Proficient negotiation is a skill that must be developed and learned and is integral to the success of any sales business.
There are complete educational programs taught by many institutions and many corporate training groups. Negotiation as an art goes back just about to the beginning of mans ability to engage in commerce.
Once there was a product that someone produced, that someone else wanted, there was some form of negotiation involved for its acquisition.
However, in real estate, the entire process seems to have been lost. Most real estate agents have not developed the skill of negotiation. In a recent book by titled "Real Estate Principles" By Charles F. Floyd and Marcus T. Allen it is written that the NAR sought to "ease" the burden of an agent learning how to negotiate by providing fill-in the blanks, boiler-plate forms and documents.
What is most paradoxical is that many real estate agents will tell prospective clients that real estate negotiating is the most difficult part and one should utilize an agent because they are experts. Most agents have no idea when it comes to really knowing how to negotiate. This is not a character flaw...it's just not taught to them.
According to psychologist Abraham Maslow's Hierarchy of Needs, the highest need of individuals is self-actualization.
"Understanding motivation is the key to a successful negotiation. Agents who understand this can navigate their way through a decision-making process even before the negotiation gets underway.
Self-actualization, or the need for one to reach their greatest potential, is Maslow’s highest need."
Sun Tzu, in the Art of War said, "to see victory only when it is within your view is not virtuous". In his many teachings he also stated.." Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.
The Art of War has become a very important business book. It has been found that the principles that Sun Tzu spoke of in the 2nd century BC are very applicable in business today.
What does this mean in regards to Short Sales.
1. This is not a transaction to be taken lightly. If you are not aware and understanding of the motivation of ALL parties to the transaction then you are not prepared to negotiate.
2. Boiler-plate documents and cookie-cutter discussions as utilized in conventional real estate transactions is not conducive to a successful short sale transaction.
3. Negotiation is not a counter-offer. Negotiation is not sending an offer to the bank to "see if they will accept it". Negotiation is a planned, defined attack. I use that strong of a word to make sure you know you are in a battle. If you are not prepared to battle you will lose.
4. The basis of negotiation is that you have something at stake! Other than a commission that can be reduced, most agents do not have anything at stake and therein lies the biggest problem. If you are not IN the battle...but rather watching the battle...you really do not have anything to lose...or win.
Why would I want you negotiating my short sale? How are you posturing as an expert? And most importantly how are you helping the homeowner in foreclosure if you have no idea how to negotiate.
We see it everyday. The homeowners call us and tell us the horror stories. We put offers into agents who have foreclosure listings and time and time again, we run into the same old story. The agent does not understand and in turn can not negotiate what they do not understand.
Short Sales are not child's play. You can not go to a free 2 hour seminar and even remotely expect to understand all of the nuances, pitfalls and strategies necessary to maximize profit on a short sale. But...maybe therein lies the problem.
