Last night I couldn't get to sleep. There wasn't much on TV at 3:00 a.m. however, there was an episode of Bravo's Million Dollar Listing.
It's always interesting for me to watch these shows because there's some truth but also a lot of glamorizing about what goes on in the luxury market. The idea of doing verbal negotiations on the phone for multi-million dollar properties may happen, but the actual process doesn't usually resemble the TV show. First, almost all the high end folks have attorneys and business managers. You negotiate with them. The client says "I want this property" and then it's up to the money folks from there.
My experience has been that the business managers want reams of supporting comparable sales data. They will dig through every last detail. Of course, that doesn't make interesting TV.
The one thing on this particular episode that I thought really reflected great closing skills was how the situation was handled for the developer who had a $5 million listing that was not selling. The only offer was for a lease at $50,000 per month.
The listing agent correctly surmised that if he could turn the seller on to another project, he could close a lease deal as well as a sale on another property.
Instead of meeting the seller at his office or at the listing, the agent decided to have the meeting at a listing that would be perfect the developer's next project.
When the listing agent first broached the idea of a lease, you could tell the seller had no interest. The agent didn't give up, however. Instead, he correctly pointed out that the seller would make $600,000 in terms of rent and that would give him a positive cash flow. That's much better than sitting there with a vacant property.
The agent sealed the deal when he pointed out what the developer could do with the next property. He understood the developer mindset--they're always looking for the next deal. When they have finished a project, they're eager to start a new one.
Regardless of which price range that you're working in, understanding what makes your buyers and sellers tick is critical when it comes to negotiating deals.
According to some negotiation experts, there are only two ways to close a deal--one is with "brightness of the future." This is for the person who is looking forward to the change in their living circumstances. Closing has you point out all the good things that will take place from the move.
The other approach is called, "turn up the pain." This approach works well when someone wants to get away from noisy neighbors, end a long commute, or have more than one bathroom for the teenagers. To close in this situation, point out how miserable the current situation is and how great it will feel to put an end to it.
Remember, one of the most important questions that you can ask your buyers and sellers is, "What's motivating you to move?" When you know their motivation, closing becomes much, much easier.
Posted by Bernice Ross. This week on RealEstateCoachRadio.com we’re pleased to welcome real estate’s leading expert on keeping safe—Andrew Wooten of www.JustBeSafe.com. Andrew’s book, Live, Work, and Play More Safely, addressed the challenges we face today in maintaining our safety at open houses, listing appointments, and vacant properties. Andrew has been speaking on safety for 26 years and has interviewed a number of felons about how they target their victims. Join us to learn about what you can do to protect yourself and your family both on and off the job.
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