Last month, I took an 8-hour course on negotiation.
Before I became a REALTOR, I negotiated health care contracts for a living. After attending the 8-hour negotiation course, I learned that the concepts of negotiation are pretty simple and they haven’t changed since the beginning of civilization when people bartered instead of using money.
Overcome Fear to find a Win-Win
Since I utilize my negotiation skills every day, I forget how hard negotiating can be for my clients. I often hear “I don’t want to go back and forth.” My clients fear rejection or offending someone. My advice is to think of real estate negotiations as a conversation and not a win or lose proposition. In fact, the best negotiations are win-win, where both sides get what they want in a transaction.
I was recently involved in a Park City real estate transaction where a buyer told me he was thinking of making a low offer on one of my listings and asked for my opinion. I told him that I didn’t know how my client would react, but any offer is better than no offer. It is a tool to start a conversation to see if we can get to win-win. When I presented the offer to my client, her first response was that she was “offended” by the low offer. I told her that she should not be offended. The buyer raised his hand and said he wanted to buy her property. Now it was up to us to figure out if we could come to a price that made sense for both parties.
Approach Real Estate Negotiations as Joint Problem Solving
Here’s how corporate negotiation consultant Jeff Weiss explained it to Harvard Business Review:
“If you frame the negotiation as adversarial, you will ensure it becomes adversarial. Instead, approach it as an act of joint problem-solving: What are the critical issues at hand, what are my interests and their interests, and what are some different options for satisfying those various interests? Negotiation isn’t about conceding, it’s about being creative.”
The purpose of negotiating in real estate and any application is to produce something better than you can without negotiating.
When The Outcome is Not What You Want
In my example, if the buyer did not present his offer, he would have no other way of knowing whether he could buy the home for what he was willing to pay. From my sellers’ perspective, she had to really think about what she was willing to take for her home. After some back and forth, we realized that buyer and seller were too far apart for this transaction to come together.
The negotiation was positive and friendly and the door was left open in the event the buyer reconsiders his position and is willing and able to come up in his price. What started off as emotionally scary for both parties turned into an educational and positive interaction, even though it did not result in an immediate transaction.
What Negotiating is Not
Negotiating does not have to be confrontational, insulting or rude. It should be approached like a conversation. Sometimes the needs of both parties can be brought together and sometimes they cannot. The only way to find out is to enter into the negotiation process. It helps if you have an experienced professional to guide the process.
What are your thoughts on negotiation? Have you been turned off by someone who came on too strong? Have you ever reached an agreement when you never thought it would happen?