How to Become a Better Real Estate Negotiator (3)

Part 3 of 3

This is the third and last article in a series of blog posts on how to improve your real estate negotiations skills. The previously two articles covered the four basic negotiator personality types and the most important steps to take for a successful negotiation process. In this final post we will present the most important real estate negotiation tactics.

It is every negotiator's dream to be able to place themselves in a position of power during negotiations and it is no different in real estate negotiations. But it would be a great mistake to try to do that through manipulation or deception. The best path toward successful negotiations is based on sincerity and trust.

Make sure that you are able to recognize a bad deal and know when it is time to walk out of it. Allow yourself an easy exit at all times but make sure you leave in good terms. This way you can still make a move later on if circumstances change.

Share information - people tend to follow reciprocity, responding in kind to how we treat them. If we want to be trusted, we must first offer it. Revealing some information, even when it’s unrelated to the negotiation, increases the outcome. Don’t have to put all of your cards on the table, of course, just put something of yourself out there like your hobbies, interesting stories, etc and set a positive tone that’s conducive to gaining agreement.

Make the first offer - this might defy conventional wisdom but it is best to extract as much as possible from the other person before tipping our own hand. We are usually reluctant to go first because we are afraid may be way off and disengage the other party, but research showed that most people make first offers that aren't aggressive enough. In real estate, a high-priced home makes us look at all the desirable qualities, while a below-market offering brings up a bad location or needed repairs.

Counter-offer but don't do it too low - people are most satisfied on both fronts if there was some back and forth. Don't take the first offer, even if it meets your needs. Go back and ask for concessions so you can ensure that you got the best deal. Many people go too low, too quickly on their counter-offer, especially if they didn't make the first offer. Let the other person know that their offer is way off by saying something like "you may be trying to test my thinking with that first offer, but here’s more of what I had in mind."

You can get closer to finalizing a successful real estate negotiation by taking small steps. Help your counterpart say yes on smaller aspects and that will help you pave the path toward the final agreement. How do you accomplish that? Adapt your strategies and tactics to each negotiation effort and make sure you ask questions that can easily generate a small "yes." But always look for the signs showing the negotiation is over. Make the close right there, don't keep going on or you risk of jeopardizing the whole effort.

If you want to read and learn more about real estate negotiations, check out these useful resources:

• How to Negotiate: 7 Real Estate Negotiation Tips
• Master The Art Of Negotiation
• 7 biggest home price negotiation blunders

How to Become a Better Real Estate Negotiator (2)

Part 2 of 3

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:

• The home seller’s negotiation cheat sheet
• 10 steps to effective negotiation
• No-fail negotiating

How to Become a Better Real Estate Negotiator (1)

Part 1 of 3

This is the first article post in a series of blog posts on how to improve your negotiations skills. Real estate negotiating is one of the most important attributes for both investors and real estate agents. The business of selling and buying properties is a people business and requires relationship development skills. As a real estate agent or even as a regular seller or buyer you need good negotiation skills. The ability to close deals favorably is crucial to the success of your real estate transaction and to the success of any business as a real estate agent.

The best way to set yourself on the right track for improving your negotiation skills is to treat it as a process toward helping you understand people and their motivation, needs and wants. Despite popular beliefs, the negotiation process is based on trust, the opposite of deception. Successful negotiations require building relationships and rapport based on honesty. Get yourself familiar with human personality characteristics and use this knowledge to structure your offer accordingly. This will heklp you negotiate from a position of power since the other side will be more inclined to agree with your offer.

First impression can be a powerful tool in your negotiation arsenal. The best way to create a best impression is to add a dose of charisma. Add to the mix some confidence and laughter, hide your nervousness and make it look like you are relaxed. All these will help you establish a good relationship and build rapport.

Negotiator Personality Types

Master the principals of human relations based on humanc personality types. You can conduct a successsful real estate negotiation if you adapt your approach to these personality characteristics.

There are four negotiator personality types:

The Analytical Negotiator - they tend to be overcautious, are very slow to decide on any course of action because they demand a high level of accuracy, and, therefore, they need lots of information before they’re comfortable with making a decision. In negotiating with the analytical negotiator you must propose solutions and outcomes that answer the question, “How has it been done before?' Analytical negotiators are usually consistent and predictable.

The Amiable Negotiator - is typically a traditionalist who is very interested in developing and maintaining relationships between the parties. The amiable negotiators hate high-pressure tactics and avoid conflict situations whenever possible. They value loyalty, sensitivity, and patience. The negative side of the amiable negotiator includes the tendency to be impulsive and sentimental.

The Extrovert Negotiator -  is very friendly and open. The theme of the extrovert might be “Trust me, it’ll work out!” However, extrovert negotiators are enthusiastic, visionary, and has the ability to motivate others. They are willing to say “No” if their needs are not adequately addressed.

The Pragmatic Negotiator - is very business-like and efficiency-oriented. All thoughts are focused on the bottom line. The pragmatic negotiator can be recognized by the use of organizers and formal behavior.

Source: Institute for Supply Management - Personality Style Considerations in Effective Negotiation

In our next blog post we will present the steps of real estate negotiations and a few tactics to help you succeed.

Here are a few great online resources to check out before you start working toward improving your negotiations skills:

Real Estate Negotiating (Part 1) - FortuneBuilders
http://www.fortunebuilders.com

Real Estate Negotiating (Part 2): The 8 Step Process - FortuneBuilders
http://www.fortunebuilders.com