Mastering Negotiation in Real Estate

Evan Fuchs is back with us for Part 2 of our conversation on negotiation, a favorite topic of mine! Welcome back!

Markets will shift, and changes are happening. We need to remember the core tenets and basics of good negotiation while remembering that the details change from client to client. Some of you work in different markets or states, and you need to be aware of those details to help you negotiate specifically for what you and your client need. Negotiation is one of those significant topics I suggest we learn about constantly.

Evan Fuchs is a 28-year award-winning REALTOR® and industry leader from Bullhead City, Arizona. Evan and I discuss training, and we go into one book with four tenets that can help us create win-win scenarios or at least manage the situations with a good attitude. Sometimes, operating on those principles helps us not to become so emotionally involved. There is always more going on under the surface when negotiating. We're going to discuss how that affects your conversations as well. Let's join Evan to level up some negotiation today!

[2:07] We are talking negotiation, and if you didn't hear our first episode, we hope you'll go back to that; we discussed things like the tangibles and intangibles of negotiation and why you need to have negotiation skills. We're giving you the tip of the iceberg. We'll talk later about some training you can get.

[2:33] We will share some great principles in this episode and discuss how agents can improve their skills for negotiating on their behalf. We will need better communication in different spaces where the terms are unclear.

[3:25] Evan cites two episodes Monica did with Brent Lancaster on the Buyer Representation Agreement to help negotiate with your clients. We agents must understand our obligations under the law, the Code of Ethics, and the agreements we must follow that create a frame for our business to stay inside.

[4:05] Inside that frame, your business is your canvas. You can paint your canvas any way you want. You can say, "Here is how I'm going to run my business, as long as I'm not going out of bounds." Then you bring your business to the market, and it responds if it sees value in hiring you for what you bring.

[4:31] It's not easy to set boundaries and know the rules of engagement. Brokers are deciding what parameters will be a win for their agents and brokerage firms. With some brokerage firms, your business canvas is not as significant. Bring your ideas and creativity back to your broker.

[5:44] The difference between your business model and another agent's model is what will appeal to potential clients. Explaining what you charge and what the client gets from you will hire you. Be very intentional about understanding who your target audience is and what services you offer.

[6:39] Evan says finding clients can't be an accident. You must be able to show you how to walk the walk and say, 'This is why I should be here representing you.'

[6:51] Sometimes, in a client meeting or a class, however much she prepares, people will ask Monica an unexpected question for which she doesn't have a great answer. Evan says it's essential to give feedback to yourself on what worked and what didn't work, and then you iterate on that. Have a place to practice!

[7:51] Hold scenarios or role-playing with partners in your office, coaches, or spouses. Practice the words and get feedback before you go live. Once you go live, measure what works and what doesn't, and then try again. It's a different ballgame for many people, and you might not get it right on the first try.

[9:10] Evan talked with his college daughter about what's happening in real estate. It helped him see another perspective. That's always a win.

[9:40] Preparation for negotiating is essential. Be intentional. What do they need? What value do you bring to the table? How are you communicating and connecting with them? How am I qualifying them? How are you communicating what working with you looks like?

[10:21] If you do the preparation and get a win, you know it worked. If it went South, tell yourself to handle that differently next time. Over time, you work out systems where you are repeating success. Monica encourages you to learn even from your accomplishments.

[10:56] Monica is confident and open-minded when she goes into a meeting. She listens to what their needs are instead of selling them on herself. She wants to hear what they're saying, even if she doesn't have the answer for them.

[11:29] Evan says if you want to improve relationships with other people and be a better communicator, listening, hearing what they say, asking questions, giving feedback, and being interested is where rich relationships come from.

[11:49] Sometimes, just listening and being there, you'll hear the person tell you what they need from you. If you were too busy talking, selling, or presenting, you might have missed that and missed out on a great client.

[12:06] Monica reminds agents that going through their broker or association's paperwork provides a structure. It's like a third party in the negotiation.

[12:43] Evan talks about appealing to different learning styles. It's always better to ask somebody a question than to tell them something. It's also better to show them something than to tell them something. Try to mix those things. Evan would want you to show him the process visually if he were buying.

[13:37] If Evan were selling, he would also want you to walk him through the marketing process with visuals.

[13:52] You must use leave-behind visuals to show people the market conditions for buying and selling. The visuals can negotiate for you in your absence.

[14:37] Monica asks the public to interview more than one agent so they see different styles, and it will be easier to recognize they have a choice between different kinds of agents. Leave-behind items are hugely important, especially if they are amazing materials. Your professionalism is visible in the materials.

[15:18] Be confident as an agent that you belong at the table and believe in yourself. It wasn't meant to be if the client didn't pick you up. Confidence comes through preparation, knowledge, and experience.

[16:21] As a new agent, Monica went to every class at her association for two years to gain knowledge and confidence. Evan didn't take classes at first but then took a GRI class. After two days, he realized he had bought lots of someone's experience, saving him time. It changed his attitude about learning.

[17:55] Monica says not all classes will be perfect but asks you to find the instructors that give you value.

[18:24] There are many helpful books on negotiation. Monica and Evan agree that one book they love is Getting to Yes. Evan has never found a better book to learn negotiation. It teaches four principles of negotiating. The authors were part of the Harvard Negotiation Project, and these are proven principles.

[19:28] The principles apply well to real estate negotiation. They support the win-win mindset. You're trying to collaborate with the other party without giving up what's most important to you.

[19:58] The first of the four principles of Getting to Yes is to separate the people from the problem. Very often, the problem in the way is a people problem. You have to solve the people problem before you can solve the problem you're negotiating.

[21:29] When an agent says their client won't go for that, Evan asks what the agent thinks their client won't go for, why the agent thinks that, and then tries to solve it with the agent. If it's a price, look at comps together and discuss what constitutes a fair price.

