Negotiating skills are an essential part of your toolkit in real estate. As a skilled professional, you work hard to satisfy your clients and close the deal successfully. Discover how three Ontario REALTORS® approach negotiations with the will to succeed.
Say the word “chickens”, and Einas Makki is likely to laugh, because these barnyard fowl figured prominently in the most unusual negotiation of her real estate career.
“I sold a country property a while back,” says Makki, a REALTOR® in New Liskeard, Ont. “It was a beautiful log cabin and the owner was into organic and local food. He had 40 free-range chickens and he refused to corral and move them because the property was their home. One of the buyer’s requirements was that there be no livestock on the property. Ultimately, the buyer and seller agreed to split them, with each party taking 20 chickens.”
The chicken deal exemplifies Makki’s approach to successful real estate negotiations: “In one word, you must be adaptable. That’s the key.”
The toughest negotiations are those where “either the buyer or seller – or both – have a particular result in mind and they’re too stubborn to let go,” says Makki. “They cut off their nose to spite their face. For the most part, if you’re open with people and keep them in the loop, they are happy to find common ground in negotiations.”
She sometimes comes across a person who wants to hold on to his or her last $500 and refuses to budge. “In those cases, there’s often an emotional issue involved,” she adds. “For instance, they may have built the home themselves and find it hard to leave, or they’re trying to save face because they’ve lost their job and can’t afford the house anymore. The value goes beyond dollars and cents for them.”
Unrealistic expectations or a lack of motivation among the clients are often the biggest roadblocks in a failed negotiation, says Ken Dekker, an Ottawa REALTOR® with 21 years of experience. “Recently I had a negotiation where the buyer and the seller were $10,000 apart and we couldn’t put the deal together,” says Dekker. “The buyer assumed he could find another property he liked at a better price and the seller decided that he might rent out his property instead.”
“In some cases, buyers have to lose out on a house or two before they get their expectations in line.”
Timing can be an issue in a stalled negotiation, says Dekker. “Sometimes people just aren’t ready. In some cases, buyers have to lose out on a house or two before they get their expectations in line.”
Aggressive behavior by a REALTOR® can backfire and should be resisted, says Dekker. “You can’t force clients. You can counsel them, but if you push them too hard, you may lose a client for life or even make an enemy of them. Instead, you want them to know that you have their best interests at heart; no-one likes to feel that they paid more than they should have or received less than they could have.”
The client’s level of motivation is often the deciding factor in a successful negotiation, he says. One of the scenarios that Dekker has seen play out time and time again is a situation when a seller is unwilling to budge on price.
“I explain to the seller that the house is up for auction to two bidders: the buyer and them. If they counter the buyer’s offer, it means they will buy back the house at that price. Depending on their motivation for selling, it may not be wise to outbid the buyer.”
Dekker has seen negotiations go back and forth up to eight times. “I position my clients to understand that typically, there are three counters each way before people tend to reach their bottom line or their breaking point,” he says.
Treating all parties with respect, communicating well and doing the necessary homework about comparable properties are key to good negotiation, says Teresa Vu, a Toronto REALTOR® with 13 years of experience. “You want to get a happy price for everyone involved,” Vu said.
“To do this job well, you need a lively spirit,” says Vu. “Luckily, I’m a fighter.” If clients are digging in their heels and refuse to budge on price, Vu often advises the parties to take a few days to think things over. If they are still apart on price and that is main reason the deal is stalled, she suggests that all four parties involved – both REALTORS®, the buyer and the seller — split the difference so the negotiations can conclude positively for everyone.
“REALTORS® are there to bring people together, she says. “Our role is to come up with solutions that solve problems, and that involves negotiating.”
When the going gets tough, the role of the REALTOR® can sometimes be to serve as a sounding board for frustrated clients who just need to vent their steam, says Vu. “Listening and being there for our clients is part of the job. My buyers can say a million things to me that I will never relay to the seller.”
Tips for better real estate negotiations:
- Focus on getting the job done, not on winning; negotiations are not a race.
- Put aside your personal issues; project a calm, competent manner to clients.
- Treat the other parties involved with respect and they’ll return the favour.
- Coach your client in advance so they aren’t surprised when certain scenarios unfold.
- Be friendly with the “opposing” agent; an adversarial relationship won’t help get the deal done.
Story by Elaine Smith. Sources: Ken Dekker, Einas Makki, Teresa Vu