A conversation that often goes un-discussed between real estate professionals and their clients is the negotiation. Everybody wants to know how the Realtor will market their home for sale in order to attract a sale and what the commissions will be to sell their home, but the topic of negotiation will most often go overlooked. It’s an unfortunate fact because negotiating is likely the most important part of what a real estate professional will do for you in a real estate transaction.
It used to be that a buyer’s Realtor would pull up to the seller’s home, meet with the seller and their real estate representative and present the offer. For skilled real estate professionals, presenting the offer was an art. Regardless of what was in the offer, it was an opportunity to set the stage for the negotiation to follow. Here’s why. In Never Split the Difference, Negotiating as if Your Life Depended on It by Chris Voss, he cites two famous studies on what makes a person like or dislike somebody. Professor Albert Mehrabian from UCLA created something called the 7 – 38 – 55 rule. 7 percent of the communication is based on the words that are spoken. 38 percent of communication is based on the delivery of the speaker’s tone of voice, and 55 percent comes from the speaker’s facial expressions and body language.
For a skilled negotiator and great communicators, the 7 – 38 – 55 rule is an important rule to keep in mind. Now consider the internet and technology age of today. We no longer get to present offers in person. Immediately, Realtors have now lost 55 percent (facial expressions and body language) and sometimes an additional 38 percent of that rule of communication (the speaker’s tone of voice). The art of negotiation is quickly becoming a lost art. It is becoming one of “split the difference”, at least among those that do not hone their negotiation skills. If Realtors are merely splitting the difference, where is the skill? Now consider that many millennial Realtors do not want to have a conversation on the telephone. There goes another 38 percent of the rule. We are left with the 7 percent which is the message heard when the words are spoken, or in this case, e-mailed or texted. This is where a skilled real estate negotiator can continue to be effective against a counterpart who is poorly equipped.
I can’t tell you how many times I have been called or e-mailed/texted about an offer that will arrive and the Realtor on the other end starts to set the stage for the negotiation by slagging my client’s property. Now tell me. Is that utilizing any of the 7-38-55 rule? It is the exact opposite and perhaps the weakest bargaining position to utilize against a skilled negotiator.
When you interview a real estate professional to represent you in a transaction, you want to ask about how the negotiations will be handled. A good real estate negotiator has a plan. They know how to draw information from their counterpart. They will communicate with you about an acceptable zone of proposed agreement (ZOPA), and not just any ZOPA where you might meet in the middle, but your ZOPA. They will have tactics in place to get to that zone and ultimately the goal of an acceptable offer. A skilled negotiator knows how to utilize market data. They know how to say things with the best psychological affect and know how to make the opposing side think they are in control, when in actuality the opposite side begins working to solve your problems, even if it is in print such as in an e-mail or a text because the other side will not speak on the telephone. It is also about calm and control, directing the negotiation in a positive manner and keeping the lines of communication flowing. Choosing a real estate professional who understands negotiation regardless of the communication tools left at their disposal is paramount to getting you a sale or purchase with excellent terms.
Marketing has its place in selling properties and with commissions, you want to make sure you are getting value for your dollar. Most importantly, make sure you are confident in your Realtor’s ability to represent you and negotiate for you when the rubber hits the road! This is where you will find true value and the true difference maker between real estate professionals.
Voss, Chris with Raz, Tahl. Never Split the Difference, Negotiating as if Your Life Depended on It. New York, New York: Harper Business, 2016.
Mehrabian, Albert. Silent Messages: Implicit Communication of Emotions and Attitudes, 2nd ed. Belmont, California: Wadsworth, 1981.