Black Belt Negotiating for Homebuyers

How would you like to save $10,000 or more off your next house? It's really quite easy if your real estate agent has a black belt in negotiating. The challenge is that most people in general and real estate agents in specific rarely take advantage of the power of bargaining, except on rare occasions when making large purchases like cars and houses. In other countries, like Asia, people there negotiate everything everyday and save thousands.

Negotiating is like a martial arts contest where power, leverage and timing can mean the difference between winning and losing. For instance, a martial artist would never go into a contest without first spying on his opponent to find weaknesses. In the same way, you can gain bargaining power by doing your homework. When buying a house find out how long it's been on the market, why the owner is selling, if there have been previous offers and if you will be the only one making an offer at this time. Obviously, finding the answers to questions like these could save you a lot of money.

First, make sure that your agent presents your offer in-person, if possible. It's very difficult to negotiate a good deal by fax.

Before engaging in contest, a martial artist warms up by stretching. Likewise, a savvy negotiator warms up by building rapport and finding common ground with the other party, because people like to do business with people they like. In real estate, a smart agent will try to get the seller emotionally involved with you before he brings out your offer. He should have you compose a hand-written letter about why you want the home and perhaps even show a few photos of you and your family. When faced with several competing offers I know of instances when a client's contract has been accepted even when it didn't present the highest price because the seller took a likeness to the buyers.

Next, fighters will cautiously probe each other looking for weaknesses. In bargaining this is done by throwing offers onto the table to see how the other party reacts. Experienced fighters often use guile to lure their opponents into range by pretending a blow has hurt them more than it really did. Similarly, your agent could pretend to be shocked by a seller's counter to your offer to get him to come down in price. Visibly showing surprise or hurt is called flinching and it used by master bargainers to gain concessions without giving up anything.

Martial artists are taught to read the body language of their opponents so they can see a blow before it is unleashed. Experienced negotiators can literally read the other party's mind by watching body language and listening carefully. If a seller says, "Make us an offer" you know their price is flexible before you even start. Also, without saying a word their body language can also tell you if they like or dislike any offer you make so be sure your agent watches very carefully as they show the seller your purchase contract. If the pupils of the owner's eyes get larger as they read the price you are well on your way to a deal but if his pupils get smaller your agent will have to do a lot of selling.

Martial artists do not believe in win-win and neither should you. Even when sparring with their best friend they want to give their best effort. Expect and demand your agent fight for the best deal possible assuming that the seller and his agent will take care of themselves because they will.

Fighters are supremely aware of time and try to use it to their advantage by saving as much energy as possible for the last few seconds of a round when they can score points against a tired opponent. Black belt negotiators put their opponents under time pressure by setting deadlines. Be sure that your agent mentions to the seller that you are considering several other similar properties in the area and that the seller must give a prompt response to your offer.

In martial arts, as in life, there are unfair fighters who will do anything to win, so you must protect yourself at all times. Negotiators must be aware of unfair tactics such as nibbling, which is asking for concessions after an agreement has been reached. If this happens to you just remember this blocking technique, "Before you give a concession - get a concession." For example, if a seller suggests that to hold the deal together that you'll have to pay for the transfer tax or other fee, simply respond with, "If we did, what can you do for us?" When a nibbler realizes that every time they ask for something you will respond in kind they will stop nibbling.

Finally, when a contest ends, fighters will bow to each other in mutual respect.  You should congratulate the seller for having done good deal  otherwise he might change his mind and try to find a way to wiggle out of the agreement.

So, how do you find a real estate agent who is a black bet in negotiating? Just ask these hypothetical questions and see how he or she answers them:

   1. What information do we need before making an offer and how would you get it?
   2. What's your experience with negotiating?
   3. What's your philosophy of negotiating? (If the answer is "win-win" find another agent!)
   4. Do you prefer to present offers in-person or send them in?
   5. How can we make sure the seller responds to our offer right away?
   6. When you sit down with the seller what's the first thing you do? (If the answer is "I pull out the contract" keep interview agents. You want someone who knows that closing a deal begins with building a relationship.)
   7. How can you tell if the seller immediately likes or dislikes our offer?
   8. How would you react if the seller gives us a full price counter-offer?
   9. What would you do if the seller asks for something additional after the contract has been signed?
  10. If the we were five hundred dollars apart from having a ratified contract what would you do? (If the answer is, "I'd give it to you from my commission" find another agent. Anyone who cannot negotiate their own fee will have difficulty protecting your interests.)

