Foundations of Negotiating
QUIZ: UNDERSTANDING DIFFERENT NEGOTIATING STYLES
DISCOVERING YOUR NEGOTIATING STYLE
1.) When you hear that you will have to be a part of a negotiation, what do you look forward to?
A. Satisfying the needs of the other party and maintaining relationships.
B. You don't look forward to negotiations because you don't like conflict.
C. Finding creative solutions to satisfy both parties.
D. The challenge and an opportunity to win.
E. Finding solutions that are fair to both parties.
2.) When initially meeting the other party, you...
A. Take time to connect on a personal level, as you want to set a positive tone for the negotiation.
B. Stay quiet and pass opening negotiations on to another member of the team.
C. Strive for mutual gain using open and seeking questions to determine the other party’s needs.
D. Quickly present your information. You have little time for formalities before getting down to business.
E. Listen to the other party’s proposition before presenting your own.
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DISCOVERING YOUR NEGOTIATING STYLE
3.) During a negotiation, how do you communicate with the other party?
A. In a friendly and eager to please manner. You find common interests to talk about, such as the weather, etc.
B. In a passive manner, and you tread with a great deal of caution. You may attempt to shift responsibility to another person in your team.
C. In an open and honest manner. You are focused on finding imaginative solutions through the use of logic and thorough research.
D. In an assertive and direct manner. You focus on the task at hand, so initial openings and greetings are no more than cursory.
E. In a fair manner but eager to close the deal. You happily trade one thing for another.
4.) If a negotiation is not going well, you...
A. Attempt to smooth over differences to satisfy the needs of the other party. Likely to concede to accommodate the other party.
B. Get frustrated and feel that you are being personally taken advantage of. You are inclined to walk away from the negotiation.
C. Focus on the available data to look for suitable alternatives to achieve the desired outcome.
D. Focus on strategies you can use to achieve your desired outcome with no concern for the other party.
E. Aim to find middle ground and secure the deal quickly, even if you end up agreeing with less than you wanted.
DISCOVERING YOUR NEGOTIATING STYLE
5) Are you confident negotiating alone, or do you prefer a team?
A. You want to be involved, but in the periphery, befriending the other party and gaining useful insights.
B. Prefer action behind the scenes and passing the physical negotiation process to others in the team.
C. Much prefer working in a team to brainstorm ideas and share suggestions.
D. Prefer negotiating individually because you trust your instincts and ability to adapt your strategy to the situation.
E. Prefer group situations, but willing to take the lead or indeed any other role if needed.
6.) When tempers flare, how do you deal with the situation?
A. Seek to mend personal fences by any means possible. This could be by changing the subject or injecting humor into the negotiation.
B. You feel threatened and vulnerable, which may cause you to shut down and delay any kind of decision.
C. Try to diffuse the situation exploring new and alternative solutions for consideration.
D. Reiterate and reinforce why this course of action is a good one in order to force the other party to agree.
E. Suggest both parties go over the decision again calmly, and then discuss their issues.
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DISCOVERING YOUR NEGOTIATING STYLE
7.) What situation would unnerve you or make you lack confidence?
A. If the other party is highly competitive and aggressive, it becomes difficult to build a relationship with them.
B. Many things unnerve you in negotiation. Aggression from the other party, conflict between team members, lack of preparation time, amongst others.
C. The essence of loyalty and trust being questioned or challenged. This could be through a change in direction, vision or outcome by the other party.
D. You tend not to get phased by negotiation situations as you have confidence in your ability.
E. Better planning by the other team would make you feel unnerved, which might make you rush the negotiation process.
8.) At the conclusion of a negotiation, you...
A. Care about what the other party thinks about you and want to end the negotiation on a positive note.
B. May crack under the pressure and make the final concession.
C. Make sure both parties have their goals met, which could take longer than desired.
D. Are more concerned about whether you have achieved your goals over the other party.
E. Are concerned that the other party feels the final outcome was fair.
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A’S = ACCOMMODATING
• Your main concern while negotiating is preserving relationships. You like to connect on a personal level, and you would be put out if the other party wasn't interested in also building relationships.
• It matters to you what the other party thinks of you.
B’S = AVOIDING
• You really don't like negotiations! You try to avoid any conflict by any means possible, maybe by passing the responsibility to another member of your team or staying quiet.
• You find negotiations intimidating and would be susceptible to threats, therefore you would rather work behind the scenes.
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C’S = COLLABORATIVE
• You are an open and honest negotiator, who understands the concerns and interests of the other party. You enjoy negotiations especially if it involves finding creative solutions to mutually satisfy both parties.
• However, you often turn simple situations into more complicated ones by overthinking and exploring many alternatives.
D’S = COMPETITIVE
• You are a highly results-driven, focused and assertive negotiator who can often become aggressive. You thrive in a negotiation situation as you enjoy the opportunity to win.
• You have a strategic mind, therefore you don't get phased by your opposition. Being right matters more to you than preserving relationships.
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• Your main concern while negotiating is finding middle ground and doing what's fair for both parties. You would rather compromise and settle with less than anticipated in order to satisfy the other party's needs.
• You may rush negotiations and make concessions too quickly which can lead to a loss.
