The Natural Negotiator
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Are you a strong real estate negotiator? By enhancing your skills you will be increasing your value to both buyers and sellers! Don't get beat in the market explore this PowerPoint presentation by Jim Remley and then jump on to erealestatecoach.com to learn more!
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The Natural Negotiator
- 1. The Natural NegotiatorThe Natural Negotiator
- 2. Let us never negotiate out of fear, but let us also never fear to negotiate. -- John F Kennedy
- 5. The Third AlternativeThe Third Alternative • People • Interests • Options • Criteria
- 7. Understanding Your ClientsUnderstanding Your Clients • Open Ended Questions • Active Listening • Empathy Driven
- 8. Goal of Preparation is to RemoveGoal of Preparation is to Remove SurprisesSurprises • Mirror Technique
- 9. KISSKISS YourYour ClientsClients •Simple Stat’s: Global to Local •Explain process and give them something to do.
- 10. Expect SuccessExpect Success •The Danger of Failure Anticipation. •Begin moving them towards the end result immediately. •Establish Strong Lines of Communication.
- 11. Gather InformationGather Information •Be the Expert •Prepare a solid CMA •Establish objective logical criteria
- 12. Prior to Writing OfferPrior to Writing Offer • Prewritten Q’s- You always ask! •Don’t make assumptions
- 13. Writing the OfferWriting the Offer •Determine a strategy •Use a logical approach •Write Yes-able agreements
- 14. Writing a Workable DealWriting a Workable Deal •Review points. Discuss context. •Stop writing when you feel an Auto-Reject •Call the agent and get instant feedback
- 15. Building AgreementBuilding Agreement •Watch out for the Auto-Counter • Never Split the Difference Establish a BATNA and a WATNA
- 16. Make it StrongerMake it Stronger •Larger Earnest Money •Faster contingency removal periods •Clean and concise •Attach signed disclosures •Attach supporting documents
- 17. Emotion LocomotionEmotion Locomotion •Personalize the Players •Love Letters • Buyer/Seller • Video
- 18. Multiple OffersMultiple Offers • Talk Escalation Clauses Early • Back up Offers – Always go into Back Up • Removing Contingencies • Waiving Inspections • Non Refundable EM
- 19. Negotiation – The Fun BeginNegotiation – The Fun Begin •Take Sting Out •Keep it light and positive. •Roll out objective criteria •Anchor Your Starting Point
- 20. NegotiatingNegotiating • Anchor Their Emotions • Encourage a New Number • Establish a Range Based on Comps
- 21. Calibrated QuestionsCalibrated Questions • What & How (Rarely Why)
- 22. Losing FaceLosing Face •Don’t take a position •Don’t allow argument •Don’t question reasoning
- 23. Secret WeaponsSecret Weapons •Silent Treatment •The Deadline •The Competition •Labeling
- 24. You can’t control your own buyers! Actually they were yours until this morning! The house is an overpriced dog! It probably just seems that way, its been so long since you sold anything. My dog could write a better offer! Really – it might take a dog to live in this listing…
- 25. ++ ThoughtThought You can’t control your own buyers! What can we do to resolve this? The house is an overpriced dog! Are you’re buyers considering an offer? My dog could write a better offer! What would you like to see change?
