Million Dollar Agent
Million Dollar Agent
Advanced Negotiation Tactics
Delve into the art and science of negotiation—a fundamental skill for real estate success. Drawing on decades of combined experience, the discussion unpacks strategies transforming negotiation from a mundane task to an expert-level skill crucial for real estate agents.
Enhanced negotiation skills aid in fetching the best property prices and fortifying an agent’s reputation for delivering client satisfaction.
From dissecting real estate negotiation tactics to elaborating on the importance of emotional intelligence, this episode provides practical insights that every agent can implement.
Whether discussing the balance between caring and remaining professionally detached or the pivotal role of face-to-face interactions, the conversations align around creating value and achieving win-win outcomes.
Tom Panos, john McGrath, troy Malcolm, million-dollar agent post-grand final. What a great feeling it is to know that all our three teams weren't in the grand final. The Roosters and the Rabbits are no better than the Tigers. You watched it from the sidelines. By the way, troisy, I don't know if John told you we had a nice lunch with the state of well, I think he's going to be the ex-state of origin coach because he can't keep both jobs. Is that right, john? I never asked him that.
John McGrath:Yeah, michael Maguire. So yeah, nowadays, national coaching jobs and state coaching jobs are pretty much exclusive and they don't use a lot. The old days, you know, you used to have to coach a club team and then the state, but that's finished. So, michael Maguire, we just caught up with him briefly before he goes to Queensland. So shout out to all our Queenslanders we think you're getting a really if you're a Broncos fan, we think you're getting a really great coach up there. I had the pleasure of working on the board of Souths for half a dozen years while Michael Maguire was there and, of course, we won the grand final in 14, and he's a terrific fellow and a great coach. So, yeah, best wishes to Michael and best wishes to Broncos for next year. I think you know they're one of the great teams in history, broncos, and I think he will bring the best out of it.
Tom Panos:Okay, so we've got about two to three months before Christmas and there's so many subjects we can talk about every week. There's one we don't talk about often enough negotiation. Yet it is such a big part of a real estate agent's life If you actually think about it. They're negotiating pretty much all day, every day. So what are they negotiating in real estate? Well, for a start, you're negotiating your fee. You're negotiating prices with buyers. You're negotiating the concept to a vendor that we should realign the price of your property. We'll get more buyers that'll come through it. We're negotiating getting marketing campaigns. So negotiation is something that is critical in the work of a real estate agent. So we're going to dig deep on this. Troy John, you reckon negotiators are born or they're made.
John McGrath:I think, like anything, tom, or certainly most things we discuss, it's all about being made and adopting a skill. I think negotiation is absolutely no different. Anyone can be a better negotiator, for sure, and most people can be an extremely good negotiator. I think it's just like playing a game of golf If you're serious about learning to be good at it and practice, then you'll become really good. So I think today you know our goal choice try and share with our listeners.
John McGrath:You know half a dozen, maybe, tips of things that we've all picked up along the way, because, as we were just saying off air, tom, before we started, you know negotiation is really. I mean, I know you mentioned marketing, tommy, and negotiation, but marketing, arguably, could be provided by anyone, including vendors could use it themselves. But if you're looking to set yourself aside from all the other agents, your ability to extract the best outcome on their behalf is really the one main skill that people are paying for, because anyone can advertise a property, anyone can show a property, most people do a good job describing the benefits of owning a property, but who is the agent that can actually get the best outcome for the vendors and I think that's what we're going to talk about today is you know what are some of the things you can do to obtain that best outcome.
Tom Panos:Okay, so on my screen, which obviously our listeners can't see, I've actually got five or six bullet points and we can touch on those and then we can all add and extend on those, and Troy will have a view on on some and John will as well. But starting off with using the pause, using the pause, and whenever we've had a great speaker at ARIC that's touched on the subject of negotiation, and there's another better than chris voss, probably the best in the world, uh, and this comes from some of the great agents I've I've I've had, I had brad. Brad pillinger said to me the other day. He said if you read, uh, the book by chris voss, um, never split the difference. He said that is an all-time classic. He goes.
