Tuesday, June 23, 2009
Inman News <http://www.inman.com>
Editor's note: The following is a guest perspective by Rich Levin, a real estate coach and speaker.
Most agents have little or no specific training in negotiating, though it is a major component to an agent's success.
Negotiating is a skill like any other that is awkward at first and improves with practice. Some of these rules will take some time to implement effectively. Others you will be able to apply immediately. (Some of these rules refer to a situation in which you are presenting and negotiating directly versus through the other agent.)
Rule No. 1: Do not go back and forth between the buyer and seller more than twice or you make them crazy. At and after the third round, your chance of making the sale drops dramatically.
1. In the first round the buyer and seller are thinking about buying and selling the home.
2. In the second round the buyer and seller stop thinking about buying and selling the home and start thinking about the money.
3. At and after the third round they begin to resent each other. Both buyer and seller lose sight of the home and money. They begin to make it personal and focus on the other party.
Your buyers and sellers are not experienced negotiators. In fact, most have only experienced the often-negative negotiations when buying cars. So, they are predisposed to fear and discomfort in a negotiation. Others get caught up in the fight and just want to win no matter the cost or loss. Either way, these predispositions make it a lot harder for you. And you can avoid it if you shorten the negotiation.
Rule No. 2: Don't let the buyers and sellers come to dislike each other.
You take responsibility for what you convey to all parties. The most frequent reason buyers and sellers come to dislike each other is because the agent talks about one party to the other. So if you hear your client or yourself beginning to disparage the other client, intercede and suggest that whatever the reasons for the client's behavior might be, let's focus on putting together the sale and getting the move completed.
Rule No. 3: Stay focused on the goal of completing the sale.
Never let interruptions, the other party's emotions, emotional outburst, personality, position, or anything else distract you from the issues and the concessions that lead to completing the sale.
Stay calm. Listen. Empathize. Do not get involved in conversations about the party's personalities. Do not get emotionally hooked by the emotions of the client. Be a professional. Whether your clients know it or not, they want and need that kind of focused objectivity from you.
Rule No. 4: People believe what is in writing.
So, support your position in writing. If a comparative market analysis supports your position, prepare it. If certain comparables support your position, provide them. If a report supports your position, copy that portion and use it.
And most of all put your offer in writing. Don't negotiate verbally. I realize that it can work many times. I realize that some agents will insist on it and there is little you can do at those times. Please for your sake and for your client's sake make those times rare. Verbal negotiations are fraught with potential problems, misunderstandings, misinterpretations, omissions, as well as simple changing of minds. Put every step of the negotiation in writing.
Rule No. 5: When you give a concession, ask for something in return.
You may not get anything in return but asking dampens the motivation to ask for more. The seller wants another $3,000 in price and the buyer says, "If I accept that, I want the kitchen appliances." The seller says, "OK," and so the buyer says, "We have been thinking about it and we want the washer and dryer, too." The seller says, "OK."
So the buyer then asks for ... you get the idea. If the seller says "no" the first time, even if he or she ultimately ends up giving up the kitchen appliances to make the deal, asking for something in return dampens the buyer's motivation to ask for more.
Then, at the structural inspection or at the pre-closing inspection the earlier dampening of the buyer's motivation carries forward and dampens the buyer's motivation to ask for too much later.
Rule No. 6: Never take the first offer too quickly or easily.
It sends a message that may make your job more difficult later. When you have an offer accepted quickly, wait a few hours to call the buyer. Then, don't emphasize that it was easy.
On this same topic, don't tell the buyer they have bought the house or the seller they have sold the house just because they have an accepted offer ... because they haven't. The house isn't sold until there are attorneys' approvals, approved inspections, a mortgage commitment and all other contingencies are removed.
Instead of saying, "Congratulations, you got it," say, "Congratulations, you are on your way. We want to get the attorney's blessing, get through the structural inspection and get through the bank process. I don't expect any problems so I think you have a great home."
Rule No. 7: Never gloat.
I remember walking into a seller's house with a full-price offer, all cash, and only attorney's approval as a contingency. It had the closing date the seller wanted, no personal property. I was proud and pleased. This one was going to be easy.
So I strutted in with swagger and a smile. I said, "You guys are gonna love this offer."
Well, as you might expect, they questioned me and challenged me about everything from the legitimacy of my buyer to where their cash was coming from -- all because I didn't have the good sense and sensitivity to realize these people are moving their lives. I treated it like a game and they quickly reminded me of the offer's importance to them.
The next time I had the situation I talked about how hard I worked to get them as much of what they wanted as I could. I couldn't get it all but I hoped we were close enough to come to an agreement. They looked at the great offer and said, "Rich, you did great. We can accept this as it is." Lesson learned.
Rule No. 8: When you hit an impasse, settle everything else first and return to it.
As you present the offer to the seller and you reach an item they don't accept, make a note to come back to it and get agreement on everything else first. Then, once you are through the offer completely, you will have isolated all the items, if there is more than one, that requires negotiation. You will find that at that point the negotiation goes easier. There is nothing else on their mind and they know that this item or these items will complete the transaction. By doing this you create a momentum that carries you to success more easily.
Rule No. 9: Get the other party to negotiate with themselves. Never negotiate with yourself.
This is a more aggressive rule. Above, in Rule No. 4, I said to always get your negotiations in writing. This is the exception that proves the rule.