- 26. Close but not quite there…Close but not quite there… •Revisit alternatives •Reduce to ridiculous •The buy back.. •If you had to give…
- 27. The Deal is Done – You ThinkThe Deal is Done – You Think •Reconfirm •Resell •Reassure
- 28. How to Handle a CrisisHow to Handle a Crisis •Don’t Panic •Don’t fuzz the truth •Go to the Balcony
- 29. Digging For DetailsDigging For Details Encourage – “Please tell me more…” Clarify “When did that happen…” Normalizing “I’ve had other clients...” Empathizing “I can appreciate that…” Soliciting “I would like your ideas on that…” Validating “I appreciate your willingness…”
- 30. 5 Steps to Creating Resolution5 Steps to Creating Resolution 1. Accept you have a crisis 2. Define and clarify the crisis 3. Unemotionally discuss the issues 4. Develop solutions 5. Take action
- 31. Follow UpFollow Up •Planned Follow Up •Offer high touch services •Be the Concierge
Notes de l'éditeur
- My Introduction / Funny Story / e-bay or Auction Tap Audience – Yrs, Prod, Married, Divorced, Kids.. Best Way – Listen, Participate Take Notes, Review, Take Action The only thing you can be sure of Birth and Death – Everything in between is a negotiation! (The Power of Negotiation)
- Professional Negotiators - Top 10% doing 90% of the business Conflict is a growth industry. Will Carlton “To appreciate heaven… Amaze agents complain …our desk is a crisis management center, were problem solvers it means we have escrows! Fear is OK, but as Kennedy said….(box) If you’re a poor negotiator don’t you have to work twice as hard? Audience...(Inefficient) Why? Just to survive to eat.. What if 5% better?
- Were not trying to paint a negative picture - lets look at the strengths and weaknesses of each natural tendency. I’ll give you an example of two top producers who each personify these styles… both are effective: Susan / Pete What are the potential problems with each style? (Aud) What relationships might be at risk? (Audience) Now again a tough question if you had to choose which one you personify more, which would you choose? How we negotiate is as important or more important than what we negotiate…Now there is a third alternative which neither soft nor hard…(click)
- The third alternative …Harvard Negotiation Project.. Called (click) Principled Negotiation - William Ury – “Getting to Yes” There are four points of a principled negotiation: People- Big shock but people are emotional during a negotiation. An effective neg. disentangles the people from the problem. Interests- Arguing over positions is ineffective. Extreme positions Instead define the interests that formed those positions. Motive Options- Success under pressure is difficult. Setting aside time to be creative can inspire unique solutions -negotiating hero! (Hero-Builder….) Negotiation is #1 reason we get hired.. Criteria- Stubborn person…tries to impose a contest of will. Vinegar. Use objective criteria to measure agreement…. Intelligence without discipline is worthless…(R & D) (Preparing to Negotiate)
- When does negotiation start? First meeting.. Have you ever wished ..discussed.. Possibility inspections, or compliance work, or fees. Look beyond the initial close, to the eventual closing.. Building Rapport and Trust – Secret shortcut…humor… best kind is self deprecating…Young Couple Story...Resonance… Brutal Honesty- Natural to fake nice…”We can go two ways here….Are you sure??? Train their thinking – Everybody’s an expert train the client about the market, updates (good news, and bad news) . Key # - Average DOM, List to Sales Price, Avg S. Price… Their attitude will often reflect your attitude- Booming For consistent results, you must adopt consistent systems. Yes this applies to Negotiation – Masterpiece analogy (To negotiate effectively we need to Understand Y Clients)
- To negotiate on behalf of your client requires that they first trust you…trust is built through understanding. People want to accepted and to feel safe and secure. The fastest way is to ask open ended questions – emotionally driven Here are my six favorites: Tell me about your biggest reasons for wanting to make a move? What’s your housing situation now? Tell me about your current house – why did you choose to live there? When you purchased your last house did you have any challenges? Tell me a little bit about how you live in your home – do you guys hang out in the kitchen, do formal dinners, do spend a lot of time in garage… What are you looking forward to the most in a new house? Tactical Empathy – I understand, I get it, that makes sense Hear what is behind those feelings, words, tone, body language Second set of ears in a high level negotiation can be valuable You seems a little nervous, are you scared, does this feel good
