7 steps to a successful negotiation
What is the biggest challenge for real estate agents? It’s Negotiation! You must learn to negotiate. We believe knowledge equals confidence, while ignorance equals fear.
Negotiation occurs not only when an offer is made, countered, and hopefully accepted but also during home inspections and appraisals, commission collection, and many other times before your clients finally reach the closing table.
Even the most experienced agents may still experience anxiety or anguish during real estate transactions. They might be in a different price range than usual, dealing with a seller who is strong-willed or having trouble understanding key points. It happens to all of us.
Agents who are new or inexperienced fear running into a tough negotiator like a buyer or seller who won’t budge, or an agent with whom they can’t communicate.
Basics of negotiation
Negotiation is the process by which two or more people with different goals and needs discuss and find a mutually agreeable solution.
Negotiation is not about making the other side cry, getting them hang up on you, fakeing them out, or any other non-tactical, annoying behavior. Avoid using this language and be aware of agents or clients who use it.
These are our strategies to assist agents in finding a mutually agreeable solution in any negotiation. As we discuss these points together, we’ll also be discussing the seller and buyer sides.
These are the 7 steps to a successful negotiation
To be able to negotiate successfully, you must know everything about the property. These seven steps will help you get started in negotiations, regardless of whether you are on the listing or buyer side.
Mark Twain stated, “Supposing can be good, but finding out is better!”
The entire MLS description is available, along with extended comments/agent remarks.
Often, the listing agent will tell the seller exactly what it will take to accept an offer. If this information is not provided, contact the agent to find out the seller’s priorities beyond the price.
Please note if any details are not listed
These details could include FHA approval and seller financing, closing costs assistance, or as-is conditions.
Investigate the history of the property
You can search Zillow, Google, and YouTube to find out if the property was for sale by the owner before it was listed with the agent. It should take you less than 5 minutes, but it could make the difference between winning and losing the deal.
Find the Days on Market so far
Is this a new listing or have they been on and off before? Is the price a new or lower? Did the market re-list because of a pending sale? What caused the sale to fail? Did there have to be inspection or appraisal problems? It’s okay to call the listing agent to get the answers to all these questions.
What are the comparable sales prices for this property?
It’s a good place to start: The most recent closed homes and pending sales. How long did it take for those homes to sell? What is the ratio of list-to-sell prices? These numbers are going up or falling?
What is the active competitor?
Is there any other options for the buyer? Is there any new construction in the vicinity? How does the property compare? If there are few comparable homes, you can expect to pay more for the property. Unless the property has been on the market for a while. Find out why this is the case.
What other important information is there about this property?
Is it located in a floodplain Is it located in an area that is highly competitive due to a new town improvement or a corporation moving into the area? What will happen to the field behind the house? Are they going to bury the powerlines soon?
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