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Negotiation is a must-have skill in the real estate industry. Negotiation is not only a skill but is also an art and science. It requires a lot of training, experience and of course a bit of luck. We cannot do much about the luck factor but we can always keep certain things in mind to help us negotiate better.
Listed below are 10 tips that will help you become a negotiator. These tips are tried and tested, some by industry-leading real estate experts and some by major universities like Harvard. So, if you want to become a successful negotiator, keep reading this blog until the end!
10 Real Estate Negotiation Tactics Every Buyer and Seller Should Know:
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Don’t get too excited
Now first up, do not get too excited about a deal. This doesn’t mean you should not show any kind of excitement at all, it will imply that you might not be interested in the deal at all. So, have a slight amount of excitement showing, but stay calm and composed. One easy way to ensure this is to talk less and listen more.
Asking questions makes you seem interested in the deal too but make sure you don’t go overboard with questions. If you come out as not too excited about the deal, the intimidation and fear of losing the deal will definitely get the best of the offerer. Use this to play out your cards right and with the right approach you can close the deal with your desired offer.
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Accumulate Knowledge
Try to gain some kind of valuable insight from all your deals. Keep educating yourself about the real estate industry as it is growing and changing at all times. You can use this dynamic nature of the industry to your advantage and always come out more knowledgeable than the other person.
This makes you seem a little intimidating which as we discussed above, helps you in negotiating and closing the deal.
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Stay Composed and watch your facial expressions and body language
Your Facial Expressions and Body Language matters a lot more than you realize. But this needs to vary depending on who you are talking with. Crossed arms might indicate a disinterest in the deal while having a confident smile might indicate your expertise on the subject. Be cautious of your facial expressions though as they can also sometimes be impulsive and cause the offerer to notice.
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Counter at List Price
This one’s for all the sellers. Do not make the initial offer, let the buy view the property and initiate the negotiation. When they come up with an offer, counter it with your list price. Many sellers give out the list price at the very beginning and hence the buyers lower their offers as a result you have to lower your counter offer and it goes way below your list price.
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Put an expiration date on your offer
Putting a deadline on your offer makes it seem more serious. It also psychologically makes the party make decisions quicker and there’s a high probability that they’ll accept your offer. And if they don’t, they’ll counter with an offer that is not very far from your offer.
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Negotiate in person whenever possible
Establishing trust and making a connection is a lot easier when you go meet the other party in person. This is a psychological trick that makes the other party feel like they are negotiating with someone they know and can trust. This makes it so that you do not feel like an “anonymous identity” or any other faceless person. Simply put, negotiating in person makes you stand out from the online offers and that dismisses an entire pool of other people who might be interested in the offer, i.e., the people from the internet.
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Target the buyers’/sellers’ non-financial needs
Let’s talk about non-financial needs. It may refer to any other benefit that the buyer/seller may derive from the purchase/sale of the property. Let's say for instance, you are a buyer, purchasing a residential property from a seller who hasn’t had any success in recent times, you can make them lower their price by convincing them that this purchase will add to their marketing.
On the flip side, let's say you are a seller, and you are selling a residential property to a first-time buyer. You can close the gap between both offers by aiming at some non-financial needs, again for instance, you can say something like, “Don’t overthink your first home!”
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Make the other person feel that they are in control
Another well-studied psychological trick is to make the other party feel like they are in control from the beginning. Make them feel like they are involved at all steps in the decision-making process. This gives them more space to make errors, which is exactly what you want. For instance, to make someone agree with your requests, you can say something like, “I’d love to propose a path forward, but you are always free to turn it down if you don’t like it.” This makes them feel involved and hence, there are fewer chances that they’ll turn the offer down.
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Don’t come out desperate
Now this one’s a basic tip. Do not come out as a desperate person. This will make the other party feel completely in control which will come to bite you when negotiating. Yes, you want the other person to feel like they are in control, but do not let them completely take over the negotiation.
Have a body language that asserts dominance but does not make you seem overpowering. Have a positive and inclusive demeanor overall.
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Establish the “Know, Like, and Trust” factor
And for the final tip, you must establish some kind of relationship with the other party. The easiest and the most researched approach to establishing a relationship with a negotiating party is the “Know, Like, and Trust” approach. Know the other party, their expectations, their non-financial and financial needs, etc. Make them like you, have a positive attitude, and make them feel involved in the entire process. Following these two steps will make it much easier to have the other party trust you. And once the negotiating party trusts you, they won’t hesitate in closing the deal near to your initial offer.
And that’s about it! These were the 10 Negotiation Tactics that you as a buyer/seller must know about. Now that you are aware of these tactics you can ensure that you don’t fall victim to any scammers or fraudsters that might use some of these tactics to manipulate you into the deal!
