6 Powerful Tips For Property Agent To Be A Skilful Negotiator
The word ‘negotiation’ refers to a process where two (sometimes more) parties with different goals and needs discuss an issue to determine a mutually agreeable solution. But it’s not only in the business world that negotiations occur; they occur in our everyday lives as well. In fact, the only way we get what we want from another party is to negotiate, and that may be with a family member or friend, a co-broke agent, vendor, or client.
Negotiating is a way of getting what you need from another party and it requires give-and-take. Of course, if we lived in a perfect world, parties to a negotiation would work together to solve problems, try to understand the other side’s position, and make decisions based on merit in order to reach a mutually agreeable solution. But because trust is required on both sides, this usually doesn’t occur. One side typically wants to one-up the other party, which means that the negotiation becomes a compromise, whereby one party wins and the other party loses.
Unfortunately, the word used to describe the party we’re negotiating with is ‘opponent’, and I say unfortunately because the word ‘opponent’ reinforces the concept of a winner and a loser. However, opponent is the only appropriate word because negotiations are, in fact, contests.
The Golden Rules of Negotiation
Do you remember the golden rules of negotiation? Treat other people as you yourself would like to be treated; meaning treat others politely and with the utmost respect. Listen carefully and really try to understand what the other side is attempting to convey. Ideally, your interaction will be courteous and constructive, resulting in a win-win for both parties.
A successful negotiation could be defined as one whereby you are happy to make concessions that are not of the utmost importance to you, while giving the other party something that is very important to them. Regardless of the differences in your interests, your approach should foster goodwill.
A skilled negotiator understands from the onset what both parties want and is willing to do the work to ensure that everyone walks away from the negotiation satisfied. Their aim is to ensure that everyone is happy, including their ‘opponent’. The act of good negotiating means that each party leaves satisfied, prepared to do business with each other in the future.
Good negotiating skills are especially important when it comes to business success because they help you build better relationships, help avoid future conflicts and problems, and deliver quality, lasting solutions.
My Personal Experience with Negotiating
In my earlier years as a property agent I did my share of successful negotiating and I have learned a lot along the way. Today, I want to share some of the lessons I learned on successful negotiation over the last two decades in this industry.
1. Preparation is Key
Negotiating takes preparation and tenacity. Know what objections you may face and have questions prepared to overcome them. The only way to predict potential objections is to understand who you are negotiating with. Put yourself in their shoes and try to see things from their point of view. Know something about the person and/or business and their background.
2. Do More Listening than Talking
I have observed many Property Agents make the mistake of asking questions, but not waiting to hear the answers. The person asking has control over the way the conversation goes. Of course the questions you ask are important but waiting for the answers is even more important.
Train yourself to be comfortable with silence while you wait. There’s a reason why we were born with one mouth and two ears!
3. Quickly Identify the REAL Problem
During my experience in negotiations, I some of the problem and the solution might be noticeably clear. In other cases, however, the root problem might not be so easy to identify, or there may be a number of aspects to a problem. Make sure that you take the time to uncover the real issue by analysing the information you have whilst always carefully avoiding biases.
A successful negotiator has a clear understanding of the outcome they are seeking. This means they know what the real problem is, not just the most obvious one.
4. Learn to Use the Framing Effect
The principal of the framing effect is that our choices are influenced by the way they’re framed, through various wordings, situations, and settings, which ultimately has a powerful effect on decision-makers.
In fact, the framing effect has proven over and over again that it’s one of the strongest biases when it comes to decision-making. The ways in which framing can be used is almost unlimited, from social pressure, to emotional appeals, and priming.
Our perception has a lot to do with how we view our world. For example, have a look at the following image, which is often used to show just how our perceptions differ.
When negotiating, you can use your knowledge of similar effects.
The framing effect is a type of cognitive bias that causes us to react differently to information based on how it is presented to us. Consider the following example -
Which sounds better? 80% fat free sounds more healthy than 20% fat, isn’t it?
What does this mean in negotiations?
An inexperienced negotiator will enter into negotiations with the ultimate goal of winning, which is a completely incorrect and ineffective way of handling a negotiation.