Watch. I am sitting with the seller reviewing an offer by the buyer's agent. The seller is willing to accept it and doesn't want to lose the buyer or the sale. I say to them, "Let's see what I can do without risking the sale."
I call the other agent and ask if the agent can reach their buyer. They say, "Yes." I tell them that the sellers are in the room and they are really close to accepting the offer. If we could get another $1,500 it's a done deal. Could they check with the buyers and see if they would move at all? And if they will, I want to get it wrapped up tonight while everyone is in agreement.
Ten minutes later the agent called to tell me they'll do it or they'll do $500 or $1,000 or nothing. A vast majority of the time I'll get more and make the seller very happy with me. If the buyers won't move I call the buyer's agent back in five minutes, tell them that their offer was accepted as is, and compliment them on their smart negotiation.
You may or may not approve of this methodology. I am not condoning or condemning it. I am just using it as an example of, "Get the other party to negotiate with themselves. Never negotiate with yourself.
Rule No. 10: Do not use these rules and approaches carelessly.
When these rules are applied or are done awkwardly or carelessly they cause your clients to distrust you. Be careful.
Done with care and confidence (and practice), you are going to have a lot more fun, be a lot more productive, preserve more time, and get the admiration and referrals from your clients because you will make them more comfortable in addition to getting them more money with your negotiating skills.
Rich Levin <http://richlevin.com/rich_levins_final_richbio.aspx> is a real estate coach and speaker. He has worked as a real estate agent, manager, and broker-owner.
Tuesday, June 16, 2009
Are you done doubting yourself?
That's an easy question for Helen Phillips.
Last month Helen wowed the world with her dramatic transformation on the NBC show The Biggest Loser. At 48 years of age she is the oldest contestant to win the weight loss competition, shedding 140 pounds and 54.7% of her body weight.
I'd call losing more than half of your body weight a huge accomplishment - wouldn't you?
The crazy part is that Helen was clearly the underdog. She was simply too old and too fat to win. At least that was what the other contestants thought.
And that's what Helen thought too.
"I never believed in myself in the beginning," she admits. However when a doctor told her that she was living in the body of a 60 year old woman, Helen got serious.
"I'm tired of doubting myself," she decided and something inside of her head clicked into place. "The minute I started doing that, things changed for me."
And, oh, how she changed.
Helen buckled down and made losing weight her only focus. Her hard work paid off, giving her the prized title of the Biggest Loser.
She accomplished something huge and now her life is vastly improved. "I feel so good! I feel like I can do anything," she told reporters with a huge smile.
Helen also had a message for you. "If I can do it, you can do it."
I have to agree with her.
If a 48 year old, 257 pound woman can transform her body from a size 22 to a size 2, then anyone really can do it. Think for a moment of that huge accomplishment that you haven't made. Maybe it's a weight loss goal that you've had for years. Maybe it's something completely unrelated to your weight.
What's holding you back?
Are you afraid you'll fail?
The fear of failure is a powerful thing. No one likes to fail, and repeat failure is even worse. So what can you do to conquer it?
• Realize that failure isn't the worst outcome. Not trying is.
• You only fail when you decide to give up. Get up and try again!
Are you afraid you'll succeed?
You may not realize it, but most people fear success. Success means change and change can be scary. It is important that you embrace the idea of success and ditch any negative self talk.
• Close your eyes and picture yourself accomplishing your goal. What will that accomplishment do for your life? List the benefits you'll enjoy.
• Spend a few minutes each day visualizing yourself accomplishing your goal. How great does it feel? Savor those victorious emotions and use them to drive your motivation.
Helen didn't believe in herself, until one day she decided that she was done doubting.
Are you done doubting?
When you're ready to transform your body, like Helen did, I'm here to help. Is NOW a good time? Call or email, and let's get started on a program that will really improve your life.
It's your turn to accomplish something huge.
While being interviewed after her victory Helen revealed the secret behind her staggering weight loss. "Who knew diet and exercise really were the answer?" It always comes back to diet and exercise. When it comes to losing weight forget about the fad diets, the pills and the potions. Focus on your diet and focus on your exercise plan then you too will see amazing results.
Click here to request your FREE Consultation
W8trainHer Fitness, LLC
8775 East Orchard Road, #819
Greenwood Village, CO 80111
www.w8trainher.com (Coming soon!)
Monday, June 15, 2009
Do you have ideas that will make www.homesincolorado.com a better website? Now is your opportunity to share your knowledge and opinions to help keep homesincolorado.com the dominant and premier real estate website in Colorado.
Join the Website Redesign Focus Group Meeting - Monday, June 22nd at the RE/MAX Alliance Westminster office.
RSVP to firstname.lastname@example.org
Sunday, June 14, 2009
"People want to connect with people," Hanks says, going on to quote friend Jeff Turner of Real Estate Shows. "Social networking is about YEO - you engaging others."
And if you can learn quickly and follow the rules, Hanks says, there's tremendous business potential in social media.
"You can build a referral network and collaborate with experts to get answers to real estate questions," he says. "You can connect with past clients, prospect for new ones, market your services and improve your search engine optimization by expanding your Web footprint. And, what makes it even better is that it's all free to start."
The down side? Hanks warns that social media can suck all the time out of your day.
-- Excerpt taken from RE/MAX Times 6/2/2009. Please read the entire article in it's entirety on Mainstreet by clicking here.