When it comes to negotiations, there are certain tactics that work overtime. So we’ve compiled a list of some common real estate negotiation tips.
But before we dive in, we all know that price is not something that’s set in stone. And neither is a seller’s immediate inclination to work with or to not work with you, the real estate agent or investor.
They could call you ready to sell but a few days later lose interest. Or they could call skeptical and leave the call ready to sign.
Part of what determines these outcomes is how you negotiate with sellers and buyers: what you say, what questions you ask… even how you talk.
So we spoke with some experienced real estate investors and agents, asked them how they negotiate with sellers to close more (and more profitable) deals, then we threw in some of our own advice from decades of combined experience.
Keep reading to get the real estate negotiation tips!
Or you can download our real estate sales negotiation playbook by clicking below — it’s got proven-to-work scripts, six questions to ask on every call, and a fool-proof seller scoring system.
Get Your FREE Real Estate Negotiation Tips for Sellers + Scripts!
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The Pre-Negotiation: Base-Setting For The Verbal Negotiations
The first thing we’d like to mention — before we dive into the 10 tips that our three experts offered — is about what we call the pre-negotiation.
Before you get on a call with a seller for the first time, they have some preconceived notions about who you are, what you do, and what your business is like. They’ve gathered this information unknowingly through your offline marketing materials (direct mail, bandit signs, etc.) and your online marketing materials (your website and digital advertisements) and perhaps through referrals from a friend or family member.
Maybe, they come in thinking that you’re desperate for deals. Maybe, they come in thinking that you’re trustworthy and level-headed. Maybe they come in having no idea about what you do but curious about how you might be able to help them.
Whatever they believe, for better or worse, it’s a direct result of the brand you’ve created.
That’s why building a brand that’s well-respected in your community is so important. It makes sellers more likely to trust your opinions, value your input, and answer your questions honestly — which makes your job as a salesperson much easier.
But how do you set the stage for effective and profitable negotiations?
Here are some quick tips…
Add Credibility To Your Website — When someone visits your website, you want to build as much credibility as possible… as fast as possible.
This means including testimonials from past happy sellers, emphasizing the fact that you’re a local real estate investor, showing your online reviews, being honest about your process, and sharing your company’s vision and mission.
Video testimonials are particularly effective. Here’s an example from a Carrot member (Carrot websites provide a lot of space for adding credibility and, for that reason, are the highest-converting websites in the industry!)…
Set The Tone — With the colors, the words, and even the font you choose for your offline and online marketing materials, you’re creating a tone of voice for your brand. Maybe it’s stoic and professional.
Or maybe it’s casual and fun. Or maybe it’s kind and lighthearted. Or maybe it’s hasty and irreverent. Whatever the case, beware of the tone you create… because callers will expect that same tone of voice when speaking with you on the phone.
Be Honest — One of the best ways to differentiate yourself from the competition is to be upfront and honest. In fact, being dishonest will almost always backfire. It’s better to tell people who you help and how you can help them so that the right people dial your number in the first place.
1. Don’t Ask For a Price Right Away
This first tip comes from John Martinez, the founder of REI Sales Academy.
To avoid spending too much time talking to tire-kickers, a lot of real estate investors will ask the seller for their lowest price within the first five minutes of the call.
John recommends not doing that. In fact, he suggests that investors focus on price only after you’ve sold the seller on yourself and your business (more on that in the next tip).
First of all, once you’ve spoken to the seller about your process and build some trust, the number they gave you initially is probably going to change… so why use it at all?
Second, hearing a seller request a high price will usually make the salesperson (you or someone on your team) feel unmotivated to continue the call and they likely won’t operate at the same level of salesmanship.
So while it might sound counterintuitive, it’s best to leave the price for last.
2. Sell Them Before You Make an Offer
This tip also comes from John Martinez and it’s similar to the first tip… but about your offer.
You don’t want to hear the seller’s number until a little bit later in the call (as mentioned above) so that you have time to build trust before talking about price.
The other side of this coin is that you also don’t want to make an offer until you’ve built trust and sold them on yourself and your business.
