Build Your Business like a Real Estate Agent!
From this TERRIFIC Site you can learn how to build an Agent Business. We build a REI Business the same way!
When Should I Hire an Assistant?
When should I hire an assistant? How should I train them? What should
they do for me? These are questions I get asked every time I coach a
new client or speak before a group of realtors. Assistants can be an
important addition to a realtor’s business. Hiring an assistant can
also be one of the most frustrating experiences and financially
challenging times in business.
Creating a Team
Because of the increase in required disclosures, inspections, and
documents, it is becoming more difficult for an agent to do all the
functions of real estate on his own. The need to create a team of
specialists is becoming more necessary for success in the real estate
field. The three main reasons to create a team are better quality
service for your clients, increase in production, and increase in
quality of life.
Help Your Staff to Climb the Learning Curve
Assistants have become more of the norm rather than the exception for
agents heading into the new millenium. The question is are they truly a
profit center for the agent?
Determining the Pay Structure for Buyers' Agents
Check your pay and profit structure for your buyer’s assistants. Make
sure they are the profit center that you think they are. You may be
surprised by the results.
There's Gold in Them Leads!
Creating an effective lead follow-up system can be the backbone to a
consistent real estate sales business. The more effectively you handle
the leads you generate, the more production you will achieve.
Power Recruiting
A broker who successfully recruits provides an exciting work
environment for agents. Existing agents are stimulated by meeting and
working with new people. New agents create new competition within the
"pecking order" for listings and sales.
Creating a Dynamic Listing Presentation
The listing presentation is one of the most misunderstood areas of real
estate sales. There are as many theories about this presentation as
there are licensed agents in North America.
Brian
Gibbons
Owner and REI Coach since 1986
REISkills.com
Agency issues are a legal hotbed for real estate -NAR legal study finds many industry lawsuits relate to commission disputesMonday, June 18, 2007By Glenn Roberts Jr. Inman News |
Commission disputes, property-condition disclosure and agency issues are the most common source of lawsuits for the real estate industry, according to a report prepared for the National Association of Realtors trade group.
The 2007 Legal Scan also found that cases involving fraud and deceptive practices, breach of fiduciary duty and breach of contract were the source of the most damage awards.
Report findings are based on an analysis of 655 lawsuits and jury-verdict reports. Commission disputes were at the center of 153 of the cases, compared with 132 cases relating to property-condition disclosure and 100 relating to agency issues.
The most costly damage award stemmed from a sexual harassment lawsuit filed by the former employee of a Rapid City, S.D., property management firm against that company, Barker & Little Inc., and owner Douglas Hamilton. The employee was awarded $4.16 million in that case.
Other costly damage awards related to a case in which the highest bid on a property was not accepted and a case in which an agent was terminated and alleged that she was denied access to her client lists.
In most of the cases studied, the real estate agent or broker was not found to be liable, according to the report. Of the 319 cases ending with a judgment on the real estate professional's liability, 210 cases (66 percent) were resolved favorably to the real estate professional and 159 of those cases (50 percent) did not require a trial, the report states.
The agent or broker was found liable in 109 of the cases (34 percent) that had a determination of liability, and damages were awarded in 93 cases. Twenty-eight of the damage awards were between $100,000 and $499,999; 26 were between $10,000 and $49,999; 16 were between $50,000 and $99,999; 14 were under $10,000; and eight were between $1 million and $4.99 million.
About 19 percent of the cases involving damages were in California, followed by 7 percent in Texas and 6 percent in Connecticut.
The study found that 22 cases were settled, and the largest settlement -- at $2 million -- related to a defamation lawsuit filed by a former agent of a RE/MAX office after she was fired from that office.
When compared to an earlier survey in 2005, the 2007 report found a large increase in the number of fair-housing lawsuits relating to handicap discrimination, which increased from 24 cases in 2005 to 55 in the 2007 report, and race discrimination, which increased from 24 cases in the 2005 report to 55 cases in the 2007 report.
In all, the latest legal report identified 184 cases relating to fair housing, "but when cases involving rental properties were disregarded (they are in a separate Real Estate Management survey), there were 73 fair housing cases," which represents a decline from the 110 nonrental property cases in 2005, the report states.
