The real estate industry presents many situations for negotiations—and not only on behalf of your clients. You might negotiate a new commission split with your broker (or agents), the terms of a listing agreement with a seller, and the prices of new products and services. Here are tips to get the best results.
Throw an Anchor
The first offer in a negotiation will likely sway the discussion in that direction, according to the Harvard Law School Program on Negotiation. That offer serves as an anchor, pulling subsequent negotiations toward it. For example, a $25,000 offer to purchase a $30,000 car may not get accepted, but it pulls the asking price down, sometimes resulting in a “split the difference” resolution.
Talk Less, Listen More
You’re focused on your side of the negotiation—points you want to make and how you want to make them. It’s easy to overwhelm the discussion and never understand what’s important to the other party. To find opportunities for common ground, you need to listen.
People find silence uncomfortable and will often fill it with justifications for their position or other attempts at persuasion. Taking time to digest what the other party said allows you to understand it and come up with effective counterpoints. In some cases, silence can act as its own counterpoint. For example, if a technology consultant presents an $8,000 starting point for work you were hoping to pay $5,000 for, five seconds of silence from you can speak volumes.
Turn the Tables
People are flattered when they’re asked for advice, and that doesn’t change in negotiations. If you find yourself at a sticking point with the other parties, ask what they would do to move forward. Not only does it stroke their egos, but it might reveal areas in which they’re flexible on terms or conditions.
Give and Take
Agreeing to a request without asking for something in return may be a missed opportunity. For example, if a potential retail tenant asks for a reduction in the monthly rent, you might ask for a longer lease. Otherwise, you send a message that the listed rent is too high. Likewise, when you ask for a change in your favor, include what you’re willing to give, even if it’s small.