The real lesson of these two tips is that you don’t want to talk about price until the seller trusts you — a discussion of price is virtually useless, and negotiations even more so if the seller doesn’t trust you.
Additionally, holding back the discussion of the price will give you more time to gather valuable information on why the seller is selling, what motivates them, and why they’re selling to you. That information, in turn, will give you “ammunition” for the price discussion…
“I know that price is lower than you were hoping for. But do you think it’s worth it to get out of your tough situation?”
3. Be Open & Honest
The more honest you can make the discussion between yourself and the seller — the more open they are to sharing pertinent information with you — the easier it’ll be to negotiate.
Have you ever negotiated with someone, for example, where it felt like there was no way you were going to come to an agreement… but you didn’t know why?
Like there was some big unseen brick wall between the two of you?
That’s usually because the seller hasn’t told you something — maybe they’re not the real decision-maker, maybe they need a certain amount of money to pay off additional debt, maybe they’re going through something that they haven’t shared, or maybe they’re too emotionally connected to the home.
Whatever the case, most of those hurdles can be overcome if they’re out in the open… if you’re able to discuss them with the seller honestly and with empathy for their situation.
Here are some of the questions that John recommends asking to pull out important (but potentially hidden) information…
- Ask the homeowner if they are able to hold the house for another 5+ years and what that will mean for them.
- Are they able to make the repairs themselves to resell at a higher price? And what will that look like for them?
- You’ll also want to address any concerns brought up by influencers – this includes the seller’s family, CPA, attorney, etc.
4. Allow The Seller To Squeeze Every Dollar Out Of You
Obviously, the seller wants to get as much money for their home as possible. And you want to pay as little for their home as possible.
So it might sound counter-intuitive — and again, this is advice from John Martinez — to allow the seller to squeeze every last dollar out of the deal.
But there’s a difference between getting hustled and allowing the seller to get as much money for their home as possible.
After all, the seller wants to feel like they’re getting a really good deal — like they’ve negotiated as far as possible and gotten the best offer that they can for their house.
For that reason, it’s a really bad idea to start with your max offer.
Instead, start by offering $20,000 or $30,000 lower than (depending on the value of the home) your max offer. Then if the seller balks, offer ways for them to increase their offer — maybe you give better deals to veterans or maybe they get a better deal if they move out faster or if they sign papers within 24 hours, or maybe they get a better deal if they clean out the home before moving.
“I can offer you an extra $10,000 if you sign the papers within 24 hours.”
“I can offer you an extra $5,000 if you clean out the home before you leave.”
This will give the seller room to feel like they’re negotiating with you and squeezing every last penny out of the deal when, in reality, you’re in control of negotiations the whole time.
5. Don’t Provide Options; Give Your Expert Recommendation
Maybe I’m alone in this, but I love when I go to a nice restaurant, ask for recommendations, and the waiter or waitress basically tells me what I should order.
Better yet is when I’ve gone to restaurants with tastings menus and I don’t have to make any decisions about what I’ll be eating.
I just get to trust the food experts.
Just like the seller gets to trust you, the real estate expert.
Maybe you have a “menu” of real estate services that you offer — buying for cash, selling on the MLS, listing homes, etc. But just because you offer all of those services doesn’t mean you should offer all of them to everyone.
In fact, you shouldn’t.
There is such a thing as having too many choices (think of the last time you and your significant other were trying to decide where to eat for dinner) and you don’t want to put the seller in that position, giving them “analysis paralysis”.
Instead, determine the service that would most benefit the seller and only offer that service to them (unless it later becomes clear that some other service would be more fitting).
You’re the expert, after all.
And they want to know your opinion about what they should “order”. Tell them your recommendation and leave your other services on the bench.
6. Extract Information
This next tip comes from Steve Trang, real estate investor, agent, and creator of “The Perfect Seller Appointment Scoring System“ (which you can get access to inside our free guide!).
In the last tip, we talked about offering the seller something that fits their specific situation.
But that’s not something you’ll be able to do until you’ve asked questions and extracted pertinent information.
This is your first goal on any call — to learn about the seller, why they called you, why they want to sell their home, what problems they’re facing, and how they think you can help.
