As Herb Cohen said: ‘The World is a giant negotiation table. and whether like it or not, you are a negotiator.”
And similarly, Chester L. Karrass said, “In business, you don’t get what you deserve, you get what you negotiate.”
And this is very true for the real estate business. In the competitive world of real estate, having the ability to negotiate well is crucial.
Here are 3 tips that will up your negotiation game and help you get the best deals.
1. Meet the Seller in Person
One of the best negotiation tips I can give you is to meet the seller and negotiate in person.
In a market full of investors where the seller is probably getting similar offers, your interaction with the seller might set you apart from the rest.
When you meet the seller, you can read their body language and understand their emotions. This reduces the chances of misunderstanding and allows you to improvise accordingly.
Think about it. Doesn’t a person feel more familiar face-to-face rather than over the phone?
People prefer doing business with people they know and can trust. A face-to-face negotiation can give you that edge.
Bonus Tip: Meet the seller when you can have their undivided attention – which is usually not possible in open houses, so avoid negotiating there.
2. Focus on the first 5 minutes
A study published in the Journal of Applied Sciences showed that the first five minutes are the most important. In other words, the outcome of your negotiation depends heavily on how your first 5 minutes go during the interaction.
In these five minutes, the seller is examining you thoroughly. So what should you do in these critical moments?
These five minutes are when you should have a “conversational engagement, prosodic emphasis – which means you should copy the speaker’s emotional state – and vocal mirroring.”
Actively listen to the other party to build a connection. Have an authentic conversation. Be empathetic and friendly.
Be confident. If you begin confidently, it will convince the seller that you know what you are doing.
You can also mirror the other party. Respond to their question with another question. These signals will show them that you are trustworthy.
Once you know how to set the tone, your chances of getting a good deal will instantly shoot up!
3. Knowledge is Power
In his book “You can negotiate anything,” Herb Cohen says that 3 things have a massive impact on all negotiations. These are:
- Time, and
According to the president of Coldwell Banker Realty, Greater Chicagoland, “The person armed with the most amount of information is more likely to win the negotiation.”
Gaining all the relevant information will give you a boost in confidence.
A few things you should know before negotiating are:
- Market Time
- Average Market Time for similar homes
- Average Market time as a whole in the market
- Square Footage
- Homeowner Association Footage
Learn more about the market. Is it a buyer’s market or a seller’s? Is there an excess of supply?
Read up on successful real estate investors. Educate yourself on zoning rights, finishing, and amenities. Build relationships with the city planners.
If you think you have tons of information, don’t be shy and dig up some more!
Your knowledge can be the power that gets you a good deal. The more knowledge you have, the more you will be able to identify the seller’s motivation and the more advantage you can take from the situation.
Bonus Tip: Always look from several sources for the information – they can come from different places!
Once you bring all these negotiation tips into action, you will see the difference. Sure, it might take some time and effort, but these tried-and-tested tips will increase your chances of creating a win-win situation and getting the best deals.