Many people think negotiations start when the first offer is signed and end when a contract is signed. It actually starts at the first point of contact with the client, and does not end with the closing of the sale. In most sales, there are at least two major points of negotiating: the first stage being to get a ratified contract and the second stage being to resolve any repair issues.
You will probably have other negotiations along the way. As an example of negotiations extending after the closing of the sale, I have had buyers call after the closing wanting to continue negotiations on the condition of the house. My favorite one of these calls was from a buyer who wanted my seller to be responsible for the opossum that got into the house and ate the wiring on the dishwasher while they were remodeling a month after the closing.
The unknown is scary. Most people do not know the entire process of buying and selling real estate. So, walk your client through all the steps in the negotiation, tell them what to do and what not to do, and answer all their questions. For example, coach your buyer clients that if they meet the seller or listing agent do not tell them that “they just have to buy this house,” or “that it is the only one for them.” Once your clients know the entire process, it will be less scary.
Before you start, figure out where you need to end up. Most people just jump in, and flail away. Instead, figure out where you are, then where you want to be. Do not just figure out one ending point, look at the range of acceptable results. Look at what would happen if you aim high and focus on the best outcome you can imagine. Next, look at a mid range result that you would be satisfied with and make that your primary target. Then, figure out your reservation result, the one that is just barely acceptable that is slightly better than walking away. Also, you need to figure out your other choices, e.g. other homes you could purchase that would satisfy your needs or other buyers who could purchase your property
The party with the most alternatives in the negotiations has the most power. So, figure out several ways to get from where you are to where you want to be. For each alternate route, evaluate what the various tactics would be, and decide how well you can predict the other parties response to each of those steps. Some choices may be easier for the other party to react to, and increase your ability to predict their response. The more predictable path may have an advantage. Then, put all of the tactics together into a comprehensive strategy that becomes your game plan.
As a part of this strategy, you can make a list of concessions that you are willing to make and ones that will never be made. This will help you decide what to concede first. It also helps to have a list of minor concessions, so that you will have something to throw in to give your counter part one last victory to put the deal together. In short, visualize most of your moves before you begin.
How Do You Develop a Great Game Plan ?
You can learn by trial and error, and if you study the results well enough, you can learn which game plans work and which fail. You can read books to learn ideas from other people’s experience. It has taken me twenty nine years of studying books then trial and error, then more reading, more reflection, more trial and less errors to get to where I am now. So, you can click here to join the Real Estate Negotiating Institute learn from the experiences of all the members of the group. If you can wait until spring, you can click here to read the book “Create A Great Deal, The Art of Real Estate Negotiating where the chapter on Game Plan will provide more insight.
Thank you for planning ahead in your negotiations.