The Top 3 Skills You Need To Win at Real Estate Negotiation
I don’t mean to slander my own environment but most real estate agents wouldn’t know expert negotiating if it walked up and bit them on the nose! Realtors tend to liken themselves to professional negotiators simply because it is technically a part of their job but are they really? I’ve narrowed it down to three key skills for real estate negotiation. For a quick recap, watch the video below.
After more than a decade in the business, I have found that many real estate agents are professional negotiators in the same way that a fat man is suddenly a professional runner — when he is being chased by a bear! The truth is, you cannot become an expert at something without understanding these 3 skills for real estate negotiation.
- Engage in negotiation frequently and consistently
- Habitually analyze your results
- Stay authentic and consistent
It’s all about frequency
You cannot become an expert negotiator without engaging in negotiation frequently and consistently. The reason most Realtors are not expert negotiators is because they don’t negotiate often enough to become good at it. According to NAR (National Association of Realtors) the average Realtor in 2019 only sold 12 homes the entire year (this is only one per month!) What if you only exercised once a month? How fit would you be? In 2020 and 2021, the amount of homes sold has steadily decreased across the country so you have to assume that the national average has decreased across the board as a result.
The national average is probably a lot closer to 6 homes per year at this point, so these novice negotiators are getting even less practice these days. When you don’t negotiate frequently, valuable experience falls through the cracks in between negotiations. The less frequently you are negotiating, the larger those cracks become. If the NAR average holds true to one deal per month, you aren’t looking at a crack between negotiations — you’re looking at a canyon.
Negotiators need to be able to apply what they learn in one negotiation to the next in order to improve technique. If too much time passes between negotiations that experiential data is lost. The negotiator spends the entire next deal simply trying to relearn the practice of negotiating rather than working to refine it. This is the equivalent of trying to teach a child to swim by simply throwing them in the deep end of the pool once a month. You cannot refine your skill set whilst you are flailing about trying not to drown.
Make a habit of analyzing results
If you are one of the rare few who has the ability to meaningfully increase your frequency and consistency at which you negotiate, then you must begin to focus on analyzing your results. This is a huge part in building your skills for real estate negotiation. Many Realtors have successful businesses and close 10 to 20 deals per month. This is an exceptional frequency but they are missing a necessary component when it comes to becoming an expert negotiator — they don’t analyze their results.
It’s important to step back and look at what worked and what didn’t. Frequency alone will not make someone an expert. Like so many things, becoming a true expert lies in the details. What is seemingly inconsequential to the novice is understood by the master to be all that matters! I have brushed my teeth twice a day as I have for 42 years but I doubt that I have improved much in the last 35. The reason is that I am not intentionally analyzing my results.
The act is habitual rather than intentional. The difference between a habit and an intention is passion and intensity. I am not passionate about brushing my teeth — I am very passionate about negotiating!
One must develop a healthy curiosity for anything they wish to master. You must learn to find joy and excitement in the discipline. This of course starts with your mindset about the practice. Without curiosity there is no learning, there is only regurgitation. One cannot simply regurgitate their way to becoming an expert negotiator.
Be authentic and consistent
Authenticity is the secret sauce here! This requires a bit of talent. You need to know your audience and understand how you are received. The right technique deployed at the wrong time or with the wrong tone becomes the wrong technique. Once you have increased your frequency and your analysis has led you down the path of understanding negotiating at a higher level, you must now put your theoretical knowledge into practice.
This requires a great deal of self awareness. You cannot send Bob Ross to a war zone to fire up the troops! He would go on and on about a happy little bomb there and some nice explosions over there. “It’s your little war zone. You can make it whatever you want!”
You need to understand how you are perceived by others and what characters you are capable of playing in a negotiation. If you aren’t capable of being the bully, don’t try. If you aren’t capable of being the lamb, don’t try.
Whatever technique or character you decide to play in the negotiation, it needs to be authentic and consistent. Any breach in authenticity will be perceived as a breech in credibility and one cannot afford this in any negotiation. Negotiations are a battle of wits fought with words. If our words lack credibility, we have already lost the battle.
Become a student of negotiation
An encouraging thought to keep in mind is that if you are thinking about these concepts at all, you are already way ahead of 99% of your competition. Most agents negotiate on train tracks. Meaning, they are very rigid and somewhat mindless when it comes to negotiating. They recognize only the most obvious patterns within a negotiation and they become slaves to it.
Most agents negotiate like civil war soldiers fought. Imagine two armies arriving on the battlefield, standing in straight lines directly in front of one another and exchanging fire. We all know the history and that is how it was done.
We have all thought to ourselves, why in the world wouldn’t they just seek some cover or get out of the way. Well, the answer is that just isn’t how they were trained to do it. What I am advocating for is that you become Gorilla soldiers where negotiation is concerned. Don’t just stand in front of the enemy and mindlessly trade shots. Negotiate from cover. Ambush the opposition. Flank their position. Attack at night. Overwhelm the enemy no matter with superior tactics no matter the odds.
You must become a student of negotiation. The best students become the most formidable experts and teachers! Most agents will never cross the threshold and become willing students let alone experts, so get curious and dive in. It is a vast ocean and you aren’t likely to see anyone else swimming near you.
Interested in learning more skills for real estate negotiation? Schedule a free consultation with us here.