Where Most Real Estate Agents Fail
Can you imagine going to court and volunteering to pay the opposition’s legal fees? Of course not! That would be crazy, right? Well, not so fast! Many people in the real estate industry are essentially doing the same thing in their real estate transactions without even realizing it. As a result, we sometimes end up negotiating against ourselves.
If you have watched my videos or read any of my previous blog posts, you likely already know that the average realtor doesn’t sell very many houses. You also likely know then that they are NOT expert negotiators and probably aren’t generating leads very often.
So how does this show up most commonly in a real estate transaction? The same way it would show up in a street fight. If you’re not a good fighter, you are going to look to square off with the weakest guy in the group. You would look for the path of least resistance.
So who might be the path of least resistance within a real estate transaction? Well, let’s look at the players. You have the opposing agent, you have that agent’s clients who are either the opposing buyers or sellers and you have your own clients. Let’s analyze each of these potential targets.
- Learn the signs of a weak agent in action.
- Research the opposing agent.
- Research the opposing buyers and sellers.
Analyze all parties in the negotiation.
The first thing I do, in every negotiation, is find out everything I can about all parties involved. That means first researching the opposing agent and their production. Then, I research their clients to see if there’s anything I can use.
When I analyze the agent, I don’t just look at their real estate experience. I also look into any prior business experience that they may have brought with them into real estate business that may make them more formidable negotiators.
I also take time to look at their clients’ occupations and apply what I know about personality profiles in order to get an understanding of the psyche of the people I am negotiating against.
For instance, if the opposing buyer or seller is an accountant? We can likely infer the following about them:
- Fairly measured and conservative
- Detail oriented
- Likely to be risk avert
- They’ll move through the negotiation slowly and methodically if allowed.
How can I use that to my advantage? Perhaps I need to issue more aggressive deadlines than I normally would in order to push the opposition to make decisions faster than they may be comfortable. Therefore, forcing mistakes made through unwelcomed haste.
In another scenario, perhaps the buyer is a social worker and therefore likely driven by feelings more so than money. If kindness is their currency, a super courteous email sign off and small inconsequential gestures of kindness will allow us to build some credit and goodwill that can be cashed in later during the inspection negotiation. They may at that point be so invested in keeping everything smooth and happy that they’ll put up less of a quarrel to avoid expenses.
Once I have analyzed both the opposing agent and their clients its time to put the pieces together and try to understand where they will take the negotiation. Most battles are won strategically before the first shot is fired. It’s important that you have a plan going in rather than trying to develop one on the fly.
At this point, the professional negotiator will take what he knows of all opposing parties and create an environment where the opposing agent recognizes that he or she is outmatched. This can take on many forms but the important thing is that the opposition understands they aren’t going to get the deal closed by going through the professional negotiator.
This realization leaves them with only one viable alternative to get what they want. They have to turn around and go to work on their own clients. Remember, a weak agent has the strongest relationship and highest understanding of their own clients’ motivations. They know just what to say to get their clients to do what they need them to do.
Are you negotiating with yourself? Learn the signs of a weak agent.
Now that we have analyzed all the parties in the negotiation, it is easy to see which of the parties a weak agent would most likely prey upon. They certainly wouldn’t choose to do battle with the opposing real estate agent whose experience and expert negotiation tactics most likely exceeds their own.
They really shouldn’t even have an opportunity to speak directly to the opposition as all that communication would flow through their agent whom we have already established will likely be avoided. As a result, that leaves just one party to work on, their own clients.
So, how do you spot an agent that has failed you and is now working for the opposition? It can show up in many forms. It could be the hand on your shoulder saying, “I’m really sorry, this is the best we can do.” The translation for this is “I’m really sorry, this is the best I can do without making myself uncomfortable and let’s face it, I am not willing to make myself uncomfortable in order to make you more comfortable. So please accept this offer which is lower than what you deserve”.
Or how about the ever popular, “Lets just split it with them. That’s reasonable.” I see this most often when the ask was completely unreasonable to begin with. This is a sign of an agent that has given up. Splitting a concession down the middle is not negotiating! It is lazy and weak.
How certain can you be that your agent is not allowing their own financial pressures to impact the advice they give you in the negotiation? Perhaps they are playing scared because they cannot afford for the deal to blow up because they desperately need the commission. This is a huge reason why most real estate agents fail in negotiations.
You cannot afford to hire an agent that is hobbled by inexperience, lacks courage, or one whose fiduciary capability is otherwise compromised by their own financial insolvency. The simple fact is that their weakness becomes your weaknesses in a negotiation. They may not be strong enough to effectively stand between you and the opposition but they can be the straw that breaks your back if they are turned to work against you by any of these factors.
The next time you are involved in a real estate negotiation, pay close attention and ask yourself, is my agent working with me or against me? If I am the opposing agent you probably already know the answer. If you’re still not sure – schedule a free consultation with me here.
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