Tom Panos:I've read it many, many times. He goes. It is just so good. But he talks about using the pause and often people have got this incredible need and desire to actually have to answer everything. A buyer says, oh, the bedrooms are a bit too small, and then someone jumps in and says, oh, no, but blah, blah, blah, blah and the whole commission breath talk starts. Often using the pause and silence is a very way to actually handle in a negotiation. Love to get your views on why you think that that's so effective.
John McGrath:Yeah, I mean I might kick off Troisy because a few things I've probably sort of learned over the years. I know you and I have discussed these before and I hope, or I expect, you'll probably agree that you might have some others. The first one is I read a book many years ago and I actually met the author, herb Cohen, in the Regent Hotel once upon a time. He wrote a book and I recommend it, just like the Chris Voss book. This is an oldie but a goodie called you can negotiate anything. He was a, a jewish new yorker, who was kind of an expert, expert in um, in negotiation, and the one thing that stood out for me was um. That I remember. When I met him at the region hotel he said it to me and when I asked him, what's your number one, mr cohen? What's your number one, mr Cohen? What's your number one tip? He said care, but not that much.
John McGrath:And when you read about it in the book, it doesn't mean be arrogant or complacent or a bully, it just means that you've got to detach yourself from the outcome. And, tommy, you use the word all the time beautifully, or the phrase called commission breath. The needier you are, the more you kind of want the deal and people can sense it the less leverage and the less power you have in that negotiation. The most powerful person in any negotiation is the one that is prepared to walk away. Whether you're a buyer or a seller, it really makes no difference. So you know, again, one has to be careful because sometimes you do need a deal, especially if you're representing a vendor who's somewhat in the background, desperate to get the sale done. They might have pressure, especially nowadays, they might have pressure bearing down from their lenders and so forth. But again, the way to get which is one of the reasons, by the way, that I hate when agents put mortgagee sale and vendor must sell that sort of thing. You know, I think if it is a deceased estate or a mortgagee sale, I think it's okay to put that. But I see this all the time Vendor must sell and it just takes away any bargaining power, any negotiation power. So the first one that I'd share would be care, but not that much. Just be cool and calm and you have to signal that unless the right figure is reached, you've got a preparedness to walk away and and a plan b if you will. That'd be the first one, um. A second one, tommy.
John McGrath:I think product knowledge, knowledge of the information, knowing of knowledge of the situation is really important. So how does does that work? Product knowledge is if you actually have some really rock-solid data about why it is absolutely logical, plausible, to be transacting at this price and you can relay that. It really helps because buyers buy emotionally and they want to sort of satisfy it with some logic. So even if they kind of feel they're paying a premium, if you can say look, here's this property. It went at 1,200 square metres. It was facing south. The one you're buying today has got 1,450 square metres. It's rear to north and it's got approval to extend up another level and you can give them some rationale to pay the premium that you're seeking, because we're always in a position we should be seeking a premium in every negotiation. So I think you know your intel about it. I mean you might pick up from conversation that they've sold. We had one recently and we sold it for $43.5 million. So it actually works, tom, in every price range. But the buyer said look, I've just sold my property for 80 million in Bellevue Hill and they told our agent that they really didn't want to rent, they just wanted to buy and move straight into something and there was a timeline of eight weeks. So our agent utilised and didn't take advantage of it, but knew that that was a preferred part of the deal. They didn't want to rent. So he really got in his hustings and he found someone that he'd sold the properties to previously that was prepared to transact. So I think, uh, that's important.
