Negotiation | Real Estate Negotiation Institute

Posts Tagged: negotiation

HAR Produces First MCNE Graduates in the Country

Thursday, July 14th, 2011

Thirty Texas agents have completed a new training program at Houston Association of Realtors® (HAR) that raises the bar for professional representation in real estate. During May of 2011, 29 HAR members (and one commuting Dallas agent) became the first agents in the country to complete the Master Certified Negotiation Expert (MCNE®) designation program.

The MCNE training program is a negotiation training program unlike any other in the real estate industry. The six classes train real estate professionals in negotiation skills similar to those used in corporate America and taught at the finest schools in the country. Importantly, the training includes application of proven negotiation techniques in real estate negotiation situations that help improve client results. “Our goal is to raise the bar in professional representation of buyers and sellers in the real estate industry,” says Tom Hayman, CEO, and Co-Founder (along with John Wenner) of the Real Estate Negotiation Institute.

Agents who earn the MCNE designation definitely have a marketing advantage. One MCNE graduate completed her best year ever by closing 18 transactions during the 3+ months of her MCNE courses (including two transactions done completely by email!).

Clients hire real estate agents to help achieve the best results possible in the sale or purchase of property. While no agent can guarantee specific results for a buyer or seller, MCNE agents can prove they are the best trained real estate professionals in the one skill that influences the final outcome the most – negotiation! “Negotiation skills are fundamental to success in real estate and the MCNE designation shows clients that you have invested significant time and effort to acquire higher level skills for their benefit,” says Hayman.

Initial comments from MCNE graduates show the success and excitement of having achieved this milestone:

“The negotiation classes have helped me tremendously with my business. The referrals I am receiving from clients are proof they were very satisfied and impressed with my negotiation skills. I recommend your classes to many of my fellow agents and friends.” Joan Collins

“The … MCNE training [also applies to my] duties as a Mediation officer to Harris County small claims courts through the Dispute Resolution Center! I have already pulled from this information so many times that I have lost count!” Mary Lou Green

“Sellers recognize that they need a good negotiator to get things done. Once I explain the ‘plan’ that we have for helping to achieve their goals, they realize the benefit of having an MCNE representing them.” Vicki Looney.

“A woman called me from Seattle as they will be moving here next summer. She was especially impressed with my MCNE because she is a negotiator with Microsoft and was glad she could work with someone who understood negotiations! I took great pride in being able to tell her that I was one of the first in the Houston area to get the CNE® designation and in the first 30 in the nation to achieve the MCNE.” Vickey Wachtel

The six courses required for the MCNE designation are:

- Certified Negotiation Expert (CNE®) designation course (2-days)

- Advanced Negotiation Techniques for Listing Agents (1-day)

- Advanced Negotiation Techniques for Buyer’s Agents (1-day)

- Mastering Email Negotiations in Real Estate (1-day)

- Cultural Factors in Real Estate Negotiations (3 hours)

- Negotiating Across Generations in Real Estate (3 hours)

How to Counter in a Negotiation without Giving a Number

Thursday, June 30th, 2011

Real estate negotiation offers can vary widely in what agents consider to be reasonable, but typically, a reasonable offer is one that is both credible and defensible based on market data. When you find yourself offered a starting position that is unreasonably high-ball or low-ball, the best strategy might be to counter without giving a figure. First, ask the other agent to explain the basis for their starting position. (See also, Anchors in Negotiations)

If the opening bid seems indefensible, counter with a simple statement that indicates your dissatisfaction without tipping your hand about what number you want to see. Remember, you might unintentionally give away a figure that is higher or lower than the other party expected – to the disadvantage of your client. It is best to use phrases such as, “All reasonable offers will be considered.” Or, “You’ll have to do better than that.”

If needed, you could counter with a statement that focuses on contract details rather the price, such as, “Are you expecting _____ to be included?” Or, “We need to make allowances for _____.”

If the offer is still not defensible, you could counter with an encouraging statement such as, “Have your client take another look and think it over.” In this way you are still negotiating favorably and leaving the door open for them to return with a more reasonable figure.

If these strategies do not get the negotiation moving in a more reasonable direction, consider stating a range instead of a figure. State the lowest part of your range as the absolute lowest figure you can accept and the highest part of the range being slightly higher than your ideal figure. This way, any figure that falls in between should begin a successful negotiation for both parties.

