Negotiation has always played a role in society since the beginning of civilisation. Whether it’s scoring deals at garage sales or navigating business transactions, having the skill to communicate effectively can greatly benefit us in various aspects of life — and this holds true in the day-to-day of real estate agents.
As professionals in the real estate industry, our success depends on our capacity to inform and persuade buyers, sellers and even fellow agents to secure the best deal possible. We’ve put together a list of 7 highly effective negotiation tactics for real estate agents, both new and experienced, to hone your edge in closing deals.
Understanding the basics of real estate negotiation
Let’s start with the basics. The outcome of real estate deals will depend heavily on your ability to negotiate, as well as the strategies you employ throughout the process.
Your goal? To get the best deal for your client. But with your colleagues on the other side doing the same for their clients, it won’t be that easy. Every deal is different, and there is no best strategy for how real estate agents can negotiate.
What will help is to include more negotiation tactics in your arsenal; the more strategies you know, the more options you will have to choose from to respond to the state of the deal.
1: Build rapport and trust
Closing a deal is not always about having the right numbers. As an intermediary between your client and the other parties, you should always try to establish trust and build rapport with both sides. People tend to be more receptive when interacting with others they believe have their interests in mind.
Communicate often and be mindful that your body language and choice of words have a positive undertone. The last thing you want is to come off as unfriendly and hostile, even if you did not mean it. Engage in your personal interactions, like setting up a face-to-face meeting instead of a long email.
2: Conduct thorough research
Don’t stop your research at the surface level. Doing a deep dive into market trends, the other parties’ real estate negotiation strategies, and the property itself can give you a unique insight into what kind of deal you can shoot for.
Most agents will have a personal go-to negotiation strategy, and finding out what it is can give you the upper hand when dealing with them. Try networking or reaching out to your real estate agency to find out if they have dealt with a particular agent before.
As for the property itself, it may be worthwhile to hire a reliable property inspector to find out just what you’re dealing with. Some issues are not identifiable at first glance and will only be revealed in the results of the inspection.
3: Make multiple plans
In your initial consultations with your client, you would likely already have a rough goal to negotiate towards. Many real estate agents make the mistake of thinking that there is only one path toward this goal when, in reality, even the best-laid plans can be thrown off course by unexpected responses from the opposing party.
In addition to your main negotiation strategy, prepare other plans for when the opposing party responds in another way. The more plans you map out, the better you will be able to anticipate changes as the deal progresses, giving you a clear path towards closing the deal.
4: Listen actively
Speaking well isn’t the end-all for negotiation. Knowing how to listen to your client and the opposing party is just as important and can help you pick up key details about what’s flexible and what’s non-negotiable for them.
When sitting in consultations and discussions, give more opportunities to other parties to speak. Pay attention to their body language and what they are saying; they may end up divulging essential information that could impact the way you negotiate with them.
5: Keep your cards close
Not having the full picture of the opposing parties’ goal during negotiation can sometimes result in a form of guessing game. In situations where you don’t have sufficient information to make a decision, try not to be too eager to show the opposing party exactly what you are looking for.
Multiple studies have shown that not being the first party to put forth an offer usually results in a better deal, as well as less post-purchase dissonance. Instead of showing your cards to the opposing party, try to coax their own from them by asking open-ended questions and listening for clues.
6: Play nice
Reputation is hard to build and easy to tarnish. When dealing on behalf of your client, don’t engage in frowned-upon tactics or behaviour, such as lowballing the opposing party with a poor value of the property or swearing at them. Not only do you risk insulting them and losing the opportunity altogether, but you may also garner a negative reputation in the real estate community over time.
No matter how frustrating the situation is, you should strive to maintain your professionalism. Having a good reputation can open many doors of opportunity in the form of networking and referrals.
7: Know when to let go
Not every deal has an ideal outcome, even with the best negotiation strategies. Sometimes there are situations where the opposing party and your client just don’t seem to align and instead of investing time and effort into negotiations, it’s advisable to step away from the deal.
If you have a feeling that both parties will never come to an agreement on an offer, it’s in your interest to counsel your client to conclude the discussion. Ultimately you wouldn’t want your client to settle for an offer and be dissatisfied with the services you’ve provided.
Negotiate your way to success with Entry Education
When it comes to being successful as a real estate agent, negotiation tactics are the cornerstone of your skillset. Take these negotiation strategies and make them your own by practising them in your next opportunity — you’ll be landing better deals before you know it.
Looking to learn more about what it takes to thrive in the property market? Our expert team of real estate educators at Entry Education can equip you with the right tools, skills, and accreditation to get you started. Explore our courses and resources to deepen your knowledge, or reach out to us today to begin honing your negotiation skills!
