Archive for the ‘negotiating’ Category

Top Negotiation Skills for Business People

Tuesday, September 15th, 2015

Negotiations are a part of many businesses, including real estate, and there is definitively an art/skill set used in negotiating on behalf of another person. No matter what type of situation or opponent you face, there are a few tips to help you be the best negotiator possible: th

1. Leave your ego at the door. This is perhaps the one thing many people don’t remember when entering into negotiations. Titles and experience can be good to share with your opponent, but you have to know when to use them. Waiving them around to prove a point just makes the other person annoyed by you, which in turn may lose you points and leave with less than you wanted to accomplish.

For example, if you are negotiating repair requests in a real estate contract with the other agent, arguing that you have never seen such a situation in your “15 years of experience selling 200 homes” will just irritate – you are not going to score any points there. Instead, you can point to a situation that may have been similar in another sale and discuss how it worked for both the buyer and seller. This is a much better way to show not only your experience and a similar example, but also to provide resolution and be helpful at the same time, in a positive manner – a much better way toward a resolution.

2. Listen. Many of us go into negotiations with intentions of being good listeners, but as soon as someone mentions an opposing view we tend to get defensive. In law school we learned there is a time to listen and a time to argue your own points. Listening means really paying attention to what the other person is saying – they too are representing another person and are entrusted with the same job as you, to do their best for their client. Most importantly, do not interrupt the person; instead, take notes so you can address any points that need attention when it is your time to speak. Remember that listening is actually helpful to you in presenting opposing perspectives.

3. Validate. Everyone needs validation, and whether you agree with the points presented or not, it is important to validate FIRST, before jumping into counter points: “I understand that your client is concerned about X because it will cause financial duress. Here is how my client views X.” Then offer a solution.

4. Don’t be reactive. This goes hand in had with listening – if you react or explode once a counter point is made, you are digging your negotiating grave. Practice taking deep, slow breaths and controlling your defensive mechanism. There is always more than one side to every situation, so keep that in mind; if you ever want to come to resolution you need to keep your cool and play fair.

There are many other great skills to use in negotiations, but these 4 are very basic and important. A great way to practice them is to have a friend, spouse or family member play the opposing side. They can even make it difficult for you by sticking stubbornly to their side – see how you can make your points without using your ego, by listening, validating and not reacting.

 

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The Art of Compromise in Real Estate: After Acceptance

Friday, June 14th, 2013

Business is business, and oftentimes for many that means keeping emotions at bay and thinking with only a black and white palette. Real estate sales transactions are no exception, or are they?

There often comes a time in a real estate sale where the buyers discover information about their new home that they consider important, and as a result they appeal to the sellers for repairs, credit or a reduction in the purchase price. Most sellers are open to helping the buyers out in some way, but there are others who dig their feet in the dirt and refuse to budge. I have represented many buyers and many sellers, and I have seen both sides and understand where all parties are coming from. But there is something to be said about kindness and trying to understand viewpoints and concerns, and I think no matter what side you are on you can always be a good person.dreamstime_8342871

Of course, each sale is very different and there is no way to formulate a plan that will apply in every situation. My best advice is to truly consider what is being requested and to try to weigh alternatives, then to make a compromise. Here are some tips on how to do just that.

1. Repair request compromises. When a buyer makes an offer on a home, especially for top dollar, and gets into contract s/he is unlikely to know of any problems with the home (unless of course they are obvious, as in a fixer-upper, or where the seller discloses defects prior to getting into contract). It is usually not until a buyer has a home inspection that s/he discovers issues that need to be addressed. At this point most buyers will ask the seller to either make repairs or credit money in escrow to fix items that need repair. In extreme cases, where the repairs are very high, a buyer might ask for a price reduction.

2. Price reduction compromises. These are harder for most sellers to swallow, and rightfully so. However, it is always imperative to look at the nature of the problem(s), and again to have an open mind. If your buyers are asking for a reduction in price because the home has old flooring or old appliances, that is something they knew when they made their offer, thus they had the opportunity to take that into consideration already. But if the buyer discovers something s/he could not see or did not know the extent of during investigations – like that the appliances had bad wiring that made them a fire hazard and have lead to their deterioration – that is an issue the seller should seriously consider.. Of course, it all depends on many factors and no two situations will be the same, so it is smart to have an open mind and imagine oneself on the opposite end of the transaction.

http://www.dreamstime.com/-image215143143. Avoiding pricey repairs or price reductions. A good solution for sellers in avoiding pricey repair requests or price reductions is to have a home inspection prior to listing. I do not suggest this to every seller, but only to those who are aware there may be issues OR who live in older homes. It is a good idea to gain an understanding as to what might need to be addressed – the seller can then take care of some items prior to listing to avoid surprises down the road.

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As a seller it is important to fully understand where the buyer is coming from. Minor items are easy to fix, and if they are safely hazards I always suggest to my sellers to take care of them – this not only makes you a good person, but it makes a statement that you understand your buyers want to purchase your home and did not anticipate there were safety issues to be resolved. Sometimes it is important to be able to compromise, just as it is important to limit requests to items that are truly a safety concern or could lead to even bigger problems down the road. Of course, there are different factors in each case so every seller or buyer will need to discuss with their agents.

Buyers too need to understand where the seller is coming from. If a home is in contract for a reasonable price (i.e. the price is in line with the comparable sold properties), the buyers need to take that into consideration when figuring out a reasonable repair request or price reduction. If the buyer is paying a premium for the home then the buyer will undoubtedly expect a home that does not have tens of thousands of dollars of repair work added on top of the price premium – if the tables were turned the seller would feel the same.

The best advice when discussing repairs or price reductions between buyers and sellers of home, is to go into them with an open mind. Sellers who deny any type of aid without trying to understand why the request  was presented could end up losing the sale – and don’t forget that anything a buyer discovers in a home or other type of inspection must be disclosed by the sellers to any subsequent buyers. Buyers could similarly end up walking away from a home they really love by getting caught up in minutiae, so it is imperative to carefully consider negotiation tactics after contract acceptance. Compromising can often lead to a successful close of escrow.

 

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