Negotiation experts believe trust is an important element in the negotiation process. But real trust is built over time. And in the context of real estate transactions, you don't always have a lot of time. That is, "time is of the essence." Nevertheless, you still can build a certain level of trust by approaching negotiations with a positive attitude, in a cooperative manner, and in terms of "we" instead of "I", which will demonstrate that both sides are working together toward a common goal. Effective negotiating skills include:
1. Seek a Win-Win Negotiation Situation
The best deals occur when everyone believes they have been treated fairly. Generally, sellers want the highest possible return on their investment and buyers want a fair price. Although each side will want exactly what they are asking for, compromise is usually involved. Therefore, be willing to compromise so each side can walk away and feel as if they've achieved a win.
2. Realize Negotiating is Just Business
Keep emotions in check. Listen. Consider the other side's position. Ask questions. Educate. Be willing to compromise. Be respectful. Refrain from arguing. Work together. Focus on the goal: reaching a satisfactory agreement.
3. Know What You Want
Be clear about what you want. Distinguish between "must-haves" and "preferences." For example, if the seller wants to net a certain amount on the sale, then he should negotiate with that in mind. Additionally, know what issues are on the table. Is it price? Repairs? Settlement date?
4. Research
Educate yourself about the transaction, in advance, to ensure negotiations are effective and efficient. Do a comparative market analysis. Use that information to guide discussions.
5. Leverage
Know how much leverage you have. This will set the tone for negotiations. What are the market conditions? Are there comparables selling for less? Is the seller going through a divorce? Relocating? How long has the property been on the market? Are there multiple offers? For example, if the buyer knows the seller needs to move in a hurry, this will give the buyer leverage and he may be able to negotiate a lower price. Vice versa, if the seller knows the buyer needs to relocate and has been looking for several months, the seller may be able to negotiate a higher price. The amount of leverage will determine the amount of compromise each side is willing to make.
6. Know When to Say No
Know your threshold. Determine what you are willing to give up to get what you want. If negotiations deteriorate to an unacceptable level, then be willing to say "no" and walk away.
7. Put it in Writing
Whatever has been agreed to during negotiations should be put in writing. Oral agreements will not suffice.