Tuesday, February 18, 2014

Tell Your Agent to Pick Up The Phone [Negotiation]

by Osman Parvez

I recently ran into a neighbor while walking Marley, the wonder pooch. Unbeknownst to me, she's been shopping for a condo. Recently she wrote an offer and lost in a bidding war. Kelly (not her real name) was visibly pained by the experience. 

Want to know why she lost? It wasn't the price. 

Kelly lost because her agent didn't understand the seller's needs, pure and simple. The successful buyer's agent took the time to do so -- she picked up the phone and talked to the listing agent.  

Verbal communication contains dozens, perhaps hundreds of cues. It's far more nuanced than written communication. The buyer's agent who structured her offer to meet the seller's needs and communicated that to the listing agent won the deal. Kelly later learned it cost the buyer a trivial amount of money.


I've been in the real estate business for a decade but prior to that, I worked for several investment firms and negotiated all sorts of transactions. I was involved in everything from IPOs to commercial aircraft purchases. The numbers were big, the deals were complicated. Many of these deals were in competitive environments.   Never - not ONCE - was negotiation initiated by submitting a written offer.   


I can't explain it. For some reason, agents in the Boulder area appear to be afraid to pick up the phone. Representing buyers, I can't tell you the number of times a listing agent has told me that I'm the only one who actually talked to her.   Representing sellers, I've received many offers without any verbal communication. Hell, not even a cover letter outlining the offer's strengths!  

Submitting a written offer without understanding a seller's needs is sheer lunacy. I can't imagine a worse tactic for a seller's market. It's outright incompetence.  
If your agent isn't skillfully negotiating for you, they're doing you a disservice.  

Negotiation 101
I love educating my clients, but I'm not about to give away my full arsenal of negotiation tactics. Many Boulder Realtors read this blog and I need to maintain my competitive advantage.  It's how I win bidding wars for my clients, and usually it's without going over asking.   

If you're a real estate agent reading this, there are all sorts of ways to improve your negotiation skills:

1) Start by reading books on negotiation (see my recommendations are below). 

2) You should also take Oliver Frascona's Certified Negotiation Expert course. It contains the core elements of Harvard's Executive course on Strategic Negotiation and it's fine tuned for real estate negotiation using the Colorado Real Estate Commission approved contract to buy and sell.   

3) Once you've done that, don't stop educating yourself. I read at least one negotiation book and attend at least one continuing education course on negotiation, every year. 

My clients are not a practice opportunity.

If you're a potential buyer or seller, interview potential agents before you hop in the car with them. Ask about their negotiation strategy and tactics. Ask about their experience, education, and how they'll handle the negotiation on your behalf.    

If you haven't already signed a buyer agency and would like to consider me as your agent, call me at 303.746.6896. I'd be happy to walk you through the contract and tell you about how I negotiate for my clients.

Osman's Recommended Books on Negotiation
The following books are a good foundation for building negotiation expertise. 

Influence: The Psychology of Persuasion by Robert B. Cialdini 

Secrets of Power Negotiating: Inside Secrets from a Master Negotiator by Roger Dawson  

Bargaining for Advantage: Negotiation Strategies for Reasonable People by G. Richard Shell 

Nonviolent Communication: A Language of Life by Marshall B. Rosenberg 


photo: woodleywonderworks
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Like this analysis?    Subscribe to my research.       Want to meet me in person?    Attend a Boulder Real Estate Meetup.    Ready to buy or sell?  Call me at 303.746.6896.  

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