Today, let’s talk about a topic that’s close to my heart and crucial for every sales professional: the three secrets of negotiations. I will share with you my best real estate negotiation tips for real estate agents.
Real Estate Negotiation – Secret Number One: Negotiation Theory
Let’s start with negotiation tips for real estate agents that focus on theory. There’s a quote from the Harvard Business Journal that I love: “A cooperative approach is the surest path to understanding the other party and discovering new sources of value.”
I’m a big fan of the book Never Split the Difference, written by Chris Voss, a former FBI hostage negotiator who now trains business professionals on negotiation. Chris often points out that some sales professionals believe the best way to negotiate is to be aggressive, forceful, brash, or even argumentative. But, as he says in a hostage situation, that kind of approach could be deadly. In business, it just causes the deal to fall apart.
If you’ve found yourself being aggressive or forceful in past negotiations, it might be worth reflecting on that. Remember, we’re all likely to be in this business for a long time, and we want other professionals to want to work with us.
Understanding Motivation
Today’s consumers tend to hide their motivation more than they used to. Maybe they think that if we know all their reasons and wishes, we’ll have some power over them. I’m not sure why, but I do know that if we can be detectives—asking the right questions, paying close attention, reading between the lines, and focusing on their interests and concerns—we’ll get much further than if we just accept their stated positions.
Let me give you an example. I’m sure you’ve all had this happen: You have a listing that isn’t selling, and you talk to your seller about a price adjustment. They say, “I don’t have to sell.” Maybe that’s true, and they’re just not motivated. Or maybe it’s a tactic and they’re negotiating with you, trying to get you to work harder to sell their home at the price they want.
When I hear what sounds like a stated position, I know I need to dig deeper and look at the backstory. For example, if the seller has bought a house in Arizona, their grandkids are there, they’ve started packing, and they’ve even had an estate sale, it’s unlikely they’ll stay. So, I might say, “I appreciate that you have options, which is good. I’m wondering, other than selling the home, what other option were you considering?” That opens up the conversation and often leads to the real motivation. This is one of those negotiation tips for real estate agents that builds trust with clients.
But you have to be careful. You can’t just say, “I’m not buying this and I know you have to sell.” The goal is to help them realize their true motivation themselves or to give them a gracious way to admit it. Negotiation tips for real estate agents often center around asking the right questions at the right time.
The Importance of Likability
If we want clients to open up, cooperate, and share their goals, dreams, and plans, we need to establish trust and rapport. Likability is critical. How do we become more likable? Be calm, be patient, and ask great questions about what matters to them. Don’t argue or make them wrong.
Always look for solutions to their problems instead of trying to beat them or the other side into submission. Real estate deals come with problems. I like to prepare both sellers and buyers by saying, “Real estate transactions can be a little bumpy. There are a lot of parties involved. If a problem arises, I’ll be direct and honest with you, but I’ll also come to you with options or solutions so we can make decisions together.”
Logic Versus Emotion
We like to think we’re logical creatures, but most of what we do is fueled by emotion. We then look for logical reasons to justify our actions. I’ll admit, as a newer agent, I once thought I needed to lease a better car so people would think I was successful. That’s emotion at work and then I justified it with logic.
When working with buyers and sellers, remember that their actions are driven by emotion. For example, an older couple moving into assisted living might refuse to stage their home or even move items on a bookshelf. It’s not logical, but it’s emotional. Understanding that helps us negotiate more effectively.
Sometimes, a first-time buyer will ask, “But am I going to like it?” even if the house is a great deal. That’s emotion. Analytical people are emotional too; they just need more reasons and data to justify what they want to do.
Real Estate Negotiation – Secret Number Two: Negotiation Skill
Now, let’s talk about negotiation skills. Emotional intelligence, or EQ, is huge here. High-stakes negotiations create anxiety for everyone involved, so it’s important to manage and control your own ego and emotions.
If you haven’t already, I recommend reading Emotional Intelligence 2.0. It’s easy to find and comes with a code in the back for an online EQ assessment. The assessment gives you two scores: one for your awareness of yourself and how you impact others, and another for your ability to quickly assess people and situations.
I expect high EQ from my coaches at Forward. If your score isn’t as high as you’d like, the assessment gives you specific steps to improve. Work on those for 60 to 90 days, then retake the assessment. You’ll see a dramatic change. Negotiation tips for real estate agents include continual self-improvement in emotional intelligence.
Social Intelligence and Versatility
Social intelligence and sales versatility are also important. I once attended a class where the instructor said to challenge yourself weekly to do something outside your comfort zone. We all get into ruts—the same people, routines, even the same route to work. Breaking out of those ruts keeps us versatile. Practice versatility in all areas of your life. Stay adaptable and open-minded. This helps you quickly establish and maintain rapport with all parties in a deal, no matter how difficult. You might not end up friends, but you can lower the stress in the transaction.
Think of yourself as a chameleon—able to blend in and communicate effectively with anyone. Mirror and match their rate of speech. Fast talkers want you to talk fast; slow talkers want you to slow down. Acknowledge and validate: “I can appreciate that. I understand. I hear you. It sounds like you’re very upset. Talk to me about that.”
Finding common ground is key. Sometimes people behave badly and later regret it. If someone asks for something unreasonable, you need to say no in a way that lets them save face.
Stay calm and keep others calm. Try not to create sides. A friend once told me, “A great negotiator will take a sword on behalf of their client.” For example, if your seller doesn’t want to do repairs, you can tell the other agent, “Because this was an as-is deal, I have advised my sellers not to agree to the repairs.” The seller is saying no, but you allow them to be the good guy. These negotiation tips for real estate agents help maintain professionalism.
Know Your Market
You need to know your market and your product. Be able to have data-driven conversations and present practical recommendations and options. Spend extra time up front to educate clients and set proper expectations. If a seller expects 25 bids on day one, show them the current data and set realistic expectations. This makes negotiation easier, though not always easy.
Real Estate Negotiation – Secret Number Three: Negotiation Tactics
When it comes to negotiation tips for realtors, tactics are important. The first is to ask great questions. Study and learn the best questions to ask, and use them often. Storytelling is another powerful tool. Third-party stories persuade people because they either want to repeat someone else’s success or avoid their mistakes.
Tell stories like, “This reminds me of a time…” or “Let me share a story that will help you understand the situation.” Scientific studies show that when you say, “Let me tell you a story,” people’s brains light up. People love stories.
Use the language of agreement. Always seek ways to acknowledge and validate. Eliminate argumentative language. For example, instead of saying, “I get your point, but here’s the thing,” which is argumentative, use “and” or “yet here’s another way we could look at it.” Soften your tone, especially in tense situations. Chris Voss calls it the “late night DJ voice.”
When you ask questions, come from curiosity, not judgment. For example, “This is a full price offer with no contingencies. I’m curious, what’s stopping you from moving forward with it?” Compare that to, “Why aren’t you taking it?” Same question, different result.
Always anticipate objections, questions, and the information you’ll need. As the saying goes, “Forewarned is forearmed.” The better prepared you are, the better your negotiation will go. These negotiation tips for real estate agents are about preparation and anticipation.
At the end of each negotiation, ask yourself: What did I do right? What didn’t go well? What will I do differently next time? Make those adjustments. We all make mistakes, but if you assess and learn from them, you’ll help more people and do better in the future. And, once you know what to improve, let it go. Don’t beat yourself up.
Investing your time and energy to improve your negotiation skills shows your commitment to being better for those you work with. If you’d like to talk about how we can help you at Forward Coaching, just reach out. There’s no contract. We want you to stay because you’re happy with your results.
