone with HWA's High Speed Home Warranty web site. As an agent, you can find out more about home warranties and how it can help you sell homes more quickly than with a home without a warranty. Log on to view a fun video presentation about HWA and after the presentation, you will receive a free gift!
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