The more you know about the situation, the easier it’ll be to work with them.
So ask a lot of questions.
Top performing salespeople ask questions more than they try to pitch or convince…
Here are some of the top questions you should ask sellers (you can get a full list inside of our free sales playbook!)…
- How are you hoping I can help you?
- This is a great home, why would you consider selling to an investor like me?
- Who else has input on the sale of your home?
- Who will be impacted by the sale of your home?
7. Set Rules
So far, we’ve talked a lot about building trust with the seller, being honest and transparent, and asking questions to understand where the seller is coming from.
But before any of that happens, Steve Trang recommends setting some “ground rules” for the discussion before the discussion begins — this will allow you to maintain control of the conversation and keep it progressing in a productive direction.
What does he mean by “ground rules”?
First, Steve will let the person know how the conversation is going to go and what they can expect. He’ll ask for their consent in continuing the conversation and he’ll also ask that they’re totally transparent with one another.
Here are a few of his rules…
- If I make you an offer, I ask that you’re comfortable with telling me “no” if the price doesn’t make sense.
- If you like the offer I make, then you agree that you’ll put it in writing.
- Saying you need “time to think about it” is against the rules. Instead, you can just tell me “no”.
Additionally, if the client gets off-topic during the conversation, Steve will ask them to pause and to write down everything they were going to say. Then he’ll ask a new question to progress the conversation.
This might seem intense.
But it’s an effective way for progressing the conversation and building respect. And if done right — with empathy and kindness — it can be extremely effective for closing deals.
8. Look For “No”
It probably sounds a little odd to try and get the seller to say “No” to you, but according to Jim Camp, the author of Start With No, that’s exactly what you should do.
Here’s how he explains it…
“‘no’ gets you past emotional issues and trivial issues to essential issues. We want decision-based negotiation, not the emotion-based waste of time known as win-win.”
“Embrace ‘no’ at every opportunity in a negotiation. Don’t fear the word, invite it. You do not take it as a personal rejection because you are not needy. You understand that every ‘no’ is reversible.”
When you allow the person to tell you “no”… when you try and get them to say “no”, you create opportunities to address their largest objections, to discuss the real worries and concerns that are stopping them from working with you.
You allow for progress to be made in the negotiations.
Price anchoring is just one example of this.
That’s when you intentionally make the seller a massively low-ball offer to find their bottom price — for a home you’re willing to pay $100,000 for, you might start by offering $40,000 or $50,000 just to see how they react…
“Oh heck no. I wouldn’t take a penny less than $80,000.”
Works like a charm.
9. Nail Your Branding
Branding is an important part of any marketing strategy.
Just check out some of these stats from Oberlo…
- 86% of consumers say that authenticity is a key factor when deciding what brands they like and support.
- 81% of consumers said they need to be able to trust the brand to buy from them.
- Using a signature color can increase brand recognition by 80%
- It takes about .05 seconds for people to form an opinion about your website.
- Consistent presentation of a brand has seen to increase revenue by 33%.
Now those stats are mostly referring to the e-commerce industry.
But if people care so much about working with authentic and trustworthy brands when they’re buying a pair of sneakers online, how much more do they care about it when they’re buying or selling a home?
Real estate amplifies the need for branding.
That doesn’t mean you have to build a super professional and formal website so that people will think you’re the bee’s knees — remember that authenticity is one of the key things people care about.
One of our favorite examples of authentic (and effective) branding comes from a Carrot member, Brian Rockwell — he’s an investor in Dallas and Fort Worth…
His homepage is clean, to-the-point, and semi-casual…
And his “Our Company” page takes the authenticity and personability to a whole new level, with a picture of him and his family and the company’s core values…
This might not be a direct negotiation tip, per se — but your online branding sets the tone for negotiations. It helps determine how much people trust you and see you as the expert before you speak with them. Obviously, that’s super important.
10. Use Scripts
If you’re an expert salesperson who knows your target market extremely well and you’ve been doing this for a long time, then maybe you don’t feel the need to use scripts.
