Negotiating Isn't Just About Winning
The Art of Creating Value
Ok, hear me out. I know everyone who is negotiating with contracts/pricing/deals wants to be seen as a savvy, winning negotiator. You may want people to see you as the bulldog at the negotiating table. But let’s pump the brakes on that. In the real estate world, negotiation is a daily occurrence, and if you’re operating locally (like most of us), you’re going to see those same agents and attorneys many, many more times. You and your clients are going to be better off if those folks don’t cringe when they see you coming. Unfortunately, many people approach negotiation with a mindset of "win-lose." They believe that in order to come out on top, they have to dominate the other party and extract as much value as possible. This approach can be counterproductive and damage relationships. Now, I’m also not saying you got to give away the farm so that people will like you. Let’s look at the nuance.
A more effective and sustainable approach to negotiation is to focus on creating value for all parties involved. This means finding solutions that benefit both sides and building relationships that can lead to future opportunities.
The Benefits of Value-Based Negotiation
Builds Relationships: When you approach negotiation with a collaborative mindset, you're more likely to build strong relationships with the other party. These relationships can be invaluable in the long run. When you have a client in a bind and really need another local agent to throw you a bone, it’s nice for them to know that you’re the type of agent that will help them out in a pinch, as well.
Creates Win-Win Outcomes: Value-based negotiation allows you to find solutions that benefit both sides. This can lead to more satisfying outcomes for everyone involved. At the end of the day, you’re gonna feel the most successful when all parties walk away feeling like they got a win.
Enhances Reputation: A reputation for being a fair and collaborative negotiator can attract more clients and business opportunities. Your name and reputation are everything in my business and I’m sure that goes for yours as well. Don’t make yourself look like a pain to deal with.
Reduces Stress: Negotiating with a focus on creating value can be less stressful than a competitive approach. Feel good and bring others value. As the saying goes, it’s just good business.
Key Strategies for Value-Based Negotiation
Active Listening: Pay close attention to what the other party is saying. Understand their needs, wants, and concerns.
Empathy: Put yourself in the other party's shoes. Try to see things from their perspective. It might explain something you see as “stubborn.”
Open Communication: Be open and honest about your needs and expectations. Avoid making assumptions or playing games.
Flexibility: Be willing to compromise and find creative solutions. Like I said, you want everyone to feel like they got the win.
Focus on Shared Interests: Identify the common ground between you and the other party. This can help you find mutually beneficial solutions. It’s not cheating to present yourself as a likable person that the other “side” wants to make concessions for.
Client Non-negotiables
Let's be real. Sometimes we have clients or goals that include things that are non-negotiable. Everyone has to know their line and their limits. Know when it’s time to shake hands, wish everyone well, and walk away. Not every negotiation is meant to result in a closed deal and that’s ok. The important thing in these situations is not to be reckless and burn bridges because a deal couldn’t be met. Everyone has their standards and their reasoning–even if they don’t make the most sense to you. When we can’t reach a compromise, we live to deal another day.
The Importance of Preparation
Finally, I want to stress that preparation is key to successful negotiation. Before entering a negotiation, do your research and gather all the necessary information. This will give you a strong foundation to work from. If you don’t do your homework, you’re going to look ill-prepared and you’re likely going to miss something crucial—and your client won’t be happy about it. And we want you to get repeat business. But even if nothing goes wrong, negotiating from a place of preparedness just feels better. You’re more confident and you know you’re getting the most for your client.
Conclusion
So once again, negotiating isn't just about winning. Well, it kind of is–it’s about making sure everybody wins. It's about finding creative solutions that benefit all parties involved. By adopting a value-based approach, you can build stronger relationships, create more satisfying outcomes, and enhance your reputation as a fair and collaborative negotiator. You’ll get repeat business. People will enjoy working with you. I hope you find this helpful–especially if you’ve been burdened by the need to be a bulldog or the need to be everyone’s best friend. Approach the table prepared and in good faith, and you’ll do alright. As always, Jeff Cook Real Estate is always looking to expand our team with like-minded individuals who share our values and passions. If that’s you, visit us at joinjcre.com and we’ll speak soon.