Negotiation is believed to be an 'all or nothing' process - that is, there has to be one winner and one loser. The goal of negotiation is to achieve in the end what you want, the best deal. Negotiation is an art and the extent of victory mostly depends on the negotiator's knowledge, competence and application of various strategies, skills, and tactics. Negotiation is the key factor in getting the best deal in real estate.In real estate, the buyers have the most success negotiating with a motivated seller. Sellers can be forced to put the home for sale for several reasons:
- moving out to another city
- a job loss and looking to avoid foreclosure
- house is an unwanted inheritance
- rate of interest increased and can't afford
Although one can spend his or her entire lifetime trying to learn the art of negotiation, learning a few key negotiation strategies in real estate can put one far ahead of most of the competition, and can help plot a course of action, when up against an unmotivated seller, a savvy buyer or a head-strong contractor.
Let’s look at some simple step in real estate dealing, which can be used to achieve success in a negotiation:
Get prepared - Before beginning any negotiation, it’s essential to be informed about the concerned property on sale. One has to do their homework. The more information one has about the property, the more easily the negotiation can be handled. Information like, nearby localities, prices of the similar kind of property in that locality, what are the basic amenities and how is it? Is there any new real estate company who is selling similar kind of property? Is there any items necessary to discount value from the seller or an added value to the buyer?
Start listening - Active listening and maintaining silence is the most important art of negotiation in real estate transactions. It’s important to know what the other party has to say, try to perceive the body language like, closed palms, crossed legs, lack of eye contact while the other real estate agent or party is doing the talk. Sometime it may happen that one can strike gold or discounted value for a home when he or she listens carefully to the other person. Disagreements - Generally the disagreement between the two parties will be over the value of the home for sale, the amount of repairs, or the length of time needed for the transaction to occur. When 'arguing', it is important to stay objective. It is important not to take it personal. Skilled negotiators always use an accommodating approach in dealing with people. They understand that one can win an argument most times- but lose a sale every time. It is better to abstain from disagreements and be flexible with clients to achieve the desired goal.
Provide signals - It’s always better to specify readiness to work together. Important point is that one finds the common attributes one have with the other person across the table, and builds negotiation on it. Listen to words or phrases that leave uncertainty and may signal that a party is open to a given proposal. Words such as 'can', 'possibly', 'perhaps', 'maybe' or 'acceptable' provide signal for giving proposal.
It is important to note in negotiation, whether buying or selling, that if one is not able to get the agreed price, at least he or she can get the term agreed for sale or purchase. For instance, the seller reducing the price to 20% is a sacrifice or if you are acquiring extra time to pay the money is an advantage. However, it is important that both the parties are willing to make some adjustment to achieve the desired result.
Complete the deal - Make sure that both parties be informed of the deal and are in agreement. Write the minutes of the meeting and close the deal by getting the other party’s signature on it and close the deal.
Negotiators need to be patient, informed and flexible and they should listen attentively to their clients’ requirements because these factors make them effective skilled negotiators.
