Negotiation Skills
Understanding people is the first step in being a good negotiator. You will not use these skills so much in getting someone to buy a house, because you are connecting them to a property and letting them make the final decision. You will often need negotiation skills in order to get a contract together.
Once you have written a contract for your buyer, gather all the pertinent backup information to show why your contract is valid. What comparables did you use to come up with the price? Why did you ask for such a high dollar amount in repairs? When you present the offer, be sure to present why your offer was written the way it was written.
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You will only have a moment to determine the personality styles of the sellers when you are presenting your offer. Are they all about the bottom line or does emotion play a huge part? Which one is the decision-maker? Do they give you clues as you present, to make you change how you present your offer?
When you meet the sellers, start with a positive phrase, such as a compliment about their house or the fact that they graciously took time from their day to meet with you. Be courteous and remember that you are a guest in their home as you present your offer. Do not be confrontational if they bring up unpleasant objections. Instead, make note of their feedback and thank them for their input.
If you think that the sellers are “numbers people,” show them the comparables you used and explain why you believe their house is of similar value. If their style is emotional, a little background information about your buyers can help the sellers feel connected to them. You might say, “My buyers think this bonus room will be great, because they are expecting their second child.”
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If the price of the house concerns the buyer, break it down into manageable segments. “At the current interest rate, this increased price is actually only one hundred dollars a month, just over three dollars a day. That's the cost of a latte. Are you willing to make the small sacrifice of your daily coffee run to get this wonderful house?”
Do not criticize the sellers' house. While it may seem an obvious and easy error to avoid, you may be surprised how easy it is to do. Words such as, “my buyers will need to remodel this kitchen so they deducted the cost of the remodel from their offering price” will not work as well as, “we used this comparable because it has a kitchen similar to yours.” Similarly, most sellers do not want to hear that your buyers can't afford more than what they offered. In their mind, that buyer is saying, “I can't afford the house, so just give it to me.”
Negotiating on behalf of your seller is equally important and should be handled with the same level of respect and tact. You should use your own set of backup materials and show the buyer why there is value in the property you are selling. Remember that the buyers are making what is likely the biggest investment of their lives. They may have fears and concerns. As you discover what their fears are, you will be better able to negotiate with them.
Keep your negotiations simple. If the buyers bring you an offer with lots of contingencies, let them have whatever contingencies they want, but simplify it by making them all come due at the same time. If the seller wants his closing costs covered by the buyer, ask the seller to add it to his final counteroffer price instead. This will allow the buyers to wrap those costs into their loan and it won't change the seller's bottom line.
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Don't try to overnegotiate. If your seller is willing to sell for a lower price or your buyer is willing to pay more, let it be. You should surely counsel them if you think the decision is unwise, but ultimately you must follow their wishes.
