In 1990, General Motors (GM) brand Saturn revolutionized the car-buying experience with its introduction of “no-haggle” pricing. The basic idea: The sticker price on the window was the price of the car. Period. No high-pressure sales tactics. No math. No, “Let me talk to my manager.” No endless back-and-forth. It was a simple, beautiful, transparent process. Although GM killed the Saturn brand in 2009, their no-haggle legacy lives on. Why? Because negotiating is, quite frankly, no fun.
Can you imagine if the real estate world adopted no-haggle pricing? Would your relationships with clients improve? Would you sleep better at night? Would you approach your day with more confidence? Yes, yes, and yes. Of course, no-haggle is not the world we live in. Nevertheless, by learning how to better compromise, you can offer your clients a Saturn-like experience—and close more deals in the process.
Here are 7 tips to help you compromise like a pro:
Tip 1: Help Your Buyers Narrow Their Wants List
Most buyers know exactly what they want in a home. And many buyers want too much when compared to their budget, what’s currently available on the market, or both. To help reduce frustration, encourage your clients to divide their list of wants into three categories: Deal Breaker, Major Plus, and No Biggie. Help them understand that a long list of Deal Breakers will likely mean more time and money spent.
Tip 2: Practice Reflective Listening
What if your client is having trouble discerning wants from needs? You might be tempted to laugh out loud as they—with a straight face—tell you they want to close in three weeks on a four-bedroom smart home with a solar roof on six acres with horses within walking distance of a coffee shop in the best school district for less than $225,000.
Don’t laugh. Instead, reflect back what you just heard: “You’ve put a lot of thought into this! It sounds like you want to be in your new home as soon as possible, and you want it to be a great spot for your kids to learn and play. Also, efficiency and clean energy are important to you, you know what you can afford, and being near town is a plus. Do I have that right?”
The truth is, clients simply may not know when their expectations are unrealistic. By reflecting back what you just heard, you accomplish two things.
- You establish trust because your clients feel you “get” them. From that starting point, it’ll be much easier to say things like, “Is price more important? Or is the number of acres more important? Think on that for a while. I’ll do some research, but I have a hunch you’ll need to adjust one or the other.
- You tweak their expectations just a smidge. People often don’t know how unreasonable they sound until someone repeats what they just said. “Yeah, I guess if we have acreage we wouldn’t be able to walk to get coffee. I wasn’t thinking about that. So, let’s see if we can find a home with some property just outside of town.”
Tip 3: Know Your Stuff
Half of compromising is understanding what you’re compromising toward. In the case of our coffee-drinking-tree-hugging-budget-conscious-wanna-be-rancher-family-man, it would be helpful to know if such a property exists in your community (or in the universe, if we’re being honest). As a real estate professional, your job is to know your market inside and out—including upcoming trends that could meet or exceed your clients’ expectations.
Tip 4: Think Creatively
Let’s say you found an almost-perfect property for a client, but it only meets eight out of their nine Deal Breakers. Rather than focusing on what’s missing, play up additional features from their Major Plus list. “Okay, I found a place I think you’ll absolutely love. It doesn’t have that solar roof you were looking for, although you could add it later, given their low asking price. Plus, you won’t believe the weight room in this place. Oh, and there’s a treehouse, too. Your kids would love it. Want to have a look?”
Tip 5: Know What NOT to Compromise
If you’re listening well, you’ll know what your clients truly value—not just want they want. Be cautious about suggesting value-related compromises. There’s a difference between asking someone to consider a home with two, rather than three bathrooms, and asking them to consider a home in a failing school district. Again, it boils down to trust. If they sense you don’t understand what’s important to them, they won’t trust you. But if they do, you’ll be better equipped to encourage compromise.
Tip 6: Be Reasonable
Some buyers will ask you to low-ball an offer, assuming sellers will counter with a comfortable, meet-in-the-middle compromise. In our current, low-inventory market that’s simply not going to work; you’ll likely get laughed out of the room, and you’ll be back at square one with your client. Do some careful math, make fair and reasonable offers, and think strategically about other points of compromise: closing costs, home warranties, closing dates, home repairs, and so on.
Tip 7: Don’t Rush
As real estate professionals, we’re entrepreneurs—and to be successful we need to close as many deals as we can, as quickly as we can. However, while rushing your clients through the negotiation process might get you faster deals, it will also win you a reputation as a high-pressure agent. Realtors may not be able use Saturns’ no-haggle policy, but we can certainly learn from their no-pressure, relationship-driven model.
At Vegas One, we’re determined to offer the best customer service experience in the real estate industry. Find out how to join our team today.