Negotiate The Best Deal In Real Estate

The ability to negotiate is one of the most important skills a realtor can have.

Remember this guy? The boss from the movie Office Space? The guy who saunters up to his employees and somehow gets them to agree to work all weekend with no promise or recognition or reward? The boss wins and the employee loses, and there’s a valuable lesson out of this in terms of real estate. 

The person who is prepared, who knows what they want and how to say it, will always win in a negotiation. Though the employees knew what was going to happen, they never prepared themselves to get what they wanted, and so the boss always won. I see a lot of mediocre real estate agents who have represented their clients in a similar fashion over the past few years. They have have gotten away with poor or a complete  lack of negotiation skills.  This evolved through an extended sellers market,  which forced buyers into a take-it-or-leave-it situation. If you wanted a house, there was no negotiation;  you just conceded to what the seller wanted. These days are gone.

Real Estate Negotiation separates the great real estate agents from the rest of the pack and it’s one of the only things a client remembers about buying or selling a home long after the deal is done. So what goes into making an excellent negotiator?

Extensive Local Market Knowledge

I’m not referring to access to the MLS (which anyone can do) but real knowledge of the community, schools, trends and local statistics relevant to that community. Simply saying that interest rates are low, or regurgitating the latest real estate article in the Globe and Mail isn’t really getting to the point. There is a lot more that goes into choosing a negotiation strategy and this includes knowing your local real estate market inside and out. Statistics such as days on market, sold to ask ratio, absorption rate, employment trends, future development, schools, immigration patterns and population forecasts just to name a few. All these factors have an affect on present day values and future values, and these factors change depending on what community you are working in. You simply can’t get this information from the MLS, and if you don’t know the information you can’t negotiate the best deal.

Experience

In today’s culture of instant access to information, the experience of doing something over and over again is highly under rated. In real estate there is no book out there that tells you how a home owner is going to react to a low ball offer, or when it is a good time to negotiate versus standing firm on your price. Experience tells you when you have an advantage and when you don’t. As Kenny said, “You better know when to hold’em, know when to fold’em…” I’ll be the first one to admit, there has never been a time where so much information is available out there, and for free! Want to know what an MBA knows? Just go on Apple I Tunes U and watch the lectures. Want to become a stock trader? Just google stock trading and read hundreds of blogs on the subject. The problem is that while you can access the same information as a successful professional, you will never be as good because the secret of  success in any field is not access to reports, but skill, knowledge and experience, something that takes time to build. This applies to negotiation. A big part of negotiation is knowing your strength in any given situation, and this comes from experience.

Training

A great real estate agent is always learning, taking courses and attending seminars because there is always something new to learn on negotiation. Not just on real estate fundamentals, but on other things such as human psychology, negotiation, body language, new technology and anything else that helps us negotiate a better deal for our clients in a competitive real estate market.

There you have it, three important factors that go into making an excellent real estate negotiator. With change in the wind for our real estate market, I think negotiation in real estate will be more important than ever.

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