- Never Split the Difference – Chris Voss tell us that there are Three Black Swans in Every Negotiation and it’s our job to find them – we not only expect surprises it’s our job to find them.. Google Your Clients, Social Media, Research Where the Live Now….where they work… Barbara Walters – goal “Know more about them than they know about themselves.” While active listening – thinking of question that relates to the conversation consider mirroring. Repeat last 3 words of what someone has said, use your late night DJ Voice, and use silence… Examples: Client says “I want a good deal!” Response “A good deal?” Client says “I need to be moved in three weeks…” Response “I’m sorry three weeks?” Client says “I can’t buy a house unless the seller pays closing costs.” Response “Closing costs? Three voices when negotiation Late Night DJ Voice – Inflect downward into a question, calms and slow. Create trust with engaging defensiveness Positive and Playful – Most of the time – easy going & good natured. Relaxed and smiling. Direct and Assertive – Used rarely when you need to get attention and reset the conversation
- Establish creditability and expertise…go hyperlocal Remember were an instant gratification society, if it takes longer than 3 seconds to load a web page we’ve already moved on. Give them selected bite size pieces of information. Reports. Flow charts…Lists of things to do, timelines Explain the process – This also helps to build up your value…. Most important give them something to do: With buyers and sellers one thing to do is to familiarize them with the documents. (Examples) Really what you want them to do is (Click)
- Many agents negotiate while their thinking about something. All the ways they can fail. Failure Anticipation can be viral, pass this virus on to your own clients, You can become the deal killer carrier. Established the relationship - Begin immediately moving towards the end result. Focus on the reality that this is going to happen: Seller – Begin looking at replacement housing. Seller – Start packing/doing inspections/Relocation-Kits Buyers – Early Pre-Approval, order credit report, saving down payment, (Linda Martin Form) avoiding large purchases, deep cleaning apartment, packing… Gift letters, seasoning funds, picking a closing date. Establish strong lines of communication – Survey – How often, email, phone, mail – days of the week, times of the day. Best ways. Buyers- Blocks of pagers, Cell Phones… Move it away from a dream toward a reality.
- Most valuable asset will be knowledge more powerful you become. Whether you’re the listing or selling agent your goal be an expert on the home itself. - Expert System Before you write any offer or list a home, do a solid CMA. Establish objective logical criteria. Two ways to use this: Sellers Agents – Give to buyers agents with seller permission, shows your seller has priced the home to market. “One question I often get is how the price was arrived at” Buyers Agents- Provide a clear, logic based offer. “ Based on these what are your thoughts” Live, field CMA- with mobile tech(Pics) Prior to writing an offer (next slide)
- All of us could probably think of at least a dozen questions we should ask the other side before offer. For instance: Do you have another offers at the moment? Why is the seller selling? What improvements have been done to the home? How did the seller price the property? What is the sellers timeline? How long has the seller lived in the home? We have a fiduciary duty to ask the other side questions. Now of course the other side may choose not to answer: Fair enough… Prewritten series – Mia – Santa Cruz – “Listen, I showed your home, and I loved it but my people are on the fence with this one and a couple others…I need your help to try to sell it.. What can you tell me…?” Am I paying enough attention to the people problem? Don’t make assumptions based on previous experience. (Unveiling the other side)
- Before you say “How much are you going to offer”…. Give logical basis - “Before we talk about offer I have a list of all of the properties that sold, and some stats on the neighborhood….Now based on what we know about the seller and this info…what are your thoughts.” Encourage a No response “Do you want to push the seller on timing?” Do you want to ask for the dog? Low ball Buyers – Force them to use logic - Using other side thinking… “Listen, I can appreciate you want to get the best deal possible, two thoughts I have here... First I’ve shown you the stat’s….. if you were them based on the numbers how would you feel about this offer?” “Second I want you to ask yourself are you willing to walk away from this home, because let me tell you what happened to one of my clients....” “Here’s what I would suggest – Let’s write an offer that I can sell to the other side. Base it on repair cost, market value something seller can buy. Attempt to write a yes able agreement –Could seller logistically accept your offer, if not speak up. They don’t have like it, but could they accept ? Because we should (click next slide)
- Don’t bring the offer out – Yellow Legal Pad, Pencil. Now it’s time to earn your fee. Review back each point you have discussed and put them into context. The big picture. If / then If while writing the offer they pop up with some crazy statement they want added, put your pen down and look them square in the eye. “ Let’s talk about that for a minute.” To test your theory and save time, when your not in a multiple offer situation try calling the other agent and bouncing the idea off of them – With buyer permission.. (Making it stronger)