John McGrath:Third one, troy, let the silence do the heavy lifting, which is what you just mentioned. Tommy, I think, um, yeah, pause, um, utilizing asking, one of the you know, schoolboy eras that happens so much in our industry is asking a closing question and then answering or adding to it, rather than letting the the other side of the negotiation. So you know whether it's asking for a listing or whether it's asking for your full 2.5 percent or whether it's asking for, you know, full asking price on a property, whatever it might be. I think it's really critical, once you've asked a question, to let that go. Pickle, sorry, my little dash hand is ripping up the carpet. Pickle, stop it honey. Last one, last one, and then, Troy, I'm sure you'll have something to add. It's kind of combined two into one.
John McGrath:The first one I just jotted down here when we were talking is um, always let them save face. So, negotiation, you want, you want the other side of the transaction to walk away feeling okay about it. You don't want people feeling that you know you've squeezed every skerrick of oxygen out of in the transaction. So you know, I always I'll often say to somebody Tom, why don't you have a little chat, I'll walk outside. I know you love the home and I really recommend that we need to come in a full price to to be competitive or we're going to lose it. But you guys, I want you to feel comfortable with it. So I'm just going to walk into the garden and you just let me know when you're ready. So I always kind of walk out. I never want someone to feel like they're being pressured. And again, that's a bit of the care, but not that much as well that I'm not here and I'm not trying to bully you into a decision, because I'd never do that. It just doesn't work.
John McGrath:And if you're playing the long game, um, and the last one which is a part of that, troy, is, I think negotiation to a large degree doesn't have that much to do with money. Rarely is it that a buyer won't pay another cent because they don't have another cent, it's more likely that you've offended them in the negotiation, that they don't want to be seen as being foolish and overpaying for a property or whatever it is. So it's often more about ego and fear than it is about, oh, that buyer, because don't tell me, someone that offered 1.25 couldn't pay 1.25 too if they really had to. There's always a little bit more that you can get, make and pay. So I think that again, again, it's about making people feel comfortable that it's their decision, giving them the information so they can make the decision wisely without being a fool. Um, so, giving them that sort of advice.
John McGrath:You mentioned, tommy, before, and I'll finish and I'll shut up now, troy, but never split the difference. Who we had at eric chris voss, many years ago, great speech, great book, great YouTube clips. If you want to go on and it's funny, you know, because many, many a transaction, I split the difference, or nearly split the difference over the years, because sometimes you know I'm not going to say it's the best way to do it, but sometimes you know, know it does bring things together. But here's, here's a little tip that will get you many, many deals going forward if you adopt it, if you haven't done it before. I've got an offer of $2 million.
John McGrath:The vendor wants $2.1 million and I say this Tommy, you need to work with me here. I know you love the home, I know you guys want to be there and I can get your family moved in by Christmas if you work with me. But you need to sort of come with me on this. Obviously, they're at $2.1 million and you're at $2 million and they'd like to get the whole $2.1 million and you'd like to get the whole 2.1 and you'd like to buy it at 2. I get all that, but we need to budge if we're going to get the deal done.
John McGrath:Come up with me and you know, often these situations can be resolved, or nearby resolved, by splitting the difference, which would mean they come down to $2.5 million and you come up. Here's what I'm going to ask. I'm going to ask you to invest another $5,000 on top of a splitting the difference strategy. I want you to give me a firm offer on a contract of $2,055,000. Then I can go back to them and I can, in good faith, sell the fact that you've worked hard to get your best outcome, and then I'll reverse that.
John McGrath:When I go and speak to the vendor I'll say, troy, you know you're probably thinking that's a possibility, I could come back and suggest that we'll get the deal done if we split the difference. But the buyer has actually come up above that and they've come up 55. So you only need to come down 45 and then it's done and you're out of here by Christmas and you don't have any more inspections and any more hassles and any more stress. So again, just you know, if you do have to have end up in a scenario where perhaps sharing the upside and the downside or splitting the difference is the best way, always try and get your buyer another $5,000 or $10,000 above the difference to show the vendor in good faith. They've made it easier for the vendor to say yes, troy, what have I missed? Just?