Anchors in Negotiations

Thursday, June 9th, 2011

The notion of an anchor in real estate negotiations refers to the asking price of a home or the first offer. The idea is simple, that the negotiation is then tied to – anchored at – that fixed starting point. Like a ship at anchor, the negotiations will often drift around the anchor point as details are presented back and forth, much like the tides and winds of the ocean.

However, whether you represent a buyer or a seller, that anchor point does not have to be accepted as is. There are many reasons to reset the anchor point, such as the commodity value, relative scarcity, or uniqueness of the property. Since initial anchors are often set based on emotion, a fact-based approach to the negotiation can prove successful.

Research is key to removing an artificially set anchor point. If the price seems too high or the offer seems too low, first ask about the other party’s basis for that price and listen to their reasoning. Be prepared with your own research of comparable properties to support your negotiation point.

Facts are the single greatest argument to avoid “splitting the difference,” a common negotiation counter. There is simply no reason to split the difference in a price or offer that was artificially set to begin with. Using your research, make reasonable offers that are supported by facts.

The old adage of, “buy low/sell high,” does not hold up well in today’s real estate markets. Starting high to coax a higher counter offer only works if you have a buyer already at the table. Setting lower anchors can encourage more interest and more buyers to participate, leading to a higher final price as bidders work against each other.

Negotiation anchors can and should be moved if the facts support your position. Successful negotiations are the result of reasonable, fact-based offers.

Negotiating in Writing or Negotiating in Email

Tuesday, May 31st, 2011

Without the immediacy of face-to-face communications, written negotiation provides time and distance – two significant advantages. Most importantly there is time to carefully consider the information offered and to craft a reply that is well reasoned and thoroughly researched. Negotiating in writing also provides the distance necessary for emotions and whims to be removed as a factor. And by its very nature, negotiating in writing provides a transcript of the process that keeps all parties accountable to their positions.

To successfully complete a written negotiation, there are some steps that will help you present your best positions.

Know Who You Are Negotiating With
As with all negotiations, get as much background on the other party as possible. Review any previous written information you have received from them for clues to style and word choices. Check to see if the communication is direct or indirect, formal or informal, positive or negative. These clues will help you author replies that are more readily accepted.

Watch for Changes in Tone
Once the negotiations are underway, watch each new communication for changes in tone from the previously established pattern. Try to notice if negative, short or terse replies become common. Likewise notice expansive or evasive replies. These changes in tone will help you understand the changing positions of the other party.

Think Before You Send
Review the actual individual words of your negotiation before you press “Send.” Check to see if any of the words may hold a different meaning for the other party. Avoid, define or remove any slang, jargon, and acronyms.

Negotiating in writing has some advantages and a few disadvantages. Adding this dimension to your arsenal of professional negotiation skills will increase your ability to successfully negotiate with almost anyone.

John Wenner Featured in Today’s Buyer’s Rep Magazine

Tuesday, April 19th, 2011

John Wenner, ABR, CRS, GREEN, GRI, SFR, and co-founder of the Real Estate Negotiation Institute, was recently featured in the February 2011 issue of Today’s Buyer’s Rep magazine. In the detailed article, Wenner offers tips for successful negotiation for buyer’s representatives.

Cultural Factors in Negotiations – Part 1

Friday, April 15th, 2011

Different cultures enter into negotiation with different expectations. Therefore, when dealing with negotiations across cultures, you will find that the steps you need to take will be different. Look for clues that help you understand how the other party views sense of time, appropriateness of places, significance of gender and body language, and patterns of communication. Being aware of these differences and adjusting your negotiation expectations will provide the best environment for a successful negotiation.

In part 1 of this 2 part post, we will examine the factors of time and place.

Sense of Time
Some cultures run rigidly by the clock, while others are more fluid when interpreting a start and end time for meetings or deadlines. Try to be as flexible as possible with time constraints. Beginning a meeting later than planned is a minor inconvenience if the outcome is favorable for you. While you may be ingrained with the idea that a late start is a snub or rude statement, other cultures may simply view time as an inconsequential factor to preparedness or convenience.

Settings or Places
Various cultures view the setting and location of negotiations as critical. Some will not want to discuss business during refreshments or meals, while others will come directly to the point while giving you a hug or hoisting a beverage. Be open to either launching in directly or waiting until invited to discuss the matter at hand. Allow your host to dictate the pace. Or if you are the host, try to discern the other party’s expectations beforehand.

Negotiation with different cultures provides an interesting challenge and a new facet in your professional experience. In part 2 of Cultural Factors in Negotiations, we will elaborate on gender, body language, and communication patterns that may affect negotiations with cultural variations.