- Always be looking for mutual objectives. What do you agree on? What in your offer is going to take them closer to their goals? Can you provide a benefit list. Owner Carry – Interest over time…timeframe… Watch out for auto-counter points. For instance… No timelines of contingencies, no dollar limits on repairs…. When one point gets countered is it more like or less likely ? Question: Is it worth a counter offer? Is it worth the risk? Never Split the Difference – One Black Shoe/One Brown BATNA and WATNA – Old people story, Neal Moffitt Story
- Loss Aversion (Fear of Loss) – Make your offer the safe choice You ever write a ……Pre-write contengcies. Broker approved. Government Time? Fast 5-7 days, prelim approved, inspections One statement I use. “ Purchaser must have full loan approval without conditions, excluding appraisal within 14 days of acceptance, and remove financing contingency, excluding home appraisal and home qualification.” Clean & concise. Could someone not in RE understand? Attach signed disclosure with the offer. Why? Stronger Offer Disclosure statement aren’t weasel clauses. You give the rabbit a hole don’t be surprised if he jumps down it. Attach supporting documents. Like what? Credit reports, financials, job transfer letters, inspections already done…
- Have you ever been at a presentation and had a seller ask you a question about the other party that wasn’t deal related but emotion related? Why do they do that? Emotional Decisions Some use the love letter approach with both the buyer/seller side . Seller side – A personal handwritten letter in the home book that explains the reasons the seller purchased the home. Buyer Side – Buyer Personal Letter/ Buyer Profile Take a step further move up to digital photos/Video The goal should be to personalize the players. Talk about them by first name, talk about the whole family – with permission…
- Discuss Pace of the Market: Competition
- Take the Sting Out – Layout the negative first – Listen I am sure the seller is hoping for a higher number but let me explain… Anchor your starting point – “The buyer looked hard at the sale across the street which sold for X dollars…” avoid aggressive & defensive Does either serve the client? Keep it light and positive. Build trust and rapport with agent. “I want to get your feedback on this offer?” Tell your clients story – Use BATNA. Ask for their BATNA, ask why and why not questions. Tell the truth respectfully – “Here’s how the buyer arrived at this offer”… show them objective criteria…and ask for critique. CMA’s are for agents only -“I’ve provided <> with a copy of the market information the buyer used….
- Anchor Emotions – Acquisition audit to prepare for a loss.. Encourage a new price – let them negotiate against themselves… Establish a range based on comps – “The buyer is basing his thoughts on the two closets comps…”
- A calibrated question can often come after a price conversation or demand… For instance the seller agent says – The seller is firm at $890,000… Calibrated question: I understand can I ask how they arrived at that number? What do you think the house will appraise for based on the comps? How do I sell that number to my buyers? Example of blue champagne conversation..
- Many agents can’t quite grasp the concept of loosing face… If you take an attitude about an offer – The seller may feel obligated to side with you – Even if they may have accepted the offer. Don’t take a position! Don’t allow people to argue in front of you. Excuse yourself from the situation… Example offer $1000 a way acceptance. Listen don’t make a quick decision that you might regret later, why don’t you sleep on this tonight and give me a call in the morning.. But let me give you a thought… Don’t question the agent or sellers reasoning – Present your own client reasoning and ask for their comments.. I understand… here’s what my clients thoughts are (Reaction/Stimulus)
- The Silent Treatment. Silence makes most people uncomfortable. After you've made an important point, look directly at the other party, smile, and wait. 2. The Deadline. Deadlines keep situations under control and get results. Begin a meeting by saying you must leave in an hour. 3. The Competition. Keep the other side from feeling too secure. 4. Labeling – It seems like, it sounds like, it looks like…pause let the label sink in then separate people from problem.. Ego-ectomy, get every one on the same side of the table, looking for a solution. Put them in the same room – Story of Dan Ask for alternative solutions - Ask Why and Why not questions. Look for creative ideas, ask others in your office...(Example) …
- (Run into the crowd and jump in front of someone? You are ….) Stimulus/Reaction – Unconscious reaction to sudden action. Can destroy the fragile alliance in a negotiation. Emotional negotiators are immature negotiators. Think of attorney. Control your emotions – Don’t allow yourself to be triggered. Good negotiators can also push your buttons. Just like your kids. Examples… (Click) You must do something before you can become an effective negotiator you must add the missing element to this model. (click)
- Add thought. Think about how you will respond, and how the response will impact the negotiation. Notice these new responses: All of them are questions. A questions can allow the other side to vent, by allowing them to talk, and blow off steam. It also will show your interest.
