Warning: Big nerds here. We love to learn. We are always working to learn more about negotiations and negotiating for our clients. It is a never-ending process of learning and we love that. We found Chris Voss in 2017, hearing him speak at a conference, and immediately bought his book, Never Split the Difference. Great book! His Masterclass is excellent as well.
In real estate, it is important to learn and know when to use various negotiation tools, especially as an agent while representing clients. We think it is the most important part of our job. If you’ve ever hired an agent to work for you, did you notice how the agent negotiated how they would work with you, how they handled conversations around making an offer, or how they negotiated repairs. Did you feel like they did everything they could to get what you wanted? Now, this doesn’t mean you actually got it. Remember, there are two sides tugging on this rope.
Our secret (not really) and what Mr. Voss & his team teaches at his company, The Black Swan Group (how badass is that name?), is finding black swans. They define black swans as “game-changing pieces of information that you don’t know when entering a negotiation”. Listening and asking the right questions, then listening some more has helped us find black swans for clients.
One instance that played very well in our buyer-clients favor, especially in a crazy hot seller’s market where home prices are increasing daily and many parties are fighting over a single home and offering way over asking price to secure a home. In this instance, we asked what was important to the seller and we listened to help determine what items we needed to include or not in the offer. However, it was what the seller’s agent said after that in the conversation that helped us find a black swan.
Of course, there are times when you use every tool you can think of and you work every angle you can find and you still don’t get everything you want out of a negotiation. We use those time to look back and learn. Oftentimes, the client is still very happy and both parties go on their ways. Hindsight simply helps us be that much better moving forward. In this case, our buyer’s offer was selected out of multiple offers submitted.
As agents, there is a magic in asking certain questions to get clear on what your client is expecting, what their motivations are, and what they are willing to risk. In this particular market, buyers have been offering extremely high due diligence fees (this in in North Carolina), which the buyers lose if they walk away…high in terms of $5000, $10,000, and even $20,000…while also waiving inspections, appraisals, and offering way over ask (up to $50,000 on a $250,000 house…what???). Yes, it’s crazy.
So, back to the black swan that helped our clients win in these crazy multiple offer situations without risking too much. Things we knew…sellers were pushing price but would likely get it, multiple parties were offering, the sellers were absentee, the agent had done listing pre-work without seller help including having the property cleaned and potentially helping with an estate company for the furniture sale and removal. In having conversations with our clients, we could be very strategic in one very specific area that could be the kicker to get them selected.
Did you catch the black swan in that list?
You never know what another party is offering but you can bet they didn’t ask and pick up on the one thing that made our clients stand out above just throwing money at the sellers. In this case, our strategy was an offer that the agent would back and promote to the sellers…one that solved the headache and time of having to remove the furniture. Yep, even though the buyer conversations were all over the place when discussing an offer, knowing that they loved the home and that they were ready to make it theirs, it made it hard to not just throw money at the offered purchase price. Thankfully, they agreed that the strategic offer to purchase all of the furniture in lieu of throwing tens of thousands over the asking price was a good route to take and they made the offer. These become nerve-racking evenings while the sellers review all offers and make a decision on which buyers to work with. The buyers made a strong offer that promised a fairly carefree sale for the sellers AND their agent, we could only wait and see.
This was a very strategic offer to win the multiple offer situation. The buyers didn’t need or really want any of the furniture but knew it was an opportunity and could help them stand out in a different way than any other buyer simply offering more money. The black swan in this scenario helped our clients get their new home, the second home that we showed them and the first offer that they made. How many people have you talked to lately that are burned out because they have made 5/10/20 offers and have yet to win a contract on a home that likely had 5/10/20 offers. It’s a crazy time to buy but a great time to look for those black swans.
If you are in the market to buy or sell, make sure you interview your agent and get information on how they work and how strong their negotiating skills are. Maybe even throw a negotiation in the conversation and see if they catch it and how they handle it. It isn’t something taught in real estate school. Ask about experience, training, and examples of past negotiations they’ve had. You’ll quickly know who you want on your side and who you don’t. Feel free to reach out to us if you want a recommendation of an agent in your area that has these negotiation skills and can put them to work in your favor or if you are in the Lake Norman area of Charlotte, we’d be happy to meet to see if we are a good fit.
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