If you want to negotiate more effectively and close more deals, there are four critical sentences to add to your negotiation toolbox.
Due to the strong market from 1998 to 2007, we have a whole generation of agents who did not have to learn to negotiate. With today’s tough market, however, great negotiation skills are mandatory if you hope to survive and thrive.
Although you may not agree with this list (feel free to add your own thoughts in the comments), here are four sentences to master if you’re serious about negotiating and closing more deals.
1. "Maximum exposure to the marketplace produces maximum price"
This sentence is critical when working with sellers, especially if you want to obtain more listings and receive a full commission. While most sellers like "discounts" (a word you should never use), they also want premium service. Very few agents explain the services they and/or their company provide that help the seller obtain the best possible price in the shortest time.
To protect your commission, be proactive. Don’t wait for the sellers to raise the commission issue. Instead, circumvent the problem by taking the following steps. Begin by asking, "Would you like to achieve the highest possible net price for your property?"
Almost everyone will answer, "Yes."
Follow up by saying, "Then with your permission, may I show you how our premium marketing plan produces the maximum exposure to the marketplace that results in the maximum price for your property?"
At that point show the sellers all the places where their listings will be distributed. Better yet, many Web site companies track how many of those leads came from various sources. Showing the sellers the actual data from another one of your listings is a powerful tool for converting that appointment into a signed listing.
2. "It’s your house and it’s your decision"
This sentence is as much for your benefit as it is for your clients. Many agents make a huge mistake when they insert themselves into the client’s decision-making process. A typical example of this occurs when an agent says, "I would never let my clients accept an offer that low!"
As an agent, your role is to be a conduit of information rather than the decision-maker. This is especially true for Gen X clients who want to do everything their own way. When you feel the urge to advise your clients, resist by reminding yourself, "It’s their house and it’s their decision."
3. "It’s your choice — what would you like to do?"
This sentence can be used in almost any closing situation. For example, when a buyer or seller asks your opinion about how to bid in a multiple-offer situation, you would respond in the following way: …CONTINUED
"There are four ways to negotiate in this situation. The first is to make an offer as if there are no other competing offers. If you really want the house, the second approach is to offer close to asking price.
"If you absolutely must have this house, the third strategy is to offer full asking price or slightly over asking price. The fourth option is to withdraw your offer and see what happens. It’s your choice — what would you like to do?"
By placing the client in control, you eliminate virtually all pushback that you would normally experience in this type of negotiation situation.
4. "Where would you like to position your property in the marketplace?"
This is an extremely powerful sentence to use when negotiating with sellers about their asking price. Many sellers have a mistaken notion that they or the agents are responsible for the prices at which properties sell. In truth, the real estate market is like the stock market — it’s the buyers who determine what the selling prices are. The example below illustrates how to use this powerful strategy.
"Mr. and Mrs. Seller, you control three of the critical things that will influence how quickly your house sells. These three things are the condition of your property, how easy it is to show the property, and the price or the ‘positioning’ of the property in the market against competing properties.
"As your agent, my role is to handle the marketing. Ultimately, however, it’s the buyers, rather than the sellers or agents, who decide the price where the property will sell."
Here’s the second way to use this powerful sentence, assuming there is 10 months of inventory on the market:
"Mr. and Mrs. Seller, you now have an important decision to make. Are you going to position your property where it will be in the 10 percent of the properties that sell next month, or are you going to position your property where it will still be listed next month? It’s your choice — what would you like to do?"
The script above is a powerful close that drives home the market conditions but still turns the final decision back to the seller. If the seller elects to position the property at a price where it won’t sell, thank the seller for the chance to discuss the marketing of their property and politely walk away.
If you want to expand your negotiation toolbox, these four critical sentences provide a solid foundation that will work in almost any negotiation situation.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books. You can reach her at Bernice@RealEstateCoach.com and find her on Twitter: @bross.
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