Successful real estate transactions don’t just happen on their own. They result from a lot of hard work, patience, and, yes – negotiation skills.
Not everyone is born with the ability to be an expert negotiator, but that’s okay. Think of it as a muscle – once you build it, you can strengthen it over time with the proper care and attention. So whether you’re buying your first home, are investing in wholesale real estate, or are flipping a fixer-upper, there are certain tactics that you can depend on to help you significantly enhance your success in future transactions.
The Importance of Active Listening
The most important skill to have when negotiating a real estate transaction, especially in wholesale real estate, is active listening.
Active listening means that you’re making an effort not just to hear someone in a literal sense but to actually listen to them and take in what they have to say. This is one of the keys to understanding their needs in relation to your own, ultimately allowing you to find common ground.
Research Everything Before You Begin
Next, you’ll want to research virtually all transaction aspects before heading to the negotiation table. Again, this is especially important in terms of wholesale real estate, where you’ll be negotiating with two people instead of one. Here, you don’t just need to know what information a buyer is bringing with them. You must also be aware of the seller’s point of view.
To make sure that you’re prepared, you need to be informed about current and projected market conditions, for example. You should know as much as you can about the history of the property and aspects like the surrounding neighborhood. The more you know, the more negotiation leverage you have.
Patience is a Virtue
By its nature, any type of negotiation brings with it a certain amount of pressure. This is often the case for real estate transactions where time is of the essence. You don’t necessarily know who your competition is, and it’s likely that you’re not the only buyer or seller in the conversation.
But at the same time, you also need to maintain patience whenever possible. There’s nothing worse than making a rush decision under pressure only to quickly find out that you’re in a worse situation than the one you were in when you started. The more patient you can be, the more calm you usually are. That leads to informed choices that you can live with rather than rash decisions that you come to regret.
Why Empathy Matters
One quality that most expert negotiators share is an indelible sense of empathy. When you’re sitting at a negotiation table, it would be a mistake to see the person staring back at you as your “enemy” by default. Instead, they’re just like you – someone who wants nothing more than to leave the room happy. Just because they’re satisfied with the outcome doesn’t mean you can’t be, too.
Practicing empathy as early in the negotiation process as possible will build rapport with those you’re involved in. This will instill a deep sense of trust in the other party, which will move the entire deal closer to completion.
Don’t Forget About Your Leverage
To return to the topic of leverage, don’t let yourself assume that you have none, regardless of how difficult a negotiation may be. There will likely be situations where you feel like the other party is better at getting what they want than you are. It may, at points, seem like they’re better prepared or they’ve done more research. However, you still have what is likely the most important weapon of them all: The ability to walk away.
If the terms of a deal aren’t favorable to you and there’s no way to change that, leverage this as a negotiation tactic. Say that you’re going to walk away and, above all else, show the other side that you mean it. There’s absolutely nothing that says you have to accept a bad deal just because the other person “won” an argument.
Lean Into Win-Win Outcomes Whenever Possible
But speaking of winning, another negotiation tip that you can use for a successful real estate transaction involves focusing on win-win outcomes whenever possible. Just because you won doesn’t mean someone else must lose.
This point of view will serve you well in wholesale real estate, which depends heavily on long-term relationships for your overall success. You’ll need to be able to leverage the relationships you’re making with buyers and sellers today for potentially years to come. If you walk into a room today with fire in your eyes and want to do little more than “show everyone who is boss,” people are going to remember that. Then, the next time they sit across from the negotiation table with you, they’ll act accordingly.
This is if they’re even willing to negotiate with you again in the future at all.
Mastering the Art of Real Estate Negotiation: A Personalized Journey to Success
To conclude, one of the most important things for you to understand about real estate negotiating is that there is no “one size fits all” approach to what you’re doing. Yes, there are certain skills that will be universal – with your ability to understand your counterpart’s needs to coming into a scenario with as much information as possible being chief among them. But each transaction will also be unique unto itself, so you have to be able to take that ever-changing context into consideration before you begin.
You should also understand that nobody is an expert negotiator right out of the gate. This is especially true in the world of wholesale real estate, where you’re essentially in two negotiations at the same time. Through patience, perseverance, and a willingness to continually improve, you’ll get better over time until you finally have what you need to see things through to a favorable conclusion as often as possible.
