How Important Is It To Negotiate For Your Client?

Over the years we have seen REALTORS® use the marketing phrase “I will negotiate for you!” and acquire negotiation expertise certifications from various entities.

How does this translate for your client?

Recently I was teaching a class at a state association of REALTORS® who indicated that being at the presentation was “old school” – no one does this anymore.  “Then, how…?”  The comments ranged from, “I discuss the offer with the other agent” to “With the permission of my buyer, I top the offer with an explanation of the wants and needs of my buyer”.

If the purpose of a negotiation is to “do a deal”, would it not be in the best interest of the client and their REALTOR® to sit down together and hash out the issues?  With the client in the mix?

From The “Harvard Negotiation Project: 5 Lasting Rules For Negotiating Anything”:

1. Don’t Bargain Over Positions
2. Separate the People From the Problem
3. Focus on Interests
4. Invent Options for Mutual Gain
5. Insist on Using Objective Criteria

The Harvard Negotiation Project began in 1979 to assist business people better their conflict resolution skills.  Your question would be: “Presenting a contract is not conflict resolution, so why treat it like a conflict?”

Would it be fair to say that unless an offer is full price and meets the Seller’s every want and need, there might be areas of contention?  Or conflict?

While my role today is not primarily one of REALTOR® listing or selling agent (though I do take referral business), I do as many as 20-30 Maricopa County Court mediations during the period of a month(voluntary- no pay).  When everyone shows up, my settlement rate is over 80%.  On some days, all 4 mediations end up with a full settlement.

How?  By remembering that the mediation is about the parties and the role of mediator is one of directing the discussion to an agreement made by both parties.  Sound a bit like negotiating?

First, consider that your client wants a property at a particular price and with certain terms.  Second, consider that some of these terms and conditions may be “negotiable”.  Third, consider that the offer may not suit the Seller(or the counter offer may not suit the buyer).  Fourth, consider what the outcome may be if your advocacy gets in the way or you misspeak.

My mediations involve one or two attorneys, or maybe no attorneys at all.  The best and easiest mediations are with attorneys in the room with their clients, mainly because they present a clear and balanced picture of advocacy for their clients.  I watch with wonder at their ability to advise their client, negotiate the issues with the other side, and to understand when they are about to put their client in jeopardy.  They sense when the deal is about to go south.  They understand the consequences of not coming to an agreement.  When there are no attorneys present, the parties struggle with their personal wants and needs, principles, hurt, anger, and it becomes the role of the mediator to direct the conversation and discussion back to the issues.

Mediation is not about the law or what’s “fair”.   Mediation is about what the parties want as an outcome.  A lot like negotiation.

The point here to remember is that many of these mediations emanate from previous agreements.  The common thread of all mediations is the lack of communication about the consequences surrounding the agreement the parties have with the “other” party.  They include Landlord/Tenant, Insurance Companies, Credit Card Companies, Purchase Agreements, etc.

The more the parties focus on what they understood about the original agreement, the longer the conflict resolution process.  Getting stuck on a principle or a position, real or imagined, the more work for the mediatior to work the participant past it.  That’s why it’s so important to understand the original presentation of terms and conditions.  Did everyone buy in then, or were there unresolved issues?

So, when and if you can, give full negotiations a chance by offering to have the Buyer’s agent at the presentation (even telephonically) or asking to be present at the presentation of your offer as the Buyer’s agent.  You just might see an amazing uptick in successful agreements!

Happy house-selling!

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Kathy Howe