By Bob Corcoran
Okay, here’s the deal. The real estate market probably isn’t where you’d like it to be right now. But here’s something that might make you feel a little better: I’ve always found it helps to see things in perspective – especially when things aren’t going the way you think they should be going.
Let’s get a little perspective on this real estate market we keep hearing so much doom and gloom about. First, if you’re old enough to remember disco, you’re also old enough to remember double-digit interest rates.
I’d like to remind you that today’s interest rates are one heck of a bargain. Perspective can turn a bad mood into a good one when you give it half a chance. And consider this market – with perspective. Sure, during the last few years we saw a very hot seller’s market – you put houses on the market with reasonable prices and let the bidding begin.
But today, things have shifted, balanced out as I like to put it, and what I see is really more of a traditional market where buyers now have their share of homes to choose from. So the negotiation game between sellers and buyers (and their respective agents) is more nuanced.
Here are four tips to help you negotiate and succeed in a traditional market:
1. Know the market. Without exception, those who have the most information and use it wisely win negotiations. Therefore, you should know the average days on market, list-to-sell price ratios, home amenities and all the other basics. Today’s homebuyers are educated and well versed in the home buying process, due mostly to the Internet. Nevertheless, moving from renter to homeowner is daunting and many need an agent for guidance and expertise. Be an expert in your market!
2. Know buyers’ motivations. A first cousin to knowing the market is knowing (and understanding) buyers. Are they moving with a job? What’s their timeframe? Do they like the school district? Real estate professionals often ask me how to get buyers off the fence. The answer? Understand buyers by asking the right questions. And that means sharpening your scripts so that you ask open-ended questions and unearth key information about your buyers and their motivations.
3. Create a sense of urgency. In a traditional market, smart buyers know there are deals to be had, and they don’t want to lose out on a good deal. Will interest rates start to rise? Even though there are homes on the market, don’t think buyers won’t start snapping up those good properties at any time. And remember the power of suggestion. Use this statement: “Here’s what I recommend we do …” verbiage will often get the buyer moving toward action.
4. Be prepared to compromise. It’s rare when win-win actually means that the buyer and seller got everything they wanted. In the real world, it means they both did their share of give and take. So instead of negotiating from a I-must-win-at-all-costs position, stay focused on your top priorities and keep your emotions in check. And be careful and tactful with how you respond to offers you know won’t be accepted. You and your client have done the homework to arrive at the asking price, so explain that to those who make offers instead of a flat rejection.
Remember, when buyers and sellers get serious, the only thing that closes the deal is competent negotiation. It’s what you do. It’s what you signed up for. And it’s where you can shine to bring deals to a close.
So keep things in perspective, stay positive and work hard – everything will work out great!