But maybe you’re not a total expert yet… or maybe you’re leading a team of salespeople who still have some stuff to learn.
Either way, scripts can help.
We’re not saying that you should stick to scripts even when the conversation takes some unexpected turns — as a salesperson, you need to be adaptable — but it’s good to have a script in front of you. That will help you keep the conversation moving in the right direction if it gets off the rails.
And you can click below to get your free negotiation playbook & scripts — stolen straight from the desks of expert investors and agents ;-)
Get Your FREE Sales Negotiation Playbook & Scripts!
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11. Avoid Negative Statements
When you’re negotiating with a seller whose home is in distress, you might think that pointing out the problems you’re going to have to fix — smoke stains, broken windows, trashed lawn, etc. — will help the seller understand why your offer is what it is.
And to some degree, that’s true.
You do want to be honest with the seller about your costs so that they have more realistic expectations for what you can afford to offer them.
However, it’s important to be careful of how you bring those things up.
It’s very likely that the homeowner is attached to their property — maybe they inherited it from now-deceased parents or maybe they used to live there themselves.
Either way, there are emotions involved.
So instead of saying, “Look — your home is in really bad condition” or something similar, stick to the facts and avoid emotion: “We estimate that we’re going to spend about $XX,XXX to fix up the home. That’s why our offer is what it is.”
12. Trust The Follow-Up
As a salesperson, people are going to tell you “no”.
It’s bound to happen — and so it’s best to become comfortable with that word.
The good news, though, is that most deals happen during the follow-up process anyways — especially when you’re making low-ball offers.
People will say “no” initially because they’re surprised and upset. But then they’ll think about it. Maybe you send them a text message and an email or give them a phone call.
After a few months, they still haven’t sold their house on the MLS.
Now they’re ready to sell to you.
And if you’ve followed up consistently (say, a couple of times a month), then they know how to reach you.
Ryan Dossey once told us that he closes 90% of his deals during the follow-up process, not during the first phone call.
So follow up consistently and trust in the process — most of your deals are yet to come.
13. Learn to Blank Slate
This tip comes from Jim Camp’s great sales book: Start With No
In that book, Camp suggests that every salesperson, before entering into a negotiation, should “blank slate.”
Essentially, take a deep breath and let go of all opinions, biases, emotions, and pre-conceived notions about how the negotiations should go.
“Your ability to blank slate is directly related to your ability to rid yourself of expectations and assumptions, two very bad words in my system of negotiation.”
Because expectations and emotions add an unnecessary wild card to the negotiation table — if you’re too emotional, you might make a bad deal… if you’re frustrated from something that happened earlier, you might lose your patience… if you’re too opinionated and outspoken, you might miss out on getting vital information from the buyer or seller.
So before you negotiate, take a deep breath and remind yourself that you don’t need this deal and that you’re just going to see how things go.
There’ll be many more deals in the future.
14. Understand The Numbers
Of course, “blank slating” doesn’t equate to being unprepared.
Before you negotiate with a buyer or seller, you should know the details of the deal as well as possible — how long the person has owned the home, how much equity they have, why they want to sell, your max offer, how much it’ll cost to fix up, etc.
Those numbers are critical for the negotiations because they’ll help you negotiate.
If, for example, the seller asks for an explanation of why your offer is so low, you can explain the math to them.
If they shy away from your initial offer, knowing why they want to sell and/or how much equity they have can give you insight into their behavior.
So yes, you want to blank slate.
But you also want to be as prepared as possible.
15. Include an Escalation Clause
As a buyer’s agent, it’s important to be as efficient and effective as possible. Your clients don’t want to spend the next 6 months looking for a home…
They want to find one that fits their desires, put an offer down, and close the deal.
For the sake of keeping your clients happy, it’s in your interest to help give every offer they make a good chance at being accepted.
And that’s why you might consider including an escalation clause when the market is competitive — this basically says that if someone else offers more than your client’s offer, they’ll make a new offer that’s $5,000 or $10,000 more than the counter-offer.
Of course, you’ll want to clear this with your client first.
But it can be an effective way to help your clients secure a home.
16. Try To Meet in Person
Technology has made it super easy to “meet” with sellers.
