Do your homework? Preparation for the negotiation process

Put together a gameplan

1. Research the property and know the property history
2. Research your opponent
   1. Check how long they have been practicing
   2. Research agency
   3. Probe for insight
3. Identify Goal
   1. Sale
   2. Time (length of contract)

 Negotiating Tactics:

1. Pre-Conditioning

 Established when the other party makes a comment prior to negotiations either to establish a bench mark or set a standard. This can be subtle or obvious.

1. Try not to make the first offer

 Let the other party make the first move, this will allow you to determine the strengths and weaknesses of the other party. It will also allow you to gauge the other parties necessity and willingness to agree to terms.

1. Create leverage

 Probably the hardest thing to do when dealing at arms length in front of a client is to create leverage. However, you will not be able to turn the corner and get an advantage without some form of leverage. Include a third party or another buyer to create this advantage.

1. Avoiding talking too much: Shut your mouth

 One of the biggest mistakes any negotiator makes while working on a transaction is when the person talks too much. Learn to gain insight by listening. Listening can often result in a clearer understanding of the other party’s concerns.

1. Probe for insight, then shut up

 Never be afraid of waiting in silence, if you are uncomfortable with the silence. Generally, the one who speaks first is the one who gives more in a transaction. Here, I would always ask questions for information but be willing to stop talking and listen to what the other party is saying.

1. Nibbling

 This is a tactic where one party throws out numbers or terms to get a reaction from the other party. Generally, a short cut to get to resolution. This tactic is used a great deal in Real Estate.

1. Be realistic but always overshoot a bit

 Used in real estate for low balling, a client will purposely want to write an offer that is below list. This is an effort to gain footing in negotiations and hopefully get a good discount on the price. Can be seen an insult. Must be very careful on how this is applied. If the offer is too low, you run the risk of not be countered. You want to offer just enough to be invited to the negotiations. Also, overshooting price can help you set some parameters on what terms they would be willing to accept and at what level.

1. The power of legitimacy

 If you can produce a current list of sales or statistics about your market use these items to prove your point.  By bringing this evidence to substantiate your offer your opponent will have to consider these facts in making their decision. This will provide legitimacy and credibility to your offer.

1. Never look impressed or eager – the low key approach

 Whether the negotiations are going well or not you must keep in mind that you must not show any emotion. Any inference as to what you are thinking will give your opponent an unnecessary advantage.

1. Always be willing to walk away from the deal

 When you are dealing with an unreasonable opponent and they are unwilling to make any type of concession, test the waters and walk away from the deal. Use this act sparingly; your objective here is to get some type of emotional reaction from your opponent. If your opponent gets upset then you have your opponent where you want them.

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