There were 25 breach-of-contract cases identified in the latest study, compared with 50 in 2005, and the report noted a decline from 84 to 66 in the number of deceptive trade practices and fraud cases, and a decline from 35 cases in 2005 to 25 cases in the 2007 study relating to alleged illegal kickbacks under federal real estate law.
The number of legal cases relating to third-party liability increased from 13 in the 2005 study to 32 in the latest study, while the number of cases relating to employment issues rose from 42 to 54 and the number of antitrust-related cases jumped from 10 in 2005 to 19 in the 2007 study.
This rise in antitrust cases related to a rise in cases over alleged illegal tying agreements from one case in 2005 to eight in the 2007 study. A tying agreement may require that one service must be purchased as a precondition to obtain another service, for example, and not all tying agreements are illegal.
The study also focused on real estate-related issues addressed by statues and regulations. About 47 regulations or statutes identified in the study related to privacy aspects of technology, compared to two for this category in the 2005 report.
Meanwhile, the number of statutes and regulations relating to anti-solicitation laws dropped from 60 in 2005 to 22 in the latest report.
Regulatory action relating to minimum-service agreements -- which have been controversial because of opposition to some of these measures by consumer groups and the U.S. Federal Trade Commission and U.S. Justice Department -- are on the rise, totaling 13 in the 2007 report. No minimum-service regulatory measures were reported in the 2005 study.
The number of regulations relating to buyer representation and environmental disclosure also rose significantly since the 2005 study.
A survey of 224 real estate professionals asked respondents to rate the significance of a range of real estate issues, whether the issue was likely to increase in importance over the next two years, and whether further training about the issue is needed.
"Agency issues are the dominant theme," the report states. "Not only are they a significant source of litigation, legislation and regulation, they are also cited by the survey respondents as an important source of legal exposure."
About 32 percent of respondents said that agency issues are "a significant source of current disputes," and identified agency issues such as breach of fiduciary duty, dual agency, agency disclosure and minimum-service agreements as "particularly significant."
About 40 percent of respondents ranked eight of the agency issues identified in the top three, and six of those issues top the list, the survey found.
Commission disputes and the disclosure of structural defects also ranked high as current issues.
One respondent stated, "Dual agency, particularly single-agent dual agency, remains a bull's-eye on our backs," referring to a practice that is allowed in some states in which a single agent can represent both a buyer and seller in the same real estate transaction.
About 39 percent of survey participants stated that kickbacks are significant sources of current disputes, while 36 percent said affiliated business arrangements are significant. And about 54 percent believe that issues relating to disclosure of settlement costs are "moderately significant."
These issues all related to the federal Real Estate Settlement Procedures Act, a federal act that defines permissible and illegal real estate practices.
Agency and RESPA issues are most likely to increase in significance over the next two years, survey participants said, and also cited technology, third-party liability and disclosure as important issues.
Minimum-service agreements, breach of fiduciary duty, buyer representation, dual agency, agency disclosure and transactional representation/non-agency representation were picked by respondents, in that order, as the most likely to be future problem areas.
And RESPA-related issues are also "likely to increase in importance as well, according to the survey respondents," the report states.
Agency issues rank high on the list of significant training needs, the report states, along with RESPA, technology and antitrust issues, and disclosure issues including meth labs, mold, valuation and structural defects. Commission disputes and procuring cause also rank high on the list of training needs, the report states.
Other areas that ranked high in training needs include: race discrimination and national origin discrimination, deceptive trade practices and fraud, flipping, "as-is" clauses, frivolous lawsuits, affinity groups, licensing, professional liability, breach of contract, and personal assistants.
The report is available to National Association of Realtors members. A summary is available at the Realtor.org Web site.
