Negotiation is a game!
It’s a ritual that is often part and parcel of purchasing a home. That said, new homes are not the same as second-hand homes and as such the game of negotiating can be very different but the rules work best in new homes.
Negotiating the best deal on a second hand home is generally played like this...
- The vendor selects the estate agent that promises to achieve the best price for their existing home
- They then put their house on the market above the valuation price because they are already expecting to receive an offer that is below the asking price (maybe even 5% to 10% below)
- An offer comes in and the vendor counters with “no”
- The buyer offers a bit more
- And then the deal is done - using the most unrewarding negotiating tactics ever - split the difference!
In new homes, it’s a different story.
We may have a clear margin that we are willing to use in order to craft a sale around a customer’s needs BUT we don’t have to use our margin at all and we certainly should NOT be using our margin to reward people for being nice! We’ve heard far too many versions of “I gave them flooring because they were so nice!” to count.
Don’t use your margin to reward ‘nice’ and certainly don’t use it to pay for your discomfort as a negotiator. Learn to be negotiation aware and tactical so that you and your customer enjoy the ritual of trading in the transaction and more importantly so you both come out happy!
So what kind of a negotiator are you? Do you play snap or poker?
Customers are educated, informed by many outlets and actively looking to establish the criteria that will lead to a final deal they are happy with. They will have read lots of advisory pieces and are highly likely to know they are expected to negotiate or to at least attempt to negotiate.
In new home sales, it’s vital to practice your negotiation game as it’s always better to be playing poker from the off! Too often, we see salespeople just playing ‘snap’ with customers’ needs. Then, when a sale appears possible, they try to upgrade their version of snap to poker but it’s too late; they’ve already shown their hand – incentives, offers, price adjustments!
Start off playing the right game, learn to keep your cards close to your chest, deflect customer attempts to negotiate until you really know their circumstances and what needs to be brought into play to make a sale happen.
When you have a real handle on the customer’s economics and circumstances, you know which home/home type you are selling them and that’s when negotiation starts. Everything up to that point is closing; agreeing what to buy, negotiation is agreeing how the purchase will be shaped.
Negotiation as a skill needs a lot of practice and as always, practice is not what you do with real customers so take time to actively learn how to play your best negotiation game. Snap means you will pay for your lack of skill or discomfort with your profit margin. Poker means you will be tactical and, in all likelihood, more successful.
Not only is your skill critical to your success so too is learning to adjust to negotiating behind the mask! COVID-19 has created a different face-to-face experience and one where we will need to learn to read the eyes!
When wearing masks, the visual and non-verbal clues we usually rely on in negotiation are lost. You can’t see a smile, the lip movements, the crinkle lines at the mouth’s edge or the cheek twitches that indicate approval or disapproval. These gestures that go with our eye cues are cut off and this has the danger of us focusing on opposing positions when in fact, if the timing of your negotiation is right, you both want the same outcome. It’s satisfying the interests of both parties that is the focus.
It’s always best to negotiate face-to-face and this is probably best now on a video call where you can see the customer and all the visual cues we use to negotiate.
To learn more about improving your negotiating skills and to make sure you are playing poker not snap, join Ellare for free today.