Troy Malcolm:a couple of points to add, john, to what you mentioned. What I've noticed the very best real estate negotiators. First one is they really listen to understand. They listen to understand why they feel like the buyer should potentially come up, why they feel like their property is worth more, and on the reverse side, they seek clarity on why the purchaser is only prepared to go to a certain level. So they do that really clearly. Now to double down on that most of them, nearly all of them, do it face-to-face Now, whether that be in-person, physically or digitally. They really like the idea of the concept of seeing the person interacting with them. It's very easy to hide behind a phone, so they really want to have that, and via text message it can be interpreted so many different ways. So the video call or the power of being face-to-face, and that's why we see so many times auctions come together, maybe if they pass in on the auction floor, they normally get a negotiation or a negotiated sale pretty quickly after if both parties are still hanging around.
John McGrath:Sorry to jump in, but that's a good point. I mean, one of the reasons that auctions can often work so well is for both sides. There's the immediacy and the fact that it's done. No more building reports, no more negotiation. You buyer or you seller, or both, clearly agree on a price here and now during the auction. The deal's done, you'll be in in six weeks, you'll be out in six weeks. And I think you're right. That's a very good reason.
John McGrath:And I used to use the metaphor and I forgot what was that show that Eddie McGuire used to do about? He handed people a cheque. He wants to be a millionaire, yeah, there you go. So you often see people say, oh, you know, I think I'll go on. And then you see eddie take out his pen. You'd sign a check for 20 000. He'd hand him a check. He'd say there you go. And so many times you'd see him look at it and it was theirs. And they saw money in the bank and they said eddie, I'm going to take the money.
John McGrath:And the same happens in negotiations. Tom, you know, you get people when they got the money in the hand, they can see it in their account. So again, you know, obviously, troy, you know, I know you coach your team all the time on. It is, you know, whenever possible face to face. But even more importantly is written contracts with deposit paid so the deal is closed if the vendor says yes. It's a very different power than saying you know, if you say yes, then I'll contact them, we'll get a contract. They want to get a building report. They'll need a few days. That doesn't have the same attractiveness to Troy. If you say yes right now, I'll just get you to approve the bottom of the contract and it's done and you're over and you're finished. That has a lot of power as well In a negotiation.
John McGrath:It certainly helps. You know, get both sides and, by the way, tom, I do that just as much with the flip side. Going back to a buyer, because quite a few agents do with the seller, take a written contract but I like to take the seller's written contract. So if they're at, you know two million and I've got a seller at two one, I'll get the vendor signed at two one. Go back to the buyer and say it's yours. All you got to do is initial your two million, pop another one on the second digit there and you'll own this and the number of times that's helped get a deal over the line both sides. Sorry, troy, keep going.
Troy Malcolm:Well, I was just going to say, john, the example you did live as well just before was my second or third point, which was the tonality. So the tonality in which you deliver a negotiation can actually make or break the negotiation. If you go in too hard and aggressive, then you're more likely to lose that negotiation. If you go and you have that really make them feel important mindset, you're more likely to get that scenario where you do have a positive outcome for both parties. So thing for everyone.
Troy Malcolm:We know that one of the key to communication, the key tools that we have in our arsenal, is the tonality in which we deliver. And then the last one that I just wanted to add in was have that it's my pleasure attitude with everything. It's never too hard If a negotiation is drawn out, it's never too hard. It's my pleasure to help. How else can I help you? And I think, if you go, that the law of reciprocity actually plays a lot in our favor.
Troy Malcolm:So those are the key points, john, that I've jotted down on other stuff that we've discussed with our team over the years. But I definitely believe that face-to-face, really seeking to clarify why people are prepared to negotiate where they're up, to make them feel important with the tonality in which you deliver and then have it as a my pleasure attitude is really going to set you apart. When you're negotiating with both buyer and seller and actually anyone, even colleagues, competing agents, team members it really makes a difference out there in the field and another little one, tom, just to add before we throw back to you is um, remember, the negotiation is not just about money.