See below:
-------------------------------------------------------------------------------------------------------------
|
For more information, contact:
|
|
Iverson Moore,
    202/383-1290 , imoore@realtors.org |
|
Realtors® Release Latest Legal Liability Survey
|
|
WASHINGTON, June 14, 2007 -
The
National Association of Realtors® has just released the results of the
most comprehensive study to date of legal issues and trends in the real
estate industry. “This latest legal scan is our crystal ball to a better understanding of key legal issues and trends affecting the real estate marketplace, and gives a wealth of information on agent and broker liability,” said NAR’s General Counsel Laurie Janik. “The study covers issues including agency, fair housing and disclosure laws, and will help members better understand and plan for legal pitfalls and compliance requirements they may encounter.” The complete study has been published electronically on NAR’s member Web site and is available at no charge to NAR members. The survey was prepared for NAR’s legal department with assistance from Legal Research Center Inc. of Minneapolis, a leading legal research provider. The newly updated study, which will help Realtors® reduce legal costs, is the sixth in a series dating back to 1996, and tracks historical data regarding 86 legal liability issues faced by real estate professionals. “This updated survey allows members to quickly check and print out for their attorneys the relevant cases or legislative actions that offer guidance regarding new cases and will help members save time and money on legal costs,” Janik said. Some key findings of the survey include the following: Agency issues are among the most common types of real estate legal dispute. Another major area of disputes is that of property condition disclosure, especially mold and structural defects. Technology issues are growing in importance, especially with respect to privacy, spam and other forms of electronic solicitation. Subject areas where future training will be vital include agency, disclosure, technology, antitrust, and real estate settlement procedures. In addition to the basic survey, NAR, in partnership with its affiliated Institute for Real Estate Management, has also published a survey of legal issues specific to real estate management. The principal areas of concern in the property management area include debt collection, accident claims, liability for tenants’ property conditions and conditions of common areas, and events occurring on managed properties. The 2007 IREM Scan is also available online. Nearly 60 percent of cases involved premises liability, including falls and other injuries. In 70 percent of cases with liability, real estate property managers were held not liable; 75 percent of these favorable outcomes did not require a trial. Other important liability issues include new requirements for carbon monoxide detection and window guards, as well as issues of lead, mold and problems associated with presence of laboratories capable of producing methamphetamine. Increased emphasis will be placed on fair housing aspects of property management in the future. IREM represents 18,000 real estate management professionals who collectively manage property valued at more than $848 billion. The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries. |
 |
Order-taking is deadPart 1 of 6: Secrets of powerful negotiationFriday, April 20, 2007By Bernice Ross Inman News |
|||
(This is Part 1 of a six-part series. Read Part 2, Part 3, Part 4, Part 5 and Part 6.)
Order-taking is dead. If you want to prosper in today's market, negotiation is the key to prospering while your competitors starve.
During 2005 and 2006, I remember being shocked to learn that many agents across the country had sold substantial amounts of property without ever going on a physical inspection or dealing with a loan contingency. The buying frenzy was so great that buyers waived all the contingencies in order to purchase.
Those days are gone. With the collapse of the subprime market and a decline in the number of transactions nationally, negotiation skills are a key factor in determining whether an agent will survive in today's shifting market. If you want to prosper while those around you are floundering, becoming a master of negotiation is the route to consistent high production, regardless of the market conditions.
1. WAIT! (Why am I talking?)
There is an old adage in sales circles that the first one who speaks loses. When buyers are jittery, it's easy to scare them off. The easiest way to do it is to open your mouth. For example, you may point out the lovely chandelier in the entry. If the buyers think it's ugly, the buyers' focus shifts to how much it's going to cost to change it. By drawing attention to this feature, you have just created a major objection that could block your sale. Consequently, the first rule in negotiation is to always ask, "Why am I talking?" Another consistent mistake poor negotiators make is that they begin negotiating with themselves rather than waiting to hear what the client has to say. For example, when an agent has to present a low offer, many agents are apologetic or even worse, defensive. When the agent opens his or her mouth and complains about the price, the sellers will follow suit, even though the price may have been acceptable. Putting it a little differently, keep your opinions to yourself. If you're talking, you may be losing business.