When a negotiation is framed as a win-or-lose situation, it’s already inferred that someone is going to lose. And who likes to lose? Nobody. Now you have to try and convince the other party to accept defeat. On the other hand, an experienced negotiator will frame the negotiations as a win-win situation.
Keep in mind that you are not necessarily changing the end result. You are simply changing the way you frame the conversation.
5. Be The First To Throw A Number
My experience has been that, when it comes to negotiations, you should always be the first party to offer up a number. Why is that?
Because the starting number sets the tone for the rest of the negotiation. Being the first to state a number puts you in control of the starting point of the negotiations.
This practice is called ‘anchoring’.
Regardless of whether your number is extremely high or extremely low, it will be you who steers the remainder of the negotiations.
By suggesting a very high number, you have now biased the negotiations to go higher. This ridiculously high number will typically be disregarded; however, by offering up a high number you are already angling for a higher price than if you came in much lower.
For example, as a property agent, you know you need to earn a minimum of 2% commission for your resale listings to cover the high marketing costs, you should start your negotiation at 3% with a premium marketing plan which costs more than a standard plan.
If your clients object, saying the average commission in the market is 1.5%, you can then illustrate how your premium marketing plan will likely get them a higher selling price because of the large exposure to the listing. If your clients still insist they do not want to pay 3%, you can always offer a lower commission of 2% with a standard marketing plan.
With this technique you still get what you want before you are at the negotiation table.
6. Be Prepared To Compromise
All relationships require some level of compromise. A Property Agent and client relationship is no different. There must be give and take. In many instances you will have to give something up in order to reach a mutual agreement.
You’re going to react negatively if you come to the negotiating table unprepared and the other party strong-arms you, forcing you to forfeit something that you considered valuable. You will become defensive, to the point whereby the negotiations are no longer a compromise – they have just become a battle.
Alternatively, if you prepare for the negotiation by pre-emptively planning to compromise on one or two factors, you are in a stronger position. You walk into the room fully expecting to concede to one or more issues, and when you do, there will be no need to become defensive.
Always be prepared to compromise, and ask yourself “What am I happy to concede here? On what points of this negotiation am I willing to compromise?”
By keeping your focus on what’s really important you will be happy to concede on certain minor points and not derail what could be an otherwise good deal. Keep the areas of compromise in mind so that when the time comes to make a deal you are able to react in a positive manner.
In Conclusion
The secret to being a skilful negotiator isn’t in the bravado: it’s in the silence. You do not need to be heavy or rude.
Listen to what the other person genuinely wants. Figure out how you can work together so you can both achieve your goals.
Each and every one of these negotiating strategies is powerful, but when used together their effect can lead to highly successful results.
Always keep in mind: As a property agent and entrepreneur you want and need referrals from clients. It’s highly likely that you will work with this client again, so be kind and keep your interactions positive.
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To Your Success,
Gary Chua is the co-founder of Navis Living Group
—A 1300 agents-strong division with Huttons real estate agency, and the fastest growing group in this competitive industry. Gary is also a mentor to many real estate agents and team builders, for two decades and counting.
Before devoting his work full-time to grooming realtors, Gary was himself a distinguished real estate salesperson. He first stepped into the industry at age 30 in Year 2000 and having been Top 50 Achievers in his 5 years of sales, he understands the hurdles and challenges facing both new and experienced agents, and is thus equipped with a wealth of knowledge to aid and teach the property agents whom he takes under his wings.
In 2005, Gary realised that his true calling was to groom and coach the next generation of real estate agents. It was also the year that he consciously diverted almost all of his time and effort into recruitment activities, putting his personal sales aside and taking a hit in his bottom line.
Through sheer grit and determination, Gary's vision took hold as his team expanded, eventually growing to become the largest division in its agency, and also one of the largest in Singapore. It cultivated numerous top producers and achievers throughout the decade—some of whom have clocked in more than S$1,000,000 in commission in a single year, broken many sales records, won many local and international awards, and helped many real estate agents achieve outstanding results and realise their financial freedom.
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