[22:25] What you don't want to do is defend it and try to convince somebody who's dug their heels in. Go back to common ground, bring the temperature down first, and find out why they're reacting that way. Set your ego aside. Your job is to save the relationship with this person so you can get to the finish line.

[23:04] The second principle focuses on interests, not positions. Under every position (what), a statement is an interest (why). The position has one solution. The interest has endless solutions. Understanding why someone takes a position creates new options for working together to find the best path to win.

[24:23] When somebody says what they want, ask them why or try to find out why if you can't ask them directly. Once you know the underlying interest, you have many more ways to deal with it that have nothing to do with the position. Monica covers this principle in three to four hours in her negotiation classes.

[25:00] Monica adds that when she needs to understand the why, she loves the phrases "Tell me more" or "Help me understand" to get them to tell her the why without her asking directly. Evan suggests checking for understanding with, "It sounds like you're saying …" to confirm.

[25:37] The same principle applies to negotiating with the buyer. Find the why under any positions they take on what they are looking for in a house. The value of a buyer's agent is to get to the why and expand the options for their clients.

[26:43] The third principle is to invent options for mutual gain. Don't view this as a competition, but as building a relationship. You'll sit on the same table and look at the problem together. This is where all the pieces and intangibles come together. This is the time for options and value negotiation.

[28:22] The fourth principle insists on using objective criteria. This may need a third party, such as an appraiser, to provide an objective value. MLS comps and public records are objective. Ask, "If we can come up with a fair price, do you think we can make a deal?" Then, you bring in your CMA.

[29:24] When you submit an offer to another agent, include your comparative market analysis that supports the offer. Review it with them over the phone so that it makes sense; it's not just an arbitrary number. On your end, listen with an open mind when you review objective criteria.

[30:04] I hope our listeners recognize how much more there is to negotiation than just conversing and putting terms on paper.

[30:23] Evan's final word: "I took a class from Ed Hatch 20 years ago on negotiating, and he said something that has stuck with me ever since, which is 'The negotiation begins long before the amateur negotiator realizes it.'"

[30:42] "As professional negotiators, our preparation, our conversations, what we've done to get our clients to understand their negotiations; the person we're negotiating with may start when they get the offer, but we started long ago. Do the work, do the prep. What a tremendous advantage that gives you!"

[31:45] Thank you so much to Evan Fuchs for sharing his wisdom with us, learned over many years of training and action with real people and situations.

[31:53] You can find more opportunities to learn about negotiation at Learning.REALTOR. Evan Fuchs and Lynn Madison have micro-courses there, and you can also link to the Real Estate Negotiation Expert Class. Please attend some local negotiation classes through your association or online.

[32:20] Once you start learning about negotiation and looking at these opportunities more objectively, you're going to find opportunities for you to learn in your everyday situation. I hope you can find those and share them. It will improve your business.

[32:38] Thanks for joining us! I'm Monica Neubauer for the Center for REALTOR® Development. And I hope you keep busy out there selling lots of properties!

Tweetables:

"It can't be an accident. You have to be able to show and walk the walk. 'This is why I should be here representing you.' That's the way that I look at it." — Evan Fuchs

"That's where we are right now. It's a different ballgame for a lot of people, and they're not going to get it right, necessarily, on the first try." — Evan Fuchs

"If you want to improve relationships with other people and be a better communicator with them, listening, hearing what they're saying, asking questions, giving feedback, and being interested is where rich relationships come from." — Evan Fuchs

"Confidence is the root of most of these conversations; my confidence as an agent that I believe I should be here. I bring something worth being at this table. Therefore, I'm going to be a better negotiator about it." — Evan Fuchs

"It doesn't cost me anything to be nice to you. If it's important to you that the other person is nice, I just expanded the pie a little bit by throwing in some intangibles." — Evan Fuchs

Guest Links:

Evan Fuchs, Broker/Owner of Bullhead Laughlin Realty, Speaker, Educator

Episode 100, "Explaining the Buyer Agreement and How to Use it Effectively with Brent Lancaster: Part 1" Episode 101, "Explaining the Buyer Agreement and How to Use it Effectively with Brent Lancaster: Part 2" Getting to Yes: Negotiating Agreement Without Giving In, by Roger Fisher, William L. Ury, and Bruce Patton

NAR Resource Links

ABR® Accredited Buyer's Representative

Additional Links:

Crdpodcast@nar.realtor

Crdpodcast.REALTOR

Learning.REALTOR — for NAR Online Education

CRD.REALTOR — List of all courses offered

Host Information:

Monica Neubauer

Speaker/Podcaster/REALTOR®

Monica@MonicaNeubauer.com

MonicaNeubauer.com

FranklinTNBlog.com

Monica's Facebook Page: Facebook.com/Monica.Neubauer

Instagram: Instagram.com/MonicaNeubauerSpeaks

Guest Bio

Evan Fuchs ABR, CRB, CRS, GRI, RENE, RSPS, SRS, e-PRO

Evan Fuchs speaks nationally on leadership, sales, strategic planning, and team building. A recognized industry leader with 28 years of experience, Evan is a past state president, four-time REALTOR® of the Year, and has been the broker/owner of Bullhead Laughlin Realty in Bullhead City, AZ, since 1999.

Evan combines his experience in business and leadership with a down-to-earth style to deliver engaging and actionable programs. In addition to designations and certifications, such as the Accredited Buyer Representative, Certified Residential Broker, and Real Estate Negotiation Expert, Evan presents and develops custom programs, including the Arizona Leadership Training Academy. He is also a John Maxwell Certified Leadership Trainer.

A proud dad, accomplished concertgoer, and lifelong learner, Evan loves collaborating with individuals and teams who aspire to produce their best work.