2. Sell benefits, not features
When a buyer purchases a primary residence, they're not buying a house. Instead, they're buying the emotional benefits attached to home ownership. Consequently, focusing on the physical characteristics of the property -- such as the bedroom-bath count, type of kitchen, size of yard, etc. -- is the poorest way to motivate a buyer to take action. A better strategy is to focus on the benefits of the home-ownership experience. For example, a large backyard is a feature. A benefit is the emotional value the feature has. In the case of someone who likes to garden, a large yard offers the opportunity to spend many enjoyable hours engaging in a favorite hobby. For parents, a large yard can be the safe haven where their children play under their watchful eye. In contrast, for a homeowner who travels frequently, a large yard may be a maintenance headache requiring expensive gardening services. The only way to identify what constitutes a benefit to your clients is to take the time to discover how they live, what they like to do, and what matters most to them.
3. Humor diffuses tension
A "pattern interrupt" is a neurolinguistic programming technique used to defuse volatile situations. A pattern interrupt can help you regain control of the negotiation when things are spiraling out of control. For example, if one or more people start shouting during a tense negotiation, do a pattern interrupt by coughing and asking for a drink of water. (Be sure to ask the person who is shouting the loudest to get it for you.) The idea is that by changing the person's body position, you can also change the energy at the negotiation table. A number of years ago, one of my best lender clients had an REO (foreclosed property) listing in ritzy Bel Air, Calif., that we couldn't sell. The market was abysmal, with almost 60 months of inventory in this particular price range. After extensive marketing, we finally received an offer that was 40 percent below the lender's foreclosure price. I set up the appointment with the senior VP and trudged over to discuss the offer. Imagine my chagrin when I was ushered into the conference room and the entire board of Directors was there. At that point, I wanted to run as fast as my 3-inch heels would carry me. Instead, I backed into the room and looked over my shoulder at the board. When they wanted to know what I was doing, I replied, "I figured I better be ready to run away fast when you see what this offer is." Everyone laughed. They didn't sell the house to this buyer, but they did give me a price reduction that lead to a successful sale.
---------------
Friday, April 27, 2007 (This is Part 2 of a six-part series. Read Part 1, Part 3, Part 4, Part 5 and Part 6.) Good negotiation skills are akin to having a Global Positioning
System, or GPS, in your car. Having them will take you where you want
to go. Without them, you will be hopelessly lost in today's highly
competitive, slowing market. Last week's article looked at three different approaches to
negotiating more effectively. Today's article examines three critical
mistakes that poor or inexperienced negotiators make. 4. Don't be a White Knight A major mistake many inexperienced negotiators make is negotiating
as if they were one of the principals. A classic example is the agent
who says, "I'm not going to let my sellers take a price that low!" This
is known as the "White Knight Syndrome." I remember dealing with a listing agent who was notorious for
wanting to control all aspects of the transaction. I cringed when my
buyers wanted to place an offer on his listing. Prior to the offer
presentation, I explained that my buyers wanted me to watch how the
sellers responded to their offer. They were particularly hoping that
neither agent speak until the sellers responded. (This goes back to the
principle that "the first one who speaks loses.") The strategy worked.
I was able to present the offer without interruption. Furthermore, the
sellers agreed to the price that their listing agent later told me,
"that I would never have let them take." 5. How much will the seller take? A major negotiation error that could cost you both your license and
thousands in litigation fees is to represent that the seller will take
less than the asking price for the property. When someone asks you what
the seller will take, there is only one correct answer: the asking
price. If the person persists, respond by saying, "The only way to know
for sure is to write an offer." One agent made a major blunder when she
told a reporter from a major newspaper her seller would take $500,000
less than the asking price on a $2.3 million listing. The seller sued
her and her firm and won a huge settlement. The point is that even if
the seller tells you that he or she will take less, the only way you
can discuss it is if you have a written price reduction. 6. Stupid broker tricks Smart negotiators never discuss the terms of any other offer that
the sellers may have received. Because people don't like having their
offer "shopped around," discussing the terms of competing offers can
cost you the transaction. Assume, however, that you represent the buyer
and you would really like to know what those other offers actually
were. A question that many sophisticated negotiators will ask is, "How
much have the sellers turned down?" A large majority of agents will
answer the question. The correct answer, said with a smile in your
voice is, "You know I can't discuss the terms of other offers. If your
clients are interested, writing an offer is the best way to determine
what they will take." Asking this question poses two hurdles to
negotiating the deal. First, the sellers' circumstances may have
changed and they may be more willing to take a lower offer.
