How to Become a Better Real Estate Negotiator (2)

Part 2 of 3

Real Estate Negotiations
Welcome to part two of our three-part series on how to become a better real estate negotiator. We have introduced in our previous blog post the four types of negotiators based on emotion and assertiveness: analytical, amiable, extrovert, and pragmatic. When negotiating, people usually adopt one personality type. A few trained professional negotiators display two dominant types. However, if you want to be an effective real estate negotiator you have to be able to recognize the characteristics of each type and adapt to each personality type through role play. According to Personality Style Considerations in Effective Negotiation  published by the Institute for Supply Management, "the key to becoming more prepared is to understand the advantages and disadvantages of each style in the context of a given negotiation and the personality styles of the negotiators sitting across the table."

Five Steps to Successful real Estate Negotiations

Here are the steps you need to take, according to Sharon Vornholt's article called "5 Crucial Steps for Successful Real Estate Negotiations":
  • Be very prepared - do your homework about the area, the property characteristics, tax assessment of the property, how that home compares with other properties in the area, etc.
  • Listen - do not act like you know it all. It won't do you any good if the only thing you do is talking. Involve the other party in the conversation early on and you might get some useful details.
  • Ask "Why" and other open-ended questions - it requires some finesse but it helps you find out the motivation behind important aspects of the negotiation, like the reasons the other party is asking for a high price, what drives the objections to your arguments, etc.
  • Read body language - it gives you important clues that can help you navigate during negotiations. People's body can betray valuable information but you must be careful with the way you read the signs. It is better to draw conclusions based on at least two different signs since it is very easy to misinterpret a random gesture.
  • Build rapport - connections on an emotional and rational level can be extremely beneficial to you during negotiations. You may not be interested in all the details about their personal problems and life, but showing empathy by listening carefully helps build bridges besides maybe offering important clues.
Other negotiation experts add a few more steps to the process: present your offer, handle the objections, and close the deal. We will present more on these aspects in our next blog post. In the meantime, here are a few good resources to check out to improve your knowledge on real estate negotiations:

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