As recent empty nesters, my wife and I placed our four-bedroom suburban colonial on the market – looking to downsize and get into a more urban setting. We hired a broker, made some cosmetic changes to the house so it would “show” well, and within a couple of weeks were fortunate to have a solid offer, with an agreed-upon price. The things that originally attracted us to the house – its location on a private drive off a cul-de-sac (meaning we could safely send our kids out to play), three acres of yard backing a nature preserve (privacy and beauty), and an active neighborhood (plenty of playmates for our kids) – seemed to resonate with our potential buyers.
As part of the buying process, the house was inspected. As expected, some minor repairs and updates were needed (the house is over 40 years old). Our buyers came back wanting us to drop the price. We felt we had priced the house fairly, including the anticipated repairs and updates. The brokers went into immediate negotiation mode, talking price concessions – a common mistake, not only with real estate agents, but with salespeople in general.
At this point, the real estate buyer becomes fixated on the negative aspects of the house, the minor repairs that need to be done. Not too dissimilar is the b-to-b buyer, who comes to the end of the buying journey looking for a price concession or a change in delivery terms. A seller’s first instinct is to negotiate when it should be to keep selling. The job of the salesperson is to “reframe” the buyer’s perspective away from the negative aspects they are consumed by, and remind them of the positive aspects the buyer has already agreed are valuable. Ask the buyer whether the positive aspects of the solution outweigh the negative (in the case of our home buyers, turning their focus to why they wanted the house in the first place). Classic value-oriented selling.
One of the best lessons I learned early in my sales career was that four criteria need to be in place before I can be ready to negotiate:
1. Have I tried to overcome the objections using the selling techniques shared above? Was I negotiating before I was done selling? This is the step that is typically missed – and separates true sellers from order takers.
2. If I could not overcome the objection, apart from that had the buyer and I agreed upon specific terms and conditions (e.g. what, when, price)?
3. Were all items open for negotiations on the table? (I don't want to settle on a price only to have the buyer begin negotiating delivery terms.)
4. Do we have a conditional agreement? Translation: If we can rectify the elements to be negotiated, do we have a deal?
Use these criteria with your sellers – not only will they help provide a leg up in negotiations, but ideally, they’ll help to avoid the need to negotiate in the first place.