Be prepared to do the “take away”
As a real estate investor and coach, negotiations are a part of my everyday life. As a Realtor, Seller or buyer the art of negotiation can mean the difference between great success and dismal failure. Everyone should take a lesson in the art of negotiation as it is an integral part of your life and your business. Artful negotiation is what separates the men from the boys so to speak. Can you say as a Realtor that you are a true negotiator or just the presenter of an offer? If you are a true negotiator, then selling yourself to potential clients should be like breathing in air. Once people realize that you have the power to make deals happen and make everyone in the transaction happy or at the very least feeling good about the deal, then you are worth your weight in gold...Add this to your resume or marketing campaign "I am a skillful negotiator"
You have to know your opposition in the negotiation game and understand their motivations. Successful negotiation is when both sides feel like they walked away with what they wanted. This is a true skill and anyone who is in the real estate business knows that this can be the most difficult, challenging part of your job, but it is also in my opinion the most rewarding when done right.
When it comes time to making a deal of any kind, you first must establish your bottom line. In other words it is sort of like gambling. If you go to the casino with a set amount of money that you are willing to lose and walk away from it when that money is gone, then YOU are in control of the situation. If you do not have a plan then the casino is in control of the situation. All too often it is the latter.
As a buyer and especially if you are a real estate investor, you have to have a ceiling or a maximum amount that you are willing to pay in the back of your mind and stick with it. Start lower than that of course, but walk from it if your ceiling is broken. They say in the real estate investment world your profit is made at the time you buy the home, think about that for a moment! If you go over "the budget" so to speak you are eating right into your profits right off the bat. Not a good way to start.
If you are a seller it can be a little more difficult, you want to set a price at which you will not go below, but you also have to take into consideration your carrying costs to hold the property whether you are a real estate investor or not. You want to get that home sold as fast as you can for as much profit as possible. This is where a good Realtor comes into play to help you determine where that fine line falls.
As a Realtor you are the one that has to make the two ends meet if the buyer and seller are too far apart. Many times quick action in other words thinking on your feet is required to make the deal come together, strike while the iron is hot so to speak. I remember when we were selling one of our first homes and we were back and forth on the price. We countered one last time to the buyer, our Realtor was on the phone with the buyer and it looked like they would walk. This was the first good offer in months. Our Realtor said to the buyer as soon as there was hesitation on the buyers part that they were only talking about $50.00 a month more over the term of the loan and were they willing to lose the home over this small amount...That was a lot better than focusing on the few thousand dollar more that we wanted on the home. It worked and they accepted our counteroffer.
The whole point is if you find you are in a negotiation that is not going to go anywhere, you walk...I know it is easier said than done, but you have to be in control of the situation and not let others control you. This is true not only for buyers and sellers but for Realtors dealing with potential clients. If they are making you jump through hoops that you would rather not or they are not worth your time and effort...walk away.
Negotiations occur in all phases of life both business and personal. How about negotiating with your spouse, family members or friends...this can be especially tricky as personal feeling are involved. You may have to do a little more compromising in these situations, but true negotiators get what they want and the other party feels as though they got what they wanted...big difference from compromising.
So review your business and personal situation and consider how you can hone the art of negotiation.
Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1000 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US www.CoachingByPeter.com.