Consequently, what they turned down in the past may be acceptable
today. Second, by asking this question and conveying the answer to your
buyers, you may cause your buyers to overpay or not to write an offer
at all. For example, if your buyers can afford a top price of $375,000 and
the sellers turned down an offer of $400,000 three months ago, most
buyers will elect not to write the offer. If the seller is facing a job
transfer, a foreclosure or needs the money for some other reason, they
may be willing to take your clients' offer. Timing, rather than money,
may be the issue. Inquiring only about what the seller will take
doesn't address these other issues. Whenever possible prior to writing
an offer, do your best to discover what the sellers' motivation is for
selling their property. A seller who is facing payments on the current
home plus a new home will be much more motivated than the seller who
has no payments and can move whenever he or she elects to move. Improving your negotiation skills requires having the right
language. Watch for next week's article to learn how to avoid the
language that can undermine your negotiation success. ----------------- Friday, May 04, 2007 (This is Part 3 of a six-part series. Read Part 1, Part 2, Part 4, Part 5 and Part 6.) Powerful negotiators know how to survive in any market. Do you have the necessary skills to cope with today's shifting market? Parts one and two of this series looked at many of the common
mistakes that poor negotiators make. The next two weeks will be devoted
to identifying the language that can undermine your negotiation
success. 4. Don't ever describe any buyer or seller in derogatory terms This seems obvious, but it's common for agents to refer to buyers
who make low offers as "lowballers," "bottom-feeders," "chiselers" and
other unflattering terms. It's also common for agents to refer to
sellers as being "greedy" or "stupid" when the sellers insist on
overpricing their property. Making these types of remarks about your
client or another agent's client only reflects badly on you. It also
sets up a difficult negotiation situation because once you place a
negative label on a client, you have to overcome the negative label as
well. For example, if your buyers purchase a property where you called
the seller "greedy" and the seller refuses to do some of the
unreasonable repairs that the buyers may request, then your buyers are
much more likely to become angry. Furthermore, you can be confident
that your buyers will parrot back to you how greedy the sellers are by
not responding to their request. In fact, it could cost you the
transaction. Remember, when it comes to negotiation, your mother was
right. "If you can't say something nice, don't say anything at all." 5. Substitute factual descriptions for emotionally charged words One of the greatest challenges you will face in a slowing market is
to decide how you will approach sellers when you have a low offer. The
following script is one that works almost every time: Mr. and Mrs. Seller, I would have liked nothing better than to
have brought you a full-price offer. That would make my job very easy.
Instead, my clients have elected to make an offer that is substantially
below your asking price. About 50 percent of the time, we can put these
offers together. I would like to ask that you give me a counteroffer in
order to determine whether this offer will be part of the 50 percent
that will actually sell. 6. Don't get mad -- get even! Every so often, sellers may become so angry at a low offer that they
are ready to cancel your listing, even if you aren't responsible for
the low offer. If the sellers are so irate that there is no way they
will do a transaction with the buyer, here's a script that normally
defuses the situation. Mr. and Mrs. Seller, there are three ways to handle this
situation. You can elect not to make a counteroffer or you can counter
at full price. If you are so angry that you don't want to have anything
to do with this buyer, however, you could write a counteroffer over
asking price. I have used this script many times and had two sellers who did
counter over asking price. What began as a very volatile situation
became something that gave the sellers a sense of power. "We sure
showed those buyers!" Furthermore, instead of feeling frustrated over
not selling, the sellers actually were laughing. It had never occurred
to them that if someone was unrealistically low they could make a
counteroffer that was unrealistically high. 7. Shift from "I" language to "you" language When you use the word "I," the focus is on you. An important shift
to make is to eliminate "I" language wherever possible. For example, if
you say, "I think you should counter at $375,000," the emphasis is on
you rather than on what the seller wants. In contrast, when you use the
word "you," the emphasis falls upon your client. "It's your house and
it's your decision. Where would you like to make your counteroffer?"
