If people are expressing ideas and being creative do not permit any criticism of ideas on offer. All negotiations can benefit from non-judgemental creative thinking.
An ultimatum requires the other person to either surrender or fight it out. Neither outcome will assist in the negotiation or future cooperation.
Whether you’re an agent or a property manager, success comes down to how well the negotiation works. It’s a fine art but if done well can deliver real results for both you and the client. Here are some tips on what it takes to manage and lead a successful negotiation.
- Always be prepared
Firstly, do your homework. Know what outcome you want and why. If possible find out what outcome the other party wants/needs. Avoid negotiating when you are not prepared – ask for time to prepare if you need it. As part of your preparation, figure out what you will do if you are unable to come to an agreement with the other party/s. Power in negotiation develops from pre-prepared alternatives – the greater your ability to offer alternatives, or walk away, the stronger your bargaining position.
- Minimise differences
The way we see or understand something can be quite different from how the other person sees it. Do not assume you know what the other person is thinking or what their point of view may be. Ask questions so that you can gain a better understanding. It helps to reiterate your understanding so that it can be confirmed or corrected by the other person/s.
- Actively listen
Active, attentive listening is a must in an effective negotiation. Let the other person/s have an equal share of time to put their points of view across. (As a rule of thumb if you are talking more then 50% of the time you are probably not listening enough). In the negotiation process, respect silence. Silence can be as powerful as words. Silence also allows people to organise their thoughts before moving on. Don’t try to fill necessary silences with unnecessary chatter.
- Take notes
In any negotiation you need to know where you are at – what has been agreed to; what needs to be resolved. Take notes and always summarise and confirm agreement in writing (or via email).
- Be creative
During the negotiation be willing to set aside time to explore different or unusual solutions to the problem or negotiation. If people are expressing ideas and being creative do not permit any criticism of ideas on offer. All negotiations can benefit from non-judgemental creative thinking.
- Assist the other party/s
Great negotiators recognise that the problems of the other person/s are their problems too. Put yourself in the other person’s position and work to find a solution that meets everyone’s needs/wants. After all, no agreement will hold up unless all parties support the solution.
The basic principal to follow in any negotiation is to trade off what is a lesser importance to you but valuable to the other party. After all, what is valuable to you may not be so important to the other person/s. Avoid giving or gaining something for nothing. Goodwill or an obligation for future reward is a great trade off.
- Apologise if warranted
An apology (if warranted) is one of the quickest ways to defuse negative feelings or difficult people. An apology does not always mean a personal apology – it can be an apology for the situation, however a general apology can be just as effective in negotiations. Hostile remarks can add to hostility – it will take the discussion away from the issues and focus on personalities – the objective of the negotiation will then be destroyed.
- Avoid ultimatums
An ultimatum requires the other person to either surrender or fight it out. Neither outcome will assist in the negotiation or future cooperation. Ultimatums occur when you offer only two alternatives (instead of all possible solutions), with neither being acceptable or desirable to the other person/s.
- Set deadlines
Many negotiations continue to drag on because no deadline is set and agreed. A deadline requires both sides to commit to an outcome. It encourages all parties to ensure effective use of time during the negotiation process plus consideration of concessions or trade offs in order to meet the agreed deadline.
Confidence is key
Apart from these tips, confidence and good communications also have a major role to play, particularly when meeting face-to-face with your client.
With this in mind, always remember:
- The negotiation starts as soon as you meet all or any of the people involved.
- Even the introductions and small talk set the tone and are part of the negotiation – in your preparation decide on how to handle these initial conversations.
- Deal with any small issues first before you tackle the big issue of price. If you can gain concessions on small issues such as settlement date, leaving pot plants etc the other side (i.e. buyer) is more likely to offer concessions as well.
- Focus each person on the position, issues and objectives. Opening the lines of communications
Good communications is also critical in the negotiation process.
- It’s imperative you understand the buyer’s position so that it’s conveyed correctly
- Always make sure it’s simple and straightforward – emphasise major advantages of the offer
- Make it attractive by stressing the benefits of accepting the offer
- Use your market research and estimate of selling price to reinforce and emphasis the benefits
- Offer the opportunity to ask questions
- Encourage the seller to clarify all the terms and conditions of the offer
- Summarise the proposed offer
- Listen to and acknowledge counter offer – make sure you understand the counter offer
It will take time but with practice, these techniques will go a long way towards helping you get the end result you’re looking for – ie a listing or sale.
eLearning Centre: earn CPD points online
The ‘Gentle Art of Negotiation’ will be one of many CPD topics, which can be completed online at Kaplan Professional’s new eLearning Centre. Launched in NSW on 24 February, the new site will be rolled out Australia-wide by mid September.