- Have you ever missed this shot… When you hit the wall… of negotiations, and we all have. Where you’ve taken it as far - reflect back…Revisit alternatives -“Let’s go back and look at your second choice again..” The good news: Most concessions are made at the end of a negotiation! BATNA/WATNA – “ How will you feel tomorrow if you loose this house?” “Will you be OK with starting to look at homes all again?” Reduce to the Ridiculous – “ I’m going to use old fashioned technique – I want you to look at house as being one late’ a day from being yours.” You every had a seller within a $2-3k (Buy Back) I know you don’t want to give but if you had to stretch on what item what would it be….you want to give it a try. (The Deal is Done)
- The larger the purchase the larger the (audience) (meyers Deal) Remorse causes…doubt, doubt causes fear, fear causes failure.. Bottom line people look for a way out, you may think it was… but in reality it was remorse…There was a reason (click) I didn’t use the three R’s – Resell, Reconfirm, and Reassure… After writing an offer Talk about remorse (M&M Pill bottle) .. Reconfirm – Touch back on original reason for selling/buying Resell – Tell them why they made the right decision. Reassure – Tell them everything will be Ok Keep them focused on the end result, satisfaction of their goals, give them things to do… Packing, Financing, Yard Work… Establish your Communication Platform Communication is the key to any successful relationship.
- Don’t panic… 90% of what you worry about never happens. The urgency addiction – solving crisis that you create Don’t fuzz the truth we tend to internalize the problem and take ownership…stess..ulcers…you know my first wife……let your client know about everything and you will build more value. Remain calm and unemotional – Doctor example…. You’re the island in the storm…. To do that you have to remember the golden rule… The hardest escrow to close is the only one you got! (Creating Resolution)
- Here’s some ways to diffuse bombs before they blow up. Half the battle with a crisis is to keep the party talking.... Funny Stories: Newspaper Problem: “Is there anything else” Story of Bob the builder: “ I hear you baby, I hear you….” Soften the blow by expressing empathy. Try saying: (Read) Here are a couple more … I understand, I know what you mean, I've been there Now to get past the crisis 5-Steps (next slide)
- Recognize and accept your have a crisis and choose to solve it now! Time compounds almost all problems, they fester and become far worse. – Example? Justice Deferred, is Justice Denied. Define and Clarify: Sometime issues get all jumbled up, find out exactly what the issues are.. Script: How would you you like to see this resolved – If that’s not possible is there anything else that would make you feel better? Unemotionally discuss the issues –Set the tone… “Listen <>, it sound like your upset, are you upset at me or the situation? Develop Solutions: Try to meet some of the needs of all the parties involved, talk in terms of what each party will gain and what each party will loose. Take action - Show your willing to attempt to move the process forward, but don’t ever take ownership. (Closing the Deal)
- First Impression get’s you in the front door, last impressions are how and if you will be remembered. 28% of satisfied clients can’t remember their agents name 6 months later. The importance of client surveys. Find out what you did right and wrong. Have someone else do it…Ask for reviews and testimonials – provide samples * Standard Email Visit them in their new home and deliver your house warming gift. Offer high touch services…Postcards of new home…Website of new home… House warming party. Offer a central point of contact for any of their home services needs and remind them of referrals. Home anniversary, CRM