Another word to avoid is "we." When "we list your house," when "we get
an offer," and when we "close the transaction," "we" end up having to
pay when things go wrong. Do you want more tips on the language that can undermine your negotiation success? If so, don't miss Part 4. ----------------Three signs you're a poor negotiator
Part 2 of 6: Secrets of powerful negotiation
By Bernice Ross
Inman NewsDealing with real estate lowballers
Part 3 of 6: Secrets of powerful negotiation
By Bernice Ross
Inman News
Words to avoid when negotiatingPart 4 of 6: Secrets of powerful negotiationFriday, May 11, 2007By Bernice Ross Inman News |
|||
(This is Part 4 of a six-part series. Read Part 1, Part 2, Part 3, Part 5 and Part 6.)
How hard are you "trying" to negotiate more effectively? Do you "hope" that you can get better? Do you believe it "can't" be done? Be wary of the simple words that you use when you negotiate. What you're saying and what your client is hearing may be entirely different.
Last week's article examined the powerful influence language has on negotiation. This week's article digs deeper by explaining how a few simple words can completely undermine your negotiation process.
8. Eliminate the word "try"
The word "try" implies failure. For example, when you say, "I'll try to call you tomorrow," the client hears, "I'll call you tomorrow." What you meant to say is that you may call tomorrow, but you also might not call. If you don't call, you failed and the client is angry. When you negotiate, say exactly what you intend to do. Never reference what you will "try" to do. Also, when your clients use the word "try," pin them down. When a client says, "I'll try to get back to you sometime soon." Counter with, "Does that mean I will hear from you tomorrow?" If the answer is "No," then ask an additional question: "How about the day after tomorrow? Will I hear from you by then?"
9. Eliminate "can't"
Many people use the word "can't" as a catch-all word that has several different meanings. Specifically, "can't" may mean "I don't know how to do that" or "I don't want to do that," Thus, when a client says, "I can't see myself selling for such a low price," respond by saying, "Is it that you can't afford to (doesn't know how to) or that you really don't want to?" The key is to avoid arguing about the situation. Instead, asking a powerful question can help you become closer to your next sale.
10. Eliminate "but"
"But" is one of the most commonly used words in the English language, especially if two people disagree. As a result, "but" rears its head frequently in negotiations. In many cases, "but" precedes an objection. "We really like this house, but it's too close to the school," or "We know the market is slowing down, but we still want to list the property at a higher price." People use "but" to give the impression that there is agreement, when in truth, they actually disagree. The challenge with using "but" is that it negates everything that comes before it. When you are negotiating, listen for "but"; it will help you to identify what your clients dislike and cope more effectively with their objections. In terms of your own language, substitute the word "and" for the word "but" to provide a more positive result. For example, instead of saying, "I know I should prospect, but it's very difficult," say, "I know I have to prospect, and it's very difficult."
11. Eliminate "hope" and "if."
Both words are wishy-washy. Instead of saying, "I hope that we can find the perfect home for you," be positive by saying, "I know we can find the perfect home for you." Instead of saying, "If we get an offer," say, "When we get an offer." Clients prefer to work with agents who are positive, no matter how dreadful the market is. If you hear yourself using "hope" or "if," drop the wishy-washy approach and make a bold statement -- you know you can do it!
12. The most important word to avoid: "should"
Our society "shoulds" us to death. We should lose weight; we should prospect everyday; we should spend more time with our loved ones, etc. One of the most productive things you can do both at the negotiation table as well as anywhere in your life is to drop the word "should" from your vocabulary. When people use the word "should," typically they are trying to manipulate you or the situation. Many of us use the word "should" to make ourselves feel guilty about what we are not doing. You may accomplish 20 things today and then beat yourself up about the one thing that you did not complete. To reduce the stress in your life, do this experiment for the next week. First, notice how often others attempt to manipulate you by using the word "should." Be aware of the situation and then notice what it is the other person is trying to make you do. Second, notice when you use this word. Chances are you're attempting to use power or manipulation to get someone else to do what you want them to do.
In negotiation, words carry only about 10 percent of the information we receive. Watch for next week's article, which will address how body language can influence your negotiations.
