September means Back to Basics here at Inman. As real estate navigates the post-settlement era with new commission rules, real estate professionals from across the country will share what’s working for them, how they’ve evolved their systems and tools, and where they’re investing personally.
Would you like to convert more listing appointments into signed listings and more offer negotiations into closed transactions? While most agents concentrate primarily on lead generation, your negotiation skills determine how often those leads result in dollars in your pocket.
When it comes to negotiation, which approaches work best? Is it the hard close, collaboration or gentle persuasion? If you’re ready to unleash your negotiation power, here’s how to do it.
1. Begin where you agree
A tried-and-true negotiation strategy is to begin where you agree. For example, when you are presenting an offer or counteroffer, tell your clients the following:
“Let’s review each of the terms in the offer, and you tell me whether that term is acceptable, or if you want to counter that specific term. Once we work through all the terms in the contract, we’ll go back and negotiate those terms that need to be changed.”
When you agree on most of the terms in the transaction, it’s much easier to negotiate the terms that raise an issue.
2. Pace yourself
The “fast-talking salesperson” is a pejorative term that suggests the salesperson will use a quick rate of speech as a way of inhibiting client objections.
A 2023 automotive industry study showed that speech rate and tone impact the customer’s decision to purchase. Specifically, a faster rate of speech can minimize client objections, but if your rate of speech is too fast, it often creates distrust as listeners feel rushed or manipulated.
A different study from the University of Michigan showed that the most persuasive speed at which to speak is about 210 words per minute (3.5 words per second). Faster than that rate can cause people to feel that the speaker is trying to pull the wool over their eyes. However, a faster rate can help to counter objections.
Personally, I have found that about 160 words per minute is a good pace when I’m doing online training, need to be clear, and/or must accommodate both slower- and faster-speaking clients. In contrast, those who speak very slowly (100-120 words per minute) are often perceived as not being very bright.
On the other hand, varying your speed, especially by slowing down when you want to clarify an important point, can be a powerful way to build rapport while also helping you be more persuasive.
3. Create a winning closing environment
While hard closes and manipulative strategies work, the most effective closers rely on collaboration and persuasion instead. Manipulative closes often leave your clients feeling like they lost, and you won. A better approach is to create a collaborative closing environment by asking questions and being a conduit of information.
For example, when you go on a listing appointment, instead of telling sellers where to price their property, show them the MLS comparable sales, and then ask, “Where would you like to position your property in the marketplace?”
If the sellers come back with an unrealistic asking price, Robin Dreeke, the former head of the FBI’s Behavioral Analysis Program and the author of It’s Not All About Me: The Top Ten Techniques for Building Quick Rapport with Anyone, suggests that you avoid telling them that they are wrong.
“When people hear something that goes against their confirmatory biases or contradicts their beliefs, two things happen: first, the logical part of the brain shuts down, and second, the brain prepares to fight,” Dreeke explains.
Instead, Dreeke suggests that when you encounter this type of situation ask a question that allows them to explain their reasoning. For example, “Please help me understand how you arrived at that price.”
If they respond by saying, “This is what Zillow says my property is worth” you now know the basis on the objection and can counter it.
4. Using Dreeke’s approach to counter ‘the Zillow objection’
The best negotiators constantly ask questions. Rather than telling the seller what’s wrong with the Zillow price, here’s how to ask a powerful closing question that lets you bring other AVM (automated pricing valuation) tools into the discussion.
Try saying:
“In addition to Zillow, did you know that there are several other automated valuation tools that are used by major companies and banks to set prices, for conducting appraisals for loan purposes, and to even set values on Wall Street hedge funds? Before you make a final decision about your price, let’s look at what these other tools say. Is that a strategy that works for you?”
Clearly, you should always include your own CMA, however, the quickest way to reach a suite of four AVM tools in one place is to go to realtor.com.
Specifically, once you’re on the realtor.com, search for current listings and what’s under contract. You can use these to locate comparable sales and discuss the price.
Next, scroll down to the bottom and click on “Home Value.” (Both the web and app versions are displayed below.) Note that both display three different values from independent AVMs in addition to whatever realtor.com’s RealEstimate is. (Note the screenshots below are from two different properties.)
In terms of these three independent AVMs:
- Collateral Analytics has 12 different AVMs that are used primarily in the mortgage industry.
- CoreLogic provides a wide array of data and services, and for the real estate industry, it claims the No. 1 listing management platform.
- Quantarium may be the most accurate AVM in that it not only considers exterior features but also evaluates the interior features in its pricing model.
By inviting your clients to collaborate with you on setting the price and showing them additional AVMs, you are side-stepping their objection without saying they’re wrong.
5. Switch up, don’t give up
If your client is still being unrealistic about the price or some other point in the negotiation, Jia Jiang, the author of Rejection Proof, recommends that you apply what he calls the “switch up, don’t give up” approach.
“Before deciding to quit or not to quit, step back and make the request to a different person, in a different environment, or under a different circumstance,” Jiang writes.
In other words, try reframing your question, coming at the issue from a different angle or changing your request to something that accomplishes the same goal in a different way.
For example, if the sellers are not offering a buyer agent commission directly to the buyer’s agent, they may be willing to make other concessions, such as paying for an interest rate buy-down, giving the buyer a credit to repair the roof, or accepting agreeing to give the buyers a 60-day contingency to get their current home sold.
To unleash your negotiation power, pay attention to your rate of speech, be well-prepared, and collaborate with your clients to arrive at the best possible decision. Although you might not get exactly what you want, you’ll have happier clients and most likely a commission check in your pocket as well.
Want more? Check out these other negotiation articles by Bernice Ross
- How to limit the cost of the nibble (and win the negotiation)
- 10 proven secrets for negotiating face-to-face
- Ditch the me-me-me approach to marketing and negotiation
- 7 words you should never, ever say during negotiations
- Negotiating? 10 more words to put on your don’t-say list
Bernice Ross, president and CEO of BrokerageUP and RealEstateCoach.com, and the founder of RealEstateWealthForWomen.com is a national speaker, author and trainer with over 1,500 published articles.
