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This is certainly true within the real estate business. If you consider all the times that we negotiate within our business - when talking with buyers, when meeting with sellers, when presenting a counter-offer or when just trying to show a home - it becomes quickly apparent that the only agents who thrive are those that have developed excellent negotiation skills.

In the annual Home Buyers and Home Sellers report compiled by the National Association of Realtors in 2002 it was found that buyers placed an agents ability to negotiate effectively as one of the top three reasons for hiring an agent. In my experience sellers share this view.

A few fortunate agents are born with a natural ability to negotiate. They seem to take to negotiation as easily as walking. But for the rest of us mortals it takes more than just natural ability to provide our clients with the best representation possible, it takes hard work. Fortunately, many top negotiators have already paved the way for us by providing excellent examples of simple yet successful negotiation strategies.

Five Simple Tips to Improve Your Negotiation Skills:

1. Prepare to Negotiate Early - Many agents wait until the day the seller receives an offer or the buyer finds a home to discuss negotiation. This is a huge mistake. Remember that buyers and sellers are highly emotional at this point, and may make decisions that are not consistent with their own long term goals.

   The best time to discuss negotiation is during your first meeting with your clients. Set the expectations early of what to expect, and when.

   For example some top producers give their clients oversized copies of the offer during the first buyer and seller consultations. Why? It de-stigmatizes the forms and prepares clients for what to expect. For example you may say:
   

   John, these are the forms that we will be using when we receive an offer on your home. I'd like you to review these when you get a chance, and then let me know if you have any questions. Ok?

2. Use Objective Criteria Early - Let clients know that because buyers and sellers are so well informed today it's important to use objective criteria to set the asking and offering prices.

   For example when setting an asking price with a seller you may encourage the seller to allow you to this as a tool when talking with other agents and or other buyers. For example you might say:
   

   Fred, what I would like to do with your written permission is to provide perspective buyers and agents with a copy of the comparables we used to come up with our value and let me tell you why.

   I get a lot of calls from buyers and other agents when I'm marketing a home and one of the first questions I receive is - How did you arrive at the price? Most agents just fumble around for an answer, and what happens then is you may get lower offer. What I can do with your written permission is to let these folks know that we based your price on accurate comparable data… In my experience this often results in better offers.

3. Educate the Client About the Market - A great tool to use when talking with both buyers and seller is your market statistics. By knowing these numbers you can both educate your clients and guide them during a negotiation. Some key numbers that you should know:
   • What is the Average Market Time?
   • What is the Difference Between List Price and Sale Price?
   • What is the Average Sales Price?

   Let's take a look at the average difference between list price and sales price, how could that be useful in a negotiation? From the sellers perspective it would be a good indicator of how much above the suggested price they may safely be able to go, and how much they can expect to negotiate when they receive an offer. On the buyers side of the equation you could use it to help them develop a negotiating strategy.

   For Example:
   

   John, the average difference between what people ask in our market and what they actually receive is about 3%. Based on the comparable sales we have looked at this home seems to be priced about right, but if you feel reluctant to make a full price offer I just want to give you a feel for the market conditions.

4. Expect Success - Don't allow your clients the luxury of considering the possibilities of failure. Instead focus them on the success. For instance with sellers we could encourage them to complete work that we know would probably be necessary to complete a loan, or at the very least attract a buyer. This could include ordering a pest and dry rot inspections early or even a whole house inspection early. It may also include beginning to pack up personal items inside the home to make the home more appealing. Best of all you should always focus your sellers on where they will be moving to - local or out the area and help them with their relocation needs.

   With buyers you may encourage them to begin deep cleaning their rental or apartment, if they have one, so that they can receive their deposit back. In addition you could also encourage them to immediately complete the loan process so that there personal qualification will not be a contingency of the sale.

5. Establish Strong Lines of Communication - Has this happened to you: You finally receive an offer on the home you had listed for the last six month but now you can't find your sellers! Sound familiar? Establish strong lines of communication with your clients. This includes buyers, many top producers provide their clients with pagers which they use when the find a hot buy. This keeps the buyers on a short leash, and reinforces the expectation that finding a home will be happening very quickly.

   A great idea is to request an emergency phone number from your clients when you first create your relationship.
   

   You know your successful sale is my number one priority. I want to make sure I always can reach you, is there an emergency number I can reach you at in the event of an emergency?

About the Author:

Jim Remley is a speaker, author, and consultant. He is also an active real estate broker in Southern Oregon where he owns a network of six offices. Jim won the Rookie Instructor of the Year award in 2001 from Realty-U, the largest network of real estate educators in the nation. Recently he won the 2002 Pacesetter Award, and was nominated for the Real Estate Instructor of the Year Award during the first quarter of 2003. To learn more about Jim please visit www.properformer.com or email him at jim@properformer.com.

To book Jim as a speaker for your next event please contact: www.brokeragentspeakers.com
1-800-361-6848

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