On Negotiations ~ Art vs Science

Just the other day there was this online query on whether the process of "Negotiations" is an Art or a Science.  There were many replies in addition to mine, most of which tended to skew towards it being an "Art".

First and foremost, "Negotiating" is a process, and like every process, it follows a journey.  So the trick is to map it out.. read on..

"Hello Alvin,

Thank you for your query on "negotiations".

It is a topic that has got many new agents stuck between the sellers and the buyers where one party is insisting on a sky price, and on the other hand, the buyer who wants a "good buy".

As you rightly have pointed out, both do not exist.

HOWEVER, contrary to popular belief, the art of negotiations is part science, part art. If I were to put a ratio onto it, it would look something like:

Art: 20%
Science: 70%
Luck: 10%

Let me explain.. An agent who leaves the full quotient of a successful deal to negotiations being an "ART" is as good as an agent who rides purely luck to close the deal. In such a case, do more charity or attend a religious group and that might enhance your chances of a successful close.

On the other hand, how does one turn negotiations into a "SCIENCE"? Knowledge is the key.

Let me explain, an educated "Buyer" will never pull a basement number out when making an offer. An example, the buyers that I serve, have on more than one occassion MATCHED the asking price of the sellers without negotiations, and then close the deal.

Sellers on the other hand, have priced their units to close on the first offer.

How is this possible? It all lies in educating both parties into the realities of the real estate market that the buyers and sellers are buying/selling into.

THIS is where real agents make their mark and value add to the deal. Agents who are able to share their professional expertiese to buyers/sellers to influence their views with hard and persuasive evidence will achieve the desired result.

An educated buyer/seller

Such a buyer/seller once convinced that you are a mark above the rest, will have you as their representative agent for life.

I once had a cobroke agent ask me,

"Has your buyer viewed any units in the development before?"

My reply was,

"Yes, all viewed through me, this buyer is exclusive to me."

My cobroke agent got a shock.

On the other side of the equation, sellers will ask a high price ALWAYS telling you the agent that their unit is the best in the market. Familiar?

Would it be difficult to organise viewings for the seller to be a "buyer" for the day to see and appreciate the other units on the market, and to understand the market sentiment on the ground BEFORE, pricing their own units to sell?

This, my friend is where real estate and negotiations is a science.

Rightly so as well since knowing the properties and its unique characteristics will allow the sellers and buyers to achieve a more realistic price.

True real estate agents are professionals who have good knowledge of their work and products.

The other agents are magicians who have made the art of negotiation seem like a magic show, and then rely on blind luck to close their deals.

Once the homework is set aside, closing the deal is as much an exercise in psycology, as it is an exercise in "luck" for the other elements to fall into place and successfully close the deal!

Hope this sheds some light on your query.

Do let me know if you have any further questions on how you might want to develop the "Science" aspects of your negotiatons."

Best Regards,

Mervin Tang
Senior Marketing Associate

CEA Reg No. : R030951Z
Huttons Asia Pte Ltd

Mobile: (65) 9184 0208
Website: http://www.SGrealestate.sg

It Begins!

And so it begins.

Many have written tomes on the wisdom of real estate investments from the perspective of investment professionals. 

This enterprise will start somewhat different as it will be written from the ground up.  Getting up close and personal with the realities on the ground, about what works in the classrooms, and the realities in the field. From the viewpoint of the real estate professional's direct experience with the sellers and buyers, and being a sales team leader on the ground.

This all began with my realisation that my conversations with my interactions in the property game of buying, selling and leasing were somewhat.. the same. 

Hence here begins my narration of some of the common questions that get served up by property buyers, sellers and even prospective agents alike!

Buyer beware:

The thoughts that follow are those of the writer, the purpose of which will, and always be to provoke thought and consideration in the reader, but with the goal of achieving an open mindset, for the reader to make his/her own conclusions. 
Happy reading!