------------------
Body language reveals home buyer's true intentPart 5 of 6: Secrets of powerful negotiationFriday, May 18, 2007By Bernice Ross Inman News |
|||
(This is Part 5 of a six-part series. Read Part 1, Part 2, Part 3, Part 4 and Part 6.)
Masterful negotiation results from being able to correctly read between the lines of what your clients are saying. One of the most powerful ways to do this is to acquire an understanding of your clients' body language.
While it's easy to recognize when a negotiation is proceeding well, most agents are poor at understanding why a negotiation goes awry. Effective negotiators recognize when they need to slow down or speed up the negotiation process. They know how to relieve the client's anxiety and what to say to calm difficult situations. Rather than relying on verbal cues, however, the primary way they gauge what is happening is by watching their client's body language.
If you focus exclusively on closing the client, you may overlook the nonverbal messages that your clients are constantly sending. For the most part, these are unconscious and hence, unmonitored. In fact, what the client says may be the exact opposite of his or her body language. When there is a contradiction, body language trumps the spoken word. The reason for this is that words carry about 10 percent of our communication. The bulk of our communication comes from our tone of voice, our pace, as well as how and where we position our bodies.
Emotion or Logic: Which One Should I Use?
A primary reason for doing face-to-face negotiation is to read the clients' body language. An easy place to start is to note whether your clients are relying on emotion or logic in their decision-making process. Careful listening will tell you whether your clients are making an emotional buy or if they are buying for a logical reason such as reducing their taxes.
People who buy based upon logic will make emotional objections. They become scared; they find fault with some part of the property that is not perfect; or they may become angry over something that is inconsequential. On the other hand, when buyers purchase based upon emotion, they normally have logical objections. Has the market bottomed yet? Are interest rates going to drop more? Can I really afford this much house? If your clients make an emotional objection, counter with logical data such as interest rates, convenience, space needs, etc. If your clients make a logical objection, counter with the emotional benefits of owning the property.
You can also recognize the types of objection they will make based upon whether the client is leaning forward or leaning back. When your clients lean toward you, they are agreeing with you emotionally. This is the time to highlight the emotional benefits of owning the property. When they lean back, give them logical data
The Eyes Have It
Watching your client's eye movements can reveal a great deal about what is happening during the negotiation. To determine whether your clients are accessing a memory or perhaps telling you a lie, watch their eyes. Begin by asking your clients to describe something about their current residence that you can verify. Watch whether their eyes go right or left. The side they use to recall something about their home is the side they use when they are recalling memory. When their eyes go in the opposite direction, there's a high probability that they are being "creative" or not telling the truth.
Your eyes hold other clues as well. When a person nods and his or her eyes become wider, your message is being well-received. If they glare and/or narrow their eyes, it's time to change tactics. If they raise one eyebrow, they don't believe you.
Watch Their Toes
Another simple way to tell whether your clients are with you or withdrawing from you is to look at where they position their feet, especially if their legs are crossed. If the toe of the leg that is crossed is pointing towards you, the person is with you emotionally. If the toe is pointing away, especially if it's pointing at the door, they may be ready to run from you. In fact, the first time I heard about this approach, I was watching the final episode of "The Bachelor." The bachelor was seated between the two finalists. When it came time to hand out the final rose, this approach correctly predicted his choice. While he was sitting between the two women, his toe pointed to the woman he eventually selected.
Nervous Nellies
Negotiations can be stressful for all involved. If your clients are leaning from side to side, they are probably bored or disagreeing with what you are saying. Laughing at an inopportune moment, fidgeting, playing with one's hair, tapping a pencil or pen, or wringing hands all indicate tension. So does a red flush, bulging veins or a tense posture.
Hostility Watch
Besides the eyes, here are some other important signals that indicate your clients may be feeling hostile. First, if they place their hand in front of their mouth or nose, they may be lying to you. Crossed arms, hands on the hips, hands behind the neck, tapping fingers on the table, or a hands-down handshake indicate resistance or superiority. Clients who lean forward with both the legs and arms crossed are in a protective stance. Finger pointing or abruptly adjusting their clothing also indicates hostility.