You can text them, email them, or call them.
Heck — virtual wholesaling is now possible as well!
But still, nothing is quite as meaningful or powerful for negotiations as meeting in person — that is (and will always be) the quickest way to build rapport and show buyers or sellers that you value their time and respect them.
If you invest in a state where you don’t live, it might even be worth hiring a salesperson in that area to meet with sellers or buyers for you.
There’s a lot of power in face-to-face interactions.
So whenever possible, do negotiations in person.
17. Leverage Closing Costs
For both real estate investors and real estate agents, closing costs can be a useful asset during negotiations.
Since closing costs are immediate — and relatively expensive — they are something that many buyers and sellers would like to avoid.
As an investor, reminding people that you’re going to pay all closing costs can help push them over the edge. For example…
“I know that the offer is a little bit lower than you want, but keep in mind that I’m going to pay all closing costs for you — that would usually be somewhere around $10,000 — also keep in mind that I’m going to buy your house as-is and close in just a couple of weeks. Real estate agents aren’t able to do that.”
As a real estate agent, closing costs can be used during the negotiation phase between buyers and sellers to increase or decrease the total price of the home.
Buyers might offer to pay closing costs for a slight discount on the price of the home and sellers might offer to pay closing costs for a slight increase on the price of the home.
It’s an important negotiation tactic to keep in mind.
18. Use an Expiration Date
Expiration dates are an effective negotiation strategy for agents and investors to keep in their back pocket.
Agents can add expiration dates to offers or counter-offers to increase the speed with which the buyer or seller has to respond. And investors can use expiration dates to increase urgency around their cash offers…
“If you sign the papers within a week, then I’m willing to offer you $10,000 more. But you have to sign by Friday.”
For humans, urgency is a powerful motivator.
And offers without urgency offer result in people procrastinating on making a decision — or being wishy-washy with what they say.
That’s why expiration dates are so useful.
19. Use Affirmative Language
Salespeople with a positive outlook and attitude often achieve better results — so stick to the bright side as much as possible.
InPower Coaching offers the following examples of “affirming language”…
“I appreciate everything you have offered, especially [example concession they’ve made], and I’m glad you like [example concession I’ve made]. Would you be willing to include [request]?”
“I understand you’re wanting X, Y, Z, correct? If this is true, I’m happy we can give you X and Y, but unfortunately, we cannot do Z for [reason].”
Notice how those statements keep things optimistic?
That’s because when you stay optimistic — and when you treat problems, concerns, or objections as though they’re overshadowed by more important benefits (in attitude, not in words) — the person listening to you will often follow suit.
They’ll be more optimistic and they’ll start to see the value of what you’re offering.
So practice staying positive.
20. Use Storytelling
When someone has an objection, what do you say?
Imagine, for instance, that someone says, “Well how do I know that you’ll actually be able to close in two weeks?”
You could look them in the eye and say, “Trust me. I will.”
Maybe that’s persuasive enough.
Maybe it isn’t.
Another option is to get in the habit of telling stories to overcome objections.
Here’s an example.
If the seller says, “Well how do I know that you’ll actually be able to close in two weeks?” here’s how I could respond to that by telling a story…
“Funny you say that, actually. I was working with a homeowner last week who was in a real bind to sell. If he didn’t sell within two weeks, he ran the risk of getting his home repossessed by the bank. It was a huge mess. And reasonably, he asked me the same question. He said ‘How do I know you’ll close in time so I don’t lose my home?’ — I’ll tell you what I told him.
I’ve been working in this market for a long time now — I’ve helped buy and sell hundreds of homes — and never once have I missed a deadline. The service I offer sellers like yourself IS selling fast… and if I can’t do that… well then I don’t have much of a business, do I?“
That’s a lot more convincing than just asking someone to trust you.
So get in the habit of telling stories and your negotiations will be far more effective and lucrative.
At least part of your success as a real estate agent or investor depends on your ability to negotiate, which means communicating clearly, listening well, building trust, and even knowing when to walk away.
You can use the above 20 real estate negotiation tips to become a better negotiator.