John McGrath:It, you know, it could be about timing. I can get you a six-month settlement which takes the pressure off and allows you to sell your property. It could be about inclusions. You know I've won and lost deals because of inclusion. Sometimes Vendor says they want to take the dishwasher and the buyer said, well, hang on, their dishwasher always remains. So you know, can win or lose a deal. Sometimes it's about, you know, a lesser deposit. Sometimes it's about a greater deposit and releasing that deposit to the vendor. So instead of $200,000 deposit, we've got a $500,000 deposit and they've allowed us to tell you that that can be released on exchange of contracts, except for my commission, of course. Um and um, and that can be attractive, especially if you know the vendor has got a bit of a cash flow issue which might be driving the sale. So I think, yeah, very much. Remember that it's.
Tom Panos:It's primarily about money, but never exclusively about money yeah, and as we finish off, I'm gonna fit it finish with a case study of michael tringali, who I bought my everything that used, not everything. 80 of what you both covered there was done by michael tringali in the purchase of the home that I live in in aberfield. Like he actually turned around and he said to me if you're prepared to sign that contract and give me a deposit, I'm prepared to go to their home tonight on Christmas Eve to do it Right. So if you do that, I'll do this Right. At the time we'll just go and see if you get it wrapped up and I'll give you, I'll give you the deposit. He turned around. He said load my gun with some bullets, tom, you're going to send me there with nothing. Sign a contract with the cheques so I can do the. Who wants to be a millionaire client? You're just there.
Tom Panos:And then the last thing I noticed is just talking to Maguire over that lunch. John, when I look at some of the stories that he shared himself or with players, whenever there was something that was negotiated, he said oh no, got on a plane and go over and see them personally, right, I think there are so many things Now, listen, I totally get it. We've got Zoom and we've got FaceTime, we've got phone calls. But there are certain things in life that will end up having a higher probability of happening if you're eyeball to eyeball, voice to voice, skin to skin, and getting offers accepted is one of those things. This thing about you know I'll text them, oh, we've got an increase of 2 million and 50, see whether they'll take that right. That's totally different to going over there and seeing them and saying, hey, I want to let you know. The offer is $2,060,000. They've borrowed $10,000 more off the mother-in-law. That's why it's $2,061,000.
Tom Panos:Who was the trainer? I hate mentioning his name, but it was one of the few things I actually got. I mean was Neil Jenman. I did a course from beginner to winner 40 years ago and Jenman said at the time he goes, what you want to do is, when you get an increase of offer, get it off at an odd number, because people will turn around and say, well, if you've got 850, why couldn't you have got 853 or 200?
Tom Panos:So I just think if there's one skill that an agent should move themselves from a 7 out of 10 to a 10 out of 10, it's going to help them in every aspect of real estate, including everything I've just shown up there on the screen that you can't see. It'll help you actually negotiate. You'll be able to prove your value as a negotiator, to get a better fee. You'll be able to help your vendors get higher prices if you can negotiate well. But yeah, look, it's a wonderful subject and all I can say my experience with real estate agents that are good negotiators they're not desperate. And why aren't they desperate? Because they've got a lot of balls up in the air at any one time, so they're not dependent on this one thing going off. Right, they've got lots of listing presentations, they're dealing with lots of buyers, so they don't have all their hopes built on this one thing going off. And that's probably one of the real secrets to being a good negotiator be a good prospector.
John McGrath:If you're a good prospector, you'll always have lots of opportunities.
Tom Panos:Volume negates luck. Tommy Volume negates luck. I love that. Volume negates luck. That's got to be written down after here. I'll use that a thousand times in the next two years. All right, thanks.
John McGrath:Tony.
Tom Panos:Another episode, another rugby league season, another AFL season. Daylight saving for lots of Australia. Enjoy it.
John McGrath:Signing off. See you guys, see you team.