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E’S = COMPROMISING
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IDENTIFYING THE CHARACTERISTICS OF A GREAT NEGOTIATOR
CHARACTERISTICS OF A GREAT NEGOTIATOR
Strong Listening Skills
Asks Open-Ended Questions
Perseverance
Ability to be quiet
Unemotional
Good Communicator
Goal Oriented but NOT tied to a specific outcome
Relationship Builder
Professional
STRONG COMMUNICATION SKILLS INCLUDE
Having an open mind
Using the correct tone of voice
Conveying a clear message
Knowing when to speak
Knowing when to remain silent
Remembering to backtrack
Managing Emotions
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12 Presented by the Education Team at Independence Title. TREC Approved Continuing Education Provider License# 403. People make emotional decisions and justify them with logic! NEUROSCIENCE HAS PROVEN IT… 23 MANAGING EMOTIONS Becoming a Great Negotiator 24
WHAT ARE SOME COMMON EMOTIONS IN A NEGOTIATION?
• Desire
• Frustration
• Competition
• Fear
• Greed
• Anger
TACTIC #1 FOR MANAGING EMOTIONS
Focus on the Goal
Focus on their goal and stay positive even in a difficult negotiation.
Ø“This home is in the school district you wanted; your kids will be able to attend the school that is walking distance from the house.”
Ø“This sales price will give you a great return on your investment.”
Ø“Accepting this offer will allow you to close this chapter and move on to the next phase of life.”
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TACTIC #2 FOR MANAGING EMOTIONS
• Be Empathetic
• Sometimes the client just needs to go through their emotions, feel and vent their feelings – hear them out.
TACTIC #3 FOR MANAGING EMOTIONS
Don’t spend TOO much time on any one point.
Every real estate negotiation has multiple points of negotiation such as price, closing date, closing costs, etc. Don’t let the client get caught up on the one thing they don’t like.
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TACTIC #4 FOR MANAGING EMOTIONS
Ask Small Commitment Questions
Ø“I know you don’t like the closing date but are you okay with the price?”
Ø“I know you want them to fix the kitchen sink, but if that didn’t happen, would you proceed with the purchase?”
Ø“If we did not have this one issue, would you move forward?”
TACTIC #5 FOR MANAGING EMOTIONS
Avoid Rushing the Client
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Unless there’s a real deadline that you need to keep your client aware of…don’t rush them.
TACTIC #6 FOR MANAGING EMOTIONS
Handling & Preventing Objections
Ø“Now I know this offer is likely less than you were expecting but based on the current market conditions and slightly lower buyer demand, not to mention new construction nearby…we think this is a strong offer.”
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31 BEING PROACTIVELY AWARE Becoming a Great Negotiator 32
You always have to be on the look out for data and clues!
READING SIGNALS IN REAL ESTATE
• Completely empty house
• Partially packed house – boxes starting to be packed
• Half-empty house – divorce, empty nest
• Carefully staged property
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HOW CAN YOU AVOID SENDING THOSE SIGNALS WHEN YOU’RE ON THE LISTING SIDE?
• Explain ‘signals’ to your Seller who likely won’t realize that buyers (and their agents) will be looking for clues in everything about their home.
• Encourage your sellers to NOT pack up until absolutely necessary and if/when necessary place boxes in storage or attic, etc.
• Fill in empty closet or room space where possible to not leave clues of your situation.
• Don’t leave out clear indicators of impending dates or deadlines like notes on the fridge or in your home office.
Movers
Monday 8am!
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CLASSIC TACTICS FOR NEGOTIATING
BID LOW/JUMP HIGH
Go in low with the hopes they’ll bite but prepared to jump much higher when that’s not accepted.
Traditionally used when the property has high DOM and the Buyer wants to ‘test’ the seller’s position or desperation.
EITHER/OR BARGAINING CHIPS
Including items in the offer that can be given away.
Asking for an appliance that could actually be given away.
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TIME AS A BARGAINING CHIP
Timing is often as important as price or other terms (sometimes even more so) which makes it a powerful bargaining chip.
SPLIT THE DIFFERENCE
Meet in the middle
Buyer offered $5,000 less than asking price (or 60 day closing when you want a 30 day closing)…
Split the difference – counter $2,500 lower (or 45 day closing) to split the difference.
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TRADE - OFF
I will give you __________________
If you give me __________________ Examples:
• Lower purchase price but no closing costs
• Closing costs but no repairs
• Repairs but the closing date of my choice
TAPERING
Tapering is a method of each counter offer (on either side) being only slightly higher or lower.
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22 Presented by the Education Team at Independence Title. TREC Approved Continuing Education Provider License# 403. TAKE IT OR LEAVE IT Seller or Buyer responds with Final Offer 43
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WORKING WITH THE OTHER AGENT
SUMMARY POINTS
• Strong negotiators must master the specific skills needed to protect their clients
• There is power in having information about the property, the neighborhood, and the market as well as in the motivations and needs of everyone involved in the transaction
• All parties are emotional during a negotiation – even the agents! Understanding this fact, anticipating emotion and developing skills to manage those emotions are important to being a great Negotiator.
• Determining the top negotiating items then a range of acceptance is important to guiding the buyer/seller in selecting a strategy and objectively considering offers.
• Anticipating the response prior to making the offer/counter-offer strengthens the clients’ position.
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BE THAT AGENT EVERYONE WANTS TO WORK WITH • Learn to take issues and focus on solutions instead of turning everything into an adversarial crisis • Avoid using inflammatory language like: • Deal Breaker • Freaking Out
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https://youtu.be/02FHk1Yaaik
Presented by the Education Team at Independence Title. TREC Approved Continuing Education Provider License# 403.
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