How Do Real Estate Agents Negotiate?

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Real estate agents obviously make a living from the commissions they get from home sales. This is one incentive for them to work hard. The other is that succeeding for clients creates a positive reputation for agents. Former clients might then spread the word to their family and friends, telling them that this particular agent really knows how to get things done.

 

In the real estate world, getting things done often comes down to negotiating better things for your clients. Buyers want low house prices, while sellers want high prices. There is clearly going to be a disconnect between the buyers’ agent and the sellers’ agent, or listing agent. The ideal goal would be to meet somewhere in the middle, and this is where negotiation can come in.

 

The many steps to buy a home often include hiring an agent to handle most of the confusing work for you. Therefore, buyers and sellers owe it to themselves to learn some of the negotiation methods agents might use to make things a bit fairer on everyone involved in a deal.

 

Escalation Clause

 

An escalation clause is a method that buyers’ agents can use to help clients win bidding wars. Put simply, an escalation clause tells a seller that a buyer will pay, for example, $5,000 over the highest offer received, but not more than a determined figure. The clause is designed to give that buyer an edge over everyone else who has submitted an offer.

 

Learning to Compromise

 

Agents for buyers and sellers can go back and forth over the little details of a real estate deal. Maybe the buyers want the roof fixed before purchasing the property, but the seller wants to move on from the house and isn’t interested in hiring roofers. The agents should be able to compromise in this regard. Maybe they can negotiate a credit whereby some money can be taken off the house price so the buyers can pay for the new roof themselves.

 

Real estate deals don’t have to be black and white. Not everyone will get everything they want in every situation. However, skilled real estate agents will be able to make a deal that both buyer and seller will accept.

 

Speaking in Person

 

This one isn’t too technical. If a buyer’s agent emails a listing agent to negotiate a price, some comments may be misconstrued, since tone is difficult to discern in the written word. Rather, a buyer’s agent should negotiate in person with a listing agent where possible. If this is not an option, a telephone is the next best thing.

The point here is that live interactions with other people are better for forming relationships than typed words. If a real estate agent plans to be in the business for long, it will become important to form relationships with others who have things you need. Sometimes, that human connection can come through in a bind. If negotiations have to take place, agents should speak to others in person to make the best case for their clients’ interests.

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