Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

February 21st - 2014

Leave emotions out of negotiations

Negotiating in real estate can be difficult when emotions get in the way.

Businessmen arm wrestle to settle a dispute

Businessmen arm wrestle to settle a disputeNegotiating in real estate can be difficult when emotions get in the way.

Negotiation skills are vital in this line of work, and knowing how to stickhandle negotiations can determine your level of success, according to three experienced REALTORS®.

Although it’s natural for home owners to form a deep attachment to their dwelling, if you can get your client to step back and focus on the big picture, then the chances of a successful deal are greater, the sources say.

Collingwood REALTOR® Connie O'Shell remembers a deal a few years ago when the parties hit a stumbling block. Inside the home, displayed with some prominence, was a photo of the property 75 years earlier. The buyer wanted it but the seller was reluctant. O’Shell did not want a photo to jeopardize the whole deal. The picture was sold along with the house.

“It doesn’t always work that way,” says O’Shell, a 23-year real estate veteran. “When a seller excludes something, the buyer often wants it. I sometimes wonder if excluding an item makes it more appealing to buyers, but in my experience, inclusions and exclusions rarely make or break a deal.”

The ability to negotiate well can make the difference between a mediocre career and a successful one, says Mark Cadesky, an OREA instructor and Toronto REALTOR® of 20 years. “It’s not all about winning. Do what’s best for your client and try to keep emotions out of it.”

When teaching, he notices that some students possess natural negotiating skills: perhaps they come from a business background or are born with that ability. For others, it’s not so easy, but negotiating skills can be taught, Cadesky says. “Some people are really fast learners. It depends on whether the devotion is there, and whether they’re willing to work hard and check their egos at the door.”

That’s a sentiment echoed by Mike Stahls, an Orillia broker. Troubled negotiations can occur when clients – and in some cases REALTORS® – take things too personally, he says. Stahls recalls a situation where the home sellers were smokers. Even though they took steps to minimize the smoke smell in the home with air purifiers, the buyers submitted an offer conditional on the sellers covering any costs to remove the smell. The sellers were hurt.

“People get their backs up and feel upset. They take comments and criticisms personally,” says Stahls, who has 10 years of experience in the field. That’s when you should sit down with the clients and go over all options, he says. “I tell them the deal may not happen if they stick to their guns on what may be a minor point. I try to explain it to them well.”

If negotiations get really heated, Stahls suggests that the clients sleep on it, if time allows. The next morning, they are likely to be more calm and realistic. “People can get up in arms about things related to their home. It’s their biggest possession and it can hurt if someone picks it apart.”

Try to calm the situation, suggests Stahls. “A lot of our work now is consulting as much as selling.” And if negotiations are still too heated, you may need to walk away from the transaction. He recalls one deal he had that seemed close, but his client wouldn’t budge. In that situation, the obstacle proved too big. He advised his client as best he could, and then he let it go.

Both Cadesky and O’Shell agree with that approach. “All you can do is give your clients the facts,” says Cadesky. “At the end of the day, it’s up to them. We have to realize that sometimes it just doesn’t work out.”

The best business advice Cadesky ever received was not to get too attached to the results. “It’s not about you – it’s about your client. If you represent a buyer and the seller is stubborn about a price, give your buyer your opinion about the price and then let them decide. The last thing you should be thinking about is your own paycheque. If you concentrate on what’s best for your client, you’ll get repeat business and your paycheque will take care of itself.”

O’Shell concurs. “In my experience, if both REALTORS® work together, a deal can be negotiated. It’s easier, she admits, when you know the colleagues with whom you are working. But if both sides are willing to put themselves in the others’ shoes, the obstacles tend to disappear.

Handshake between businessmenAll three REALTORS® preach flexibility to their clients - to a point. Expectations must be realistic. “Sometimes it’s best to talk to your buyer about what they’re willing to pay or accept, and agree to walk away at a certain point,” Cadesky says. If it’s a multiple offer situation and you represent a buyer, ask them to settle on a price that won’t make them regret not offering more if they fail to get the property.

Flexibility is helpful in negotiating inclusions or exclusions. Chattels, including appliances, light fixtures or even window coverings, often come into play, Cadesky says. Sometimes, the bone of contention is a more substantial item such as a hot tub or furniture item. He’s even heard of some buyers asking for vehicles as part of a deal. He advises his clients to really reflect on how attached they are to certain possessions.

“Maybe they bought a washer-dryer set and it took time to pay off. Help them realize what it’s really worth. Has it depreciated in value? Is it going to stand in the way of selling the house?” The inclusion of a fridge or stove may represent a mere $2,000 discrepancy between offer and asking price, he notes.

A flexible attitude on something as simple as a closing date can reconcile the parties, says Stahls. “I look at the offer and if it’s a fair price, I ask, ‘What’s the problem?’

“Differences of opinion are common, and so our role is to help clients see the big picture,” adds Cadesky. “Sometimes we must extricate our clients from the emotional aspect of the deal. If they can end up in a house they really want and they’re comfortable with the price, the other issues don’t matter anymore.”

In the case of O’Shell’s negotiations that hinged on the 75-year-old picture of the property, the two REALTORS® were able to convince both the buyers and sellers that the matter wasn’t worth losing the deal. But you never know, O’Shell says. The house recently returned to the market and though it had been updated, the picture was nowhere to be found.

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