Real Estate Negotiation – 7 Best Strategies

An important part of our job as Realtors is to help our clients negotiate for the best deal on a house. Your confidence and professionalism in this area will make your service memorable to your clients. Here are some strategies to help you guide your clients through the negotiation process.

1. Constantly re-establish trust.

Establishing trust between the parties is the most important strategy in any negotiation. Buyers and sellers know that the other party has interests that are in conflict with theirs. They begin with a certain amount of wariness of each other. It is valuable to establish rapport quickly. Show them that you and your clients will be reasonable to work with. Here are some ways for your clients to establish common ground:

Communicate that they have a common hobby, the same type of job, moved here from the same area, went to the same college, have similar children’s needs, or other relatedness.

Present evidence that your clients are qualified to buy the property.

If your buyer works for a well-known company, this may increase the seller’s trust.

Never delay your counteroffers. Show respect for the seller’s time.

Communicate that the buyer appreciates the home.

Begin the negotiation by establishing rapport. Then continue to reinforce it throughout the closing process. I have noticed that buyers are often reluctant to show that they like the house. They believe that an aura of disinterest will help their negotiation. I recall a transaction in which the buyers met the seller, and expressed how much they liked the house. During the negotiation the seller had multiple offers to choose from. Their offer was selected. The buyers’ encounter with the seller, and openness about how they felt, gave them an edge. Also, they were real people to the seller, while the other offers were just paper. The seller trusted them to close the deal.

2. Don’t get negative feelings involved.

While trust is the single most important factor in a negotiation, ego is the most destructive. Many times I have seen buyers include notes with their offers. They point out faults and deficiencies, and explain why the home is not worth the price. I guarantee that these buyers paid a premium. The point is, never run down the sellers’ home. This will bring their feelings to the table. And negative feelings are an unnecessary hurdle to have to overcome. If you have the opportunity, compliment the sellers’ house, decorating and gardens. Don’t forget that their children are always above average, and their pets are practically human. During the negotiation, anchor your offer price to market data.

3. Play on the Same Team.

It is important that you stay on the same team as your clients. A united front is a strong negotiating position. This may not be the way things really are. The wife may love the house, but the husband wants to negotiate the price. You may not approve of some of the terms of the offer. If you reveal a break in your ranks, the sellers will consider your position weaker.

4. Keep a Grain of Salt.

A healthy skepticism is a good thing in negotiation. Not everything you are told is true. How many times have you heard that the contract has to be in this quarter, or the price is going up? Does the 1% bonus for contract this week mean that you have to rush your offer in? Is the price really firm? Proposals such as these show you what is important to the seller. The seller may want close quickly and for full price, but, on the other hand, the seller may want to close, period. I can think of many times when I thought the buyer’s offer would never work, and yet, they got their terms.

5. Understand Special Needs.

A big part of negotiation is subtle. Little things make a big difference. Sometimes good deals go off track because of a difference in the style or personality of the parties. A misperception of the required tone can lead to a decline in trust. Some examples:

Slower Pace – The sellers were a couple in their 90′s. Since they did not leave the house, the buyers met them several times. The buyers took extra time to sit down and talk, and formed a strong bond.

Holy Ground – The sellers had a small grave for their dog on the property, which they were very sensitive about. The buyers realized this, and sent word that they would leave it in place.

For the Birds – The sellers had numerous bird feeders on the property. The buyers keyed in on this, and offered to continue feeding the birds.

Get a Grip – The sellers’ agent tended to give wrong information, did not handle details well, and was untrustworthy. In order to preserve the buyer’s trust, it was necessary to double check everything, handle paperwork, and watch deadlines.

6. Keep private things private.

Buyers may have some issues that should be kept private. They may have just sold their house, and need to act fast. They may need to start kids in school. They may be in the middle of a divorce. They may have an interest rate that is about to expire. Not one of these pieces of information will get them a better deal on a house. In fact, they all indicate that they are under pressure. Your buyers should be perceived as folks who are well qualified, who truly appreciate this home, and who can be trusted to close.

7. Get good information.

Here are some questions to ask before you and your clients compose an offer:

How is the market in general? How are other actives and recent sales priced?

How long has the home been on the market? Have there been price changes?

Did the house sell recently? What was the price?

Is there a time deadline that must be met? Would a pre or post lease be desirable?

What is the appraisal district value? The taxes? The HOA dues?

