Today I am going to share with you 10 powerful real estate negotiation tactics that will help you with negotiating. I will share 4 tactics, and then 6 additional tactics that are part of the Prospect Theory strategy.
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Don’t run away from ”no”. People are so averse to being told ”no”. Real estate professionals are always trying to get “yes” answers because Realtors are people-pleasers by nature. You naturally run away from any situation where you may be told “no” because it is seen as a negative word, and this is the natural response.
However, in sales and negotiations, “no” isn’t the same – it isn’t necessarily negative. Using the word “no” in sales and negotiations is a powerful thing to do.
Saying “no” shows that you are doing your due diligence in the negotiation. It shows that you are strong, that you know your value, and that you understand what is at stake. If you tell someone “no” enough times, it gives you the okay to say “yes“. You have demonstrated your prowess and power, so that when you do say “yes,” it carries more weight.
If you push too hard to get a “yes” you will end the deal. That’s what gets people to hang up on you or to stop the negotiation. Be okay with getting a “no” from the other side. It starts the negotiation. It should not end it.
When you get a “no,” you are given time. You have more time to ask questions. More time to go deep, and to develop a better understanding and a better relationship.
Be patient. Be willing to get into long conversations. You must be comfortable with “no”.
Create an interruption in conversation. Of the 10 real estate negotiation tactics in this blog, this is the tactic to help you get back on track. If the conversation is spiraling out of control, you can use one of the following types of interruptions to help reset the conversation – as well as to create a temporary pause where you can attempt to get the conversation back on track.
Put gaps in between your sentences. Silence is extremely powerful and it can do a lot of the heavy lifting for you. It slows people down and calms them down before you change direction. Your cadence starts to break. It gets the other person to pay more attention. You can get people to re-engage with you.
Start being very positive with the other person. Nod a lot – “Yes, okay, I see!” You can get them to change direction and calm down if they feel that you are on the same team.
In this same category, we can include these similar tactics:
The final 6 tactics I’ll share with you today are part of a strategy called “Prospect Theory.”
The Prospect Theory is based on the idea that people would rather choose a path that provides certainty than one that does not provide certainty. In general, people won’t choose a path with the possibility of more prosperous results if it could cause them to lose something. This is why most people would rather choose a job with a salary than a commission job.
In our list of real estate negotiation tactics, this one is a game changer. Similar to labeling, start with an accusation that acknowledges their fears. This causes them to jump to an opportunity to avoid loss.
Example: Conversation with home seller. “I have bad news for you. It will frustrate you a little bit. And, it frustrates me. It may even frustrate you with this process and our entire industry. It bothers me and it makes me angry. Your house didn’t appraise for value. And I’m sorry about that. What I want to do about it is try to counter the buyer’s offer, because they now want a price reduction on your home because the home didn’t appraise. So I want to counter that back and ask them to at least meet us halfway or pay the difference.”
Start with an accusation – “You’re going to be frustrated.” This is a preemptive strike. You anchor their emotions and then tell them the bad news and plans to overcome it. You anchored their emotions and pointed their feelings toward entities other than yourself – in this case, the process, the industry, and the appraiser.
Never anchor the emotions on yourself or on the other agent. Don’t get the seller mad at the other party. This will come back to bite you.
Let the other party go first… most of the time.
This is hard for people. Try to get them to start the negotiation. This is strategic. It will set the tone when you can see where they want to start.
If they won’t go first, give a range. If the person you are working with is a skilled negotiator, they will put the ball back in your court. They will say, “No, you tell me what you want.”
Now, instead of giving your number, give them a range. Then, you give them your range, and say, “What do you think about that?” You hit the ball back to them. You aren’t truly going first, but you are giving them a little bit of information and pushing them to go first again.
In our case, in terms of real estate negotiation tactics, this is likely the price or interest rate. Change the focus to a non-monetary item. Start negotiating on that.
Consider what you can give up. Maybe it’s the barbeque in the backyard. “Did you want that barbeque in the backyard?”
These items may not have value to you or your client, but if you make them seem like valuable pieces to negotiate over, you can use them to pivot from the core term. Once they get a win like this, you will be able to ask for more where it counts.
When you talk numbers and make your counter-offers, use odd numbers – not even numbers. This is important when it comes to real estate negotiation tactics. For example, don’t use $580,000, use $579,000. In a negotiation, when you use an even number like $580k, it feels like you can be talked down. It doesn’t feel like a hard offer.
When you use an odd number like $579k, it feels like you have calculated and taken your time to figure out precisely how far you can go. It feels like you’ve given every inch that you can.
Surprise someone in the middle of a negotiation with a gift. When it comes to real estate negotiation tactics, this one is highly effective.
As you go back and forth with the other party, time is passing, and you are learning more about the person. Give them a “thank you” note and a gift card in the middle of your negotiations, or even make a public Facebook post to thank them for going under contract.
Always look for ways to get on their good side. It builds rapport. It will make them feel obligated to reciprocate. If you just gave them a 5-star Google Review, they won’t be likely to shut you down. They’ll be more likely to accept your offer.
Save this list and print it out — and practice, practice, practice. Some of these tactics will come more naturally than others, but the key to more successful real estate negotiations is to be strategic. Subscribe to our newsletter and get access to this free download.