Friday, August 12, 2011
The Art and Science of Negotiation
Categories:art and science of negotiation
As a residential developer, I always enjoyed the negotiating process. We negotiated with consultants, land owners and home buyers. But what makes a great negotiator when it comes to selling or purchasing real estate?
I believe an expert negotiator understands the type of person they are negotiating with, listens and seeks clarification before speaking, and is not afraid to ask for acceptance of an offer.
In today's high-tech, de-personalized world, the art of communication is hindered through e-mail, text messaging and faxing. As I heard from an expert negotiator at a course last week, the tech-savvy generation "Y" has it all wrong! Although electronic communication is undeniably efficient, it is not effective. I believe that negotiation must be done in person to be the most effective.
Believe it or not, the accepted offer is not always the highest offer. Many sellers want to know that their home will continue to be cared for, either for pride of ownership or love of the home.
When presenting offers, ideally in front of the seller's and their Agent at the same time, it makes a difference for a seller to know that the buyer is not the "enemy" in negotiations. Presenting in person allows for opportunities to humanize the client.
Before presenting an offer (as a buyer's Agent) or receiving an offer (as a Seller's Agent) I always want to know who I am dealing with.
This typically means understanding the other side's Realtor before I even begin the negotiating process. This has made a positive difference for my clients in the outcome of almost all of my transactions - often in the post sale follow up and care.
What follows are some typical personality types and tips to help make the "other" side your partner in negotiation rather than your opponent.
If negotiating with a "driver", simply answer their questions in an efficient and straight forward manner. This type of person is very competitive and likes to be in charge so the best approach is to let them feel like they are "winning." Appeal to this person's ego!
An "analyzer" bases their decision on facts, data and statistics. When negotiating with an analyzer, provide all the relevant market information up front so that they can feel that they are making their decision logically. You will not win them over with a warm smile and photos of the client, and it is best not to try! You need to prove to them with factual information that your offer, or your home price, is fair and supportable.
A "supporter" is going to want guarantees and everything in writing. I make an extra effort to ask them for their opinion and make them feel important. When negotiating, I will smile often and look for common ground. I will present information slowly and be precise, and remember that they are private people by nature, so financial information is discussed in a quieter tone of voice.
Influencers are strong personalities that are open, talkative and expressive. They smile and put people at ease. They are motivated by recognition and need to like you and trust you. When negotiating with this personality type, small talk is good. Try to keep the process fast and upbeat. Let this personality type talk as much as possible - the more they talk the better the result will be! Most Realtors fall into this category and I must admit, there is a lot of the "influencer" in me!
If you have done everything right it should not be difficult to isolate any objections. It is important to remember that many objections do not even need a response. In fact, most professional negotiators see objections as an opportunity for clarification. As long as dialogue is occurring, there is still an opportunity for a deal to be made.
The final step in the process is to literally ask for acceptance, do not assume it is implied. The verbal, in-person request should be heartfelt and should accentuate the positive.
Finally, although most people can be good negotiators, it is always best to have a third party negotiate on your behalf. This keeps you detached from the situation and allows for a better chance for a successful outcome.
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