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The Art Of Negotiation

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real estate negotiation strategiesIt is amazing how little negotiation training most real estate agents have and most of the training they do have comes from battle scars and previous negotiations. When it comes to negotiation in all sales there are two schools of thought.


Real estate is a zero-sum business. There are a fixed number of transactions every year in every market. Personal marketing and prospecting is a hunting expedition for those buyers and sellers. Every listing taken and every home sold reduces the balance available. That is why it is impossible mathematically for every agent in every market to become a high producer. It is simply a consequence of supply and demand. This should be a reality check and a warning to every agent. Become great at the skills essential for your success.

The Win/lose negotiation is, by its very nature, adversarial. There rarely are any long-term winners. If you want your business to be referral-based then beware... there will be none here.

The goal of win/win negotiation, on the other hand, is to reach an agreement that satisfies both parties. This includes the buyer/seller and the listing agent/buyer agent. In other words, everybody is happy and each side feels the other was fair. This is the holy grail of negotiation. Negotiation gets messy when trust becomes diminished.

A lack of trust does not necessarily infer dishonesty. More often it can come from a lack of preparation and a thorough understanding of the needs of the other parties. There is always a loss of authenticity when one appears incompetent or lucidly incoherent. So how can you improve your chances of achieving a win/win outcome? The answer is by knowing the type of person you are negotiating with. Knowing, or at least considering, his or her personality type can give you an honorable edge in negotiating. Let’s look at the four personality types we face in negotiating and understand their natural tendencies in negotiations.


These are extroverted people who need to direct traffic, need constant challenges and love to win. They believe winning isn’t everything, it’s the only thing. These people are direct and oriented toward the bottom line. They typically are win/lose style negotiators, but won’t usually acknowledge it. The best way to negotiate with this type of person is to go to the bottom line and work backward. Offer alternative choices and let them make their own decisions. Never attack their position, give facts in a logical flow and give them the perception of winning.


These people love to talk and interact. They are personable, want to be liked and make quick, impulsive decisions. They usually have a great sense of humor and are good team players. Third-party endorsements work best with this type of person. Quick tips for negotiation: Don’t bother them with the bottom line or facts and figures. Keep negotiations good-natured and light-hearted.


Keeping the peace and avoiding conflict is most important to these people. They are amiable, patient and relaxed. They usually are unemotional during negotiations, slow to decide and will look for a long-term relationship. The best negotiation approach here is to show genuine interest in them personally. Listen, be patient and take your time. Don’t do hard sells! COMPLIANTS need to know you will deliver on what you promise.


These are the perfectionists of the world. They are cautious, detailed, accurate and analytical with high standards. They want proof, facts, data and more data. Follow the rules with these people and avoid too much creativity. Be prepared with data and be direct with that data. To be successful with this type of person, it’s important for you to be organized and provide lots of detail. Go to the point and avoid small talk. They will tend to get stuck on a single point (usually price) and will want to win on that one issue only.


First, it is important you know what personality type you are. Then keep your eyes and ears open.

1. If you are dealing with an outgoing person with a neat freak aura then most likely he or she is a DOMINANT personality. Dominant personalities also tend to like cutting-edge technology and acquiring that technology.

2. Someone who is talkative with a relaxed, lived-in look and casual appearance will probably be a SOCIAL BUTTERFLY. They also like to be on the cutting edge of technology and like to buy things.

3. COMPLIANTS just want to do what’s right for everybody. They sometimes appear a little insecure. They are the clients who want to do the right thing and are generally slow to decide. But they are very loyal and will be a consistent referral resource.

4. ANALYSTS always will ask for more detail. They also will want to know how you arrived at your CMA for example. They are fact based.


The main point to remember during negotiations is it’s about the client, and their wants and needs. Do your prep work, recognize the types of people you’re dealing with, and have these tips in mind to keep negotiations positive and smooth (win/win!):

•Ask a lot of questions
•Don’t become emotionally involved
•Be totally prepared with clear factual details
•Treat people with friendship just as you would want to be treated

Strength and courage,

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