Steven Porter ABR CNE SRES
is a Real Estate Broker of 27 years with
RE/MAX Aboutowne Realty Corp. Brokerage.
Steven is an Accredited Buyer Representative,
Certified Negotiation Expert and has been student of
Japanese Martial Arts for 46 years
Steven can be reached at 905-875-2582, email: steven@stevenporter.ca
Or www.PorterRealEstateSystem.com

Literary credit to Michael Soon Lee

Realtors. Can we call ourselves professionals?

In recent years, from many quarters, concerns have been expressed about the continuing decline in professionalism. This includes medical doctors, lawyers, accountants, other professions and certainly Realtors, assuming that we who transact in real estate as agents for sellers and buyers could be considered as a profession in the first place. 

That all Realtors can legitimately call themselves “professional” is questionable, because many of the basic canons of a profession seem to be lacking. One only has to follow the blogs and opinion pieces in real estate publications to prove the point. The public is very cynical about this. Some place Realtors in the same category as used car salesmen and politicians. In the real estate industry there appears to be less focus by Realtors on the needs of clients and more on making that sale or getting that listing. It is suggested that many have forsaken their professional roots and regard their agency solely as a business, and professionalism is a lesser priority. This creates the need to inform the public more by deed than word that Realtors are indeed professionals. We as Realtors must demonstrate by high standards of ethical behaviour, service and conduct that we live up to the tenets of professionalism and the Codes of Ethics we and the public so often hear preached.

Professionalism is best described as a relationship between a person who has a high level of expertise and discipline in a chosen field and who is a member of an organized group of like-minded individuals with the same expertise and discipline in the same field, and the relationship they have with their clientele. The building blocks of professionalism are being well educated in the chosen discipline, integrity, honour, leadership, independence, pride, collegiality and service, all balanced with commercialism.

This includes the relationship between a Realtor and a client and the unwritten contract between the Realtor and society. An essential attribute is the ability to provide sound advice, competent service and to quote the medical profession, “Do no harm.” Real professionalism involves a pride in one’s work, a commitment to quality, a dedication to the interests of the client and a sincere desire to help. Professional success is about attitudes and about character. These are demonstrated by energy, drive, initiative, commitment, involvement, enthusiasm and the ability to provide sound advice.

Professionalism does not mean wearing a suit, carrying a briefcase, driving a high-priced automobile or always having your cell phone at the ready, just in case. Nor is it having a collection of meaningless (to the public) designations and diplomas, which many associations and commercial diploma mills are far too anxious to hand out. It is not one, but a combination of qualities; not a skill but a blending and integration of a variety of skills and attributes.

In real estate brokerage there are many very competent, very conscientious and very honest Realtors who could justifiably call themselves “professional”. They demonstrate all the mandatory characteristics just referred to. However, this is not the majority. In so many areas of the real estate brokerage industry commercialism and old-fashioned greed has taken over. To earn a good living is a common goal and a necessity, yet many are given over to avarice. Fundamental ethical behaviour, which often is in competition with increased revenue and profit, is losing.

Realtors win prizes and in-house recognition, not for doing a good job, not for advancing the acceptance of the industry, not for assisting the less knowledgeable or for high-quality professionalism, but for making the most sales, getting the most listings or earning the most commissions.

The real estate brokerage industry is a fractured commercial system comprised of largely poorly trained, ill-fitted candidates who were initially attracted by romantic notions of what selling real estate is all about and anticipation of high earnings, but for whom the starvation rate is high and the retention rate low. Although the pre-licensing courses have reduced the revolving door concept to a degree, the high failure rate persists. No other industry or profession would tolerate such seduction of the innocent and this waste of human resources as does the real estate brokerage industry.

There is a philosophy, not spoken about but certainly practiced by the real estate brokerages. If at the beginning of a fiscal quarter you hire 10 new sales agents and if at the end of the quarter two remain, your real estate brokerage has done well.

Professionalism must start with the Realtors themselves, insisting that all practitioners uphold the tenets of true professionalism and eliminate from their ranks those who do not. Until this occurs, acceptance by society will never be attained. The greatest challenge will be the elimination of unprofessional conduct from all unethical and incompetent Realtors. This is to consider the interests of real estate clients and the public as the No. 1 priority. This will demonstrate care and concern of the real estate client’s welfare in all of Realtors actions, not by giving only lip service or obtaining continuing education credits for having taken an ethics course, but a genuine commitment.

Inspired by an editorial by Lloyd R. Manning AACI, FRI, CCRA, PApp