The challenge is once you recognize what is happening with their body language, what do you do? See next week's column to learn more.
----------------------------------
Deals close when buyers are in controlPart 6 of 6: Secrets of powerful negotiationFriday, May 25, 2007By Bernice Ross Inman News |
|||
(This is Part 6 of a six-part series. Read Part 1, Part 2, Part 3, Part 4 and Part 5.)
If you're attempting to use manipulation or other outdated closing techniques from the last century, it's time to recognize that today's consumers need a different approach to negotiating that puts them in charge of the decision-making process.
Last week's column discussed how to identify body language that indicates whether a client is lying, feeling tense or becoming hostile -- behavior that is primarily the result of broken trust. Clients fear that they're just a number, that you are more interested in your agenda than theirs, or that you may try to manipulate them. Thus, the old phrase "buyers are liars" is usually false. Instead, negotiation challenges almost always result because the agent has tried to move the process forward too quickly or has violated the client's trust in some way.
Be a Conduit of Information
Over the years, I've watched thousands of agents struggle with scripts that did not fit their personalities; hard closes that made them feel sleazy; or aggressive tactics that turned off their clients. When it comes to closing, a better option is to be a conduit of information. Your role is to provide your clients with as much information as possible so that they can make the best possible decision. Being a conduit of information removes you from having to pressure the clients in any way. When your clients feel in control, most objections disappear.
It's Their House and It's Their Decision
The most important phrase that you can add to your closing vocabulary is, "It's your choice, what would you like to do?" Outline the options available to your client; ask if there are any options that you have missed; and then turn it over to them for the decision. Remember, it's their house and their decision. This simple approach reduces the stress of negotiation dramatically. Your clients perceive that you are on their side and are doing your best to help them achieve their goals.
Overcome Objections by Asking Questions
Buyers' objections are almost always buying signs. They normally do not raise objections unless they see themselves living in the property. One of the best strategies to overcome objections is to ask a question. For example, when the buyer objects to the seller's choice of carpet, you could respond by asking, "Would you prefer to replace the carpet or would you refinish the hardwood floors?" This is a classic "alternative choice close" where you are asking the buyers to picture themselves living in the property. No matter how they answer the question, they see themselves living in the property. As a rule of thumb, the more questions you ask and the fewer statements that you make, the more likely you are to close your clients.
Answer Questions with Questions
Another important strategy is to answer questions with a question whenever possible. When a buyer says, "How much do you think the seller will take?" One question to ask is, "Would you like to write an offer to find out?" When a seller wants to know how much their property is worth, review the comparable sales and then say, "Where would you like to position your property in the marketplace?"
Be Congruent
One of the key concerns that many agents have is how to build client trust. Trust begins with being congruent. This means that you do what you say you are going to do. It also means the words you say, the way you say them, and the way you move your body also all match. When you speak with your clients, do your best to match their rate of speech, volume and pace. Keep your body still. Nervous movements on your part will make them nervous. Being congruent also means that you match their level of eye contact. Watch their body language to see if they are feeling uncomfortable. If so, slow down your pace and step or lean back from them. You want them to feel that this is their decision -- not something they were forced to do.
Is that a Strategy that Works for You?
When competing against other agents for a listing, outline your marketing plan and then ask, "Do you believe that I can get your house sold?" If the seller says, "We're interviewing other agents," respond by saying, "Great. Please compare our premium marketing plan with those provided by the other agents and then decide which agent can help you obtain the highest possible price for your property in the shortest amount of time. Is that a strategy that works for you?"
What makes this approach powerful is that you have set the expectation that the other agents will bring their marketing plans to their meeting with the sellers. When your competitors show up without a marketing plan, you'll get the listing virtually every time.
The Early Bird Gets the Worm
Ultimately, the large majority of clients end up doing business with the first agent they contact. Your negotiation skills are of little use if you're not generating leads. Thus, the most important negotiation skill you can acquire is simply to take every possible step to be the first one who contacts the client. If you immediately respond to every lead you generate, you will have plenty of opportunities to exercise your excellent negotiation skills.
