13 Real Estate Negotiation Tips
One of the primary objectives of a real estate business plan is, of course, to earn revenue and profit from clients. For that to happen, what you must do is generate leads, meet prospective clients, and negotiate with them. Negotiations are important stepping stones to expand the clientele of your real estate business. This type of social interaction isn’t an easy one because it’s purely business-related and involves large amounts of money. To be successful, we encourage you to learn the 13 tips before starting a real estate negotiation.
Download this Free 13 Real Estate Negotiation Tips Article in PDFDownload
13 Real Estate Negotiation Tips
Do Research About the Market
Before you dive into a serious real estate-related conversation, you have to do a market analysis first. In fact, it’s one of the very first things to do in launching a real estate business. An analysis of the real estate marketing field will provide you with extensive knowledge regarding the twists and turns of this large industry. As the real estate agent (seller) during negotiations, you should be the one equipped with more knowledge about real estate, not the client (buyer). Also, by studying the real estate market, your findings will be utilized in formulating a sales plan to optimize revenue and profit.
Try to Find Out the Reason for Sell/Buy
There’s always a reason why negotiations take place. On your side as the seller, surely it’s to gather more clients and maximize sales and revenue. On the buyers’ side to purchase a real estate property, there’s probably a long checklist of reasons. It’s your responsibility as the seller to know them. In having prior knowledge about the buyer’s purposes, you’ll have the upper hand during actual negotiations.
Negotiate in Person if Possible
Conversations are always better if it’s done in person; even more so for business negotiations. Although technology provided us the means to communicate with each other from afar, negotiations done in person is still more engaging. The exchange of information between you and the buyers will be accurate, and your talks with them will be more fruitful. Plus, it’s an excellent way to start establishing a professional relationship with your buyers and making them your long term clients.
Let the Other Party Speak First
After introducing yourself as the real estate agent, give the buyer the opportunity to speak first. You have to hear them out first to know what they want specifically. It’s also one way of showing them that you’re a courteous negotiator, which they might consider as a good first impression.
When the buyer or prospective client is speaking, make sure to listen carefully. Listening carefully is a basic principle that you must have as a real estate agent or seller. The information that the buyer will convey will be your basis on what you should offer to them. And if lend your ears well, the negotiation will be smooth-sailing and flawless.
Choose Your Words Carefully
In a negotiation, anything you say or express has the potential to bring you to the winning side or the losing side. That said, you have to choose your word carefully during negotiations with prospective clients. Make sure that anything you say will work to your favor and your buyers’ favor. As much as possible, you need to establish a neutral ground or atmosphere in conversating with potential buyers.
Show Them You’re Interested But Not Desperate
If the prospective clients deem that you seem desperate to bring them under your clientele, it’s not a good sign. It gives them the impression that you only want them to be your clients, and that your sole purpose is to gain revenue and profit from them. But by showing them that you are genuinely interested to offer something according to their needs, it’s very possible that they’ll purchase or lend their investment to your real estate properties. Give them reasons to invest.
It’s essential for negotiations to end in a win-win situation. So if possible, try to compromise with the prospective clients. In such events, you need to give up something to make the negotiation successful. The prospective clients may do the same as well, especially those who are very eager to invest or purchase your real estate offers. Most of the time, negotiations that end in compromise pay off in the long run.
Be Prepared To Walk Away
As a real estate agent, it shouldn’t be in your mindset to assume the possibility of walking away from a negotiation. However, you have to be prepared for it. Know that not all negotiations end up in a good deal. In times when you deem that a potential buyer actually has no financial capability to invest and purchase, that’s a valid excuse to walk away from the negotiation. But, you should do it courteously and professionally.
Always Know the Highest Price Before Starting
According to a study by the National Association of Realtors, 25% of real estate buyers are dependent on agents to negotiate the pricing of the properties or to come up with a better price. That said, it’s best to know the highest prices of your real estate properties before starting negotiations. In that way, you can report and offer deals that are more favorable for your company’s side.
Gather Required Information About the Property
If there’s a particular property that a prospective buyer wants to purchase, and no other, make sure to gather every bit of information about it. During the negotiation, you can provide the buyer with answers to any question he/she might ask regarding the property. If the buyer is satisfied, that’s a good implication that he/she might agree with your terms and purchase the property.
Don’t Make Assumptions
As a real estate agent and negotiator, you should know that assumptions can make or break your deals with prospective buyers. You may have confidence in your negotiation skills, which is good, but don’t assume that you can seal good deals all the time. You need to be open to the fact that anything can happen during a negotiation, both favorable and unfavorable. Never make assumptions before a negotiation. Remember to do your homework and research beforehand.
End the Negotiations on a Positive Note
Negotiations must always end on a positive note to showcase an excellent closing impression with the other party. Even if deals weren’t achieved with a supposed prospective buyer, your interactions with them must close positively for professionalism. You don’t want your real estate company to be in a bad light due to poor negotiation outcomes.
The making of your real estate business’s future starts with your negotiations with clients/buyers. That said, you must execute the proper tips and practices in negotiating with them. Include that when you set real estate goals. If negotiation talks daunt you in a way, it shouldn’t. Just think of it as a normal conversation between two people forging a strategic and neutral agreement.