Is a disclosure available? A property inspection? A survey?

Are there any offers expected, or on the table now?

Price is just one consideration in the negotiation for a home. Other terms, such as financing, close date, repairs, or possession date may be just as important. Negotiating for a house requires skill in giving and taking information, and in communicating to the seller that your clients are the best buyers for their property.

The Quaich – From 17th Century to the Present Time

The word Quaich comes from the Gaelic word “cuach” which means cup. Throughout Scotland’s history it has been used to symbolise love and friendship.

It is thought that the first quaichs developed from scallop shells which were used ascups for drinking whiskey by people in the Highlands.. Similar to scallop shells quaichs were wide and shallow in design. handles were added to make them easier to hold. The shape of the quaich has been fixed for more than four hundred years.

Initially quaichs were made from a single piece of wood, from the late 17th century as craftsmen became more proficient they used light and dark wood and strands of copper to create intricate patterns from this time the skills needed to make quaichs were highly regarded. Other materials such as a range of materials were employed to make quaichs from stone and brass to horn and silver. The centre of the quaich was sometimes decorated with a silver coin or disc featuring a coat of arms or family motto – as well as adding a decorative aspect it serverd to hide any joins. The lugs (handles) were frequently covered with silver or pewter where the owners initials could be displayed. During the 17th century in Scotland there was a craze for adding ones initials to property.

In 1745 Bonnie Prince Charlie took the quaich with him to England when he travelled down from Edinburgh with his army. These quaichs had a glass bottom so that the drinker could keep an eye out on his drinking comrades.

The most romantic Quaich had a double bottom in which a lock of hair was placed, in 1589 King James VI of Scotland gave Anne of Norway such a Quaich as a wedding gift.

A piper is often rewarded for his participation at ceremonies with a draft from a quaich.

The quaich is still popular today and can be employed at many occasions:

It is used at many Scottish weddings, offered to guests at the top table as a symbol of the shared love of the bride and groom; at christenings it is used to drink to the health of the new child and in celebration of new life; as a welcome or farewell cup by clan chiefs.

Commemorative quaichs, inscribed with a team motto can awarded as a prizes, or given as gifts, these are commonly made of pewter or silver.

Quaichs are popular for toasting an occasion from wedding anniversaries to new year.

Whether for ornament or use they make gorgeous presents, an can be engraved with a personal message.

The Get Their Interest Presentation and the You Have Their Interest, Now Get the Money Presentation

There will be at least two presentations you make to a Venture Capitalist. The first is the “elevator pitch” or rather the quick, get their attention and interest presentation that will lead to the sending of the full business plan, if all goes as planned. Then comes the “Get the Money” presentation.

A good bit of time needs to go into creating these presentations. Let us first discuss the “Get Their Attention” presentation.

At this point you have written your business plan and have pulled out the Executive Summary for sending out to the Venture Capitalists, etc. You then need to create a cover letter that will go with that Executive Summary outlining how much money you want, how you want to use it (remember, the Executive Summary, while it will have the financials that outline how the money will be used in a spreadsheet, does not necessarily do so) and what you would look for from the Venture Capitalist after the money. You also ask for a date to do discuss the Executive Summary and to pursue rather they are interested in going forward.

Once the Venture Capitalist accepts your Executive Summary and agrees to meet with you, you should have a presentation that is geared to that Venture Capitalist. This presentation should be from fifteen to twenty slides, and should cover an overview of your product(s), and be sure to show the proof of concept version of the product(s), a rough breakdown of your industry, the market, the competition, and your Executive Staff. You should know enough about the Venture Capitalist to know what the triggers are for this person to peek their interest. In most cases, you can figure this first presentation will be done in less than or about thirty minutes, and leave about five to ten of those minutes for Questions and Answers. You want to be sure to have on hard a copy of your full business plan, should they be interested in going forward to the next steps. Most will request a few days to review your presentation and look at other factors as well before committing to going forward or backing out.

The next presentation is often about one and a half hours to three hours long, depending how long the Venture Capitalist gives you. At this point your presentation will be from thirty to 50 slides, going over the same items as above, but in more detail, and paying strong attention on how the money is going to be spent, your production time line, and your key competition. It should track to the business plan you have already given the Venture Capitalist. Expect to spend at least thirty minutes and probably a lot more on questions from the Venture Capitalist. Be sure to close it off with asking for the money!