Advanced Negotiation Tactics

Tom Pannos, John McGraw, Troy Malcolm, million dollar agent, post-grandfinal. What a great feeling it is to know that all our three teams were in the grand final. The riskers and the rabbits are no better than the tigers. You watched it from the sidelines, they by the way, Troyzy, I don't have 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's got, he can't keep both jobs. Is that right, John? I never asked him that. Yeah, Malcolm McGraw, so nowadays, national coaching jobs and state coaching jobs are pretty much exclusive and they don't use, like the old days, you know, used to be at a coach club team and then the state, but that's finished. So, yeah, Malcolm McGraw, 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 South for half a dozen years while Malcolm McGraw 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 in 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. 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 will 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 the go-shaders are born or they're made? Well, I think like anything, term or certainly most things we discuss, talk 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 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, our goal choice, try and share with our listeners, 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 or properly, anyone can show up properly. If people do a good job describing the benefits of owning a property, but, you know, 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? 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 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 Eric that's touched on the subject of negotiation, and there's another better than Chris Voss, probably the best in the world, and this comes from some of the great agents. I've had, I had Brad Pillinger said to me the other day, he said, "If you read the book by Chris Voss, never split the difference," he said, "That is an all-time classic," he goes, "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, I like, you know, a boy 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. Yeah, I mean, I'll kick off Troy's because a few things have probably sort of learned over the years, I know you and I have discussed these before, and I hope, or I'll expect you probably agree with you might have some others. The first one is I've read a book many years ago, and I actually met the author, Bert Cohen, in the region hotel once upon a time, he wrote a book, and I recommend it, just like Chris Voss book, this is an oldie, but a goodie called "You Can Negotiate Anything." He was a Jewish New Yorker who was kind of an expert in negotiation, and the one thing that stood out for me was, that I remember when I met him at the region hotel, he sent it to me, and when I asked him, "What's your number one, Mr. Cohen? What's your number one tip?" He said, "Care but not that much," and when you read about it in the book, it doesn't mean be arrogant or complacent or 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. If you're the media 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's is prepared to walk away. Whether you're a buyer or a seller, it really makes no difference, so 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, I hate when agents put mortgagey sale and vendor on my sell, that sort of thing, you know, I think if it is a deceased estate or mortgagey sale, I think it's okay to put that, but I see this all the time, vendor on my sell, and it just takes away any bargaining power and in negotiation power. So, yeah, 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 a plan B, if you will. That'd be the first one, a second one to me, I think product knowledge, knowledge of the information, knowing your knowledge of the situation is really important. So, how 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 went at 1200 square metres, it was facing south, the one you'll buy today's got 1450 square metres, it's red and 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 always, in a position we should be seeking a premium in every negotiation. So, I think, you know, you're intel about it, and you might pick up from conversation that they've sold, and we have one recently, and we sold it for 43.5 million. So, it actually works time 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, you know, 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 a property to previously that was prepared to transact. So, I think that's important. Third one, Troy, let the silence do the heavy lifting, which is what you just mentioned to me. I think, you know, pause, utilising, asking one of the, you know, school wearers that happen so much in our industry is asking a closing question, and then answering or adding to it, rather than letting 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%, 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 the question to let that go, pick up. Sorry my little dish at least ripping up the carpet because stop it. Finally, last one and then Troy, I'm sure you'll have something to add, it's kind of combined two into one. The first one I just showed it down here when we were talking is always let them save face. So negotiation, you want the other side of the transaction to walk away feeling okay about it. You don't want people feeling that you've squeezed every scaric of oxygen out of in the transaction. So you know, I always, I'll often say to some of you, 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 at full price 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 in that if you're playing the long go. And the last one, which is a part of that, Troy is, you know, I think negotiation to a large degree, doesn't have that much to do with money really 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 more, it's often more about ego and fear than it is about, oh, that buyer. Because you don't tell me someone that offered 1.25 couldn't pay 1.25 to if they really had to. There's always a little bit more that you can get, make and pay. So I think that 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. So giving them that sort of advice, you mentioned to me 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 I was funny, you know, because I've 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, it does bring things together, but here's a little tip that will get you many, many deals going forward if you adopted, if you haven't done it before. I've got an offer of two million vendor once 2.1 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 and you're at 2 and they'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. 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 million and 15 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 million and 55. 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 when I go to speak to the vendor, I'll say, Troy, you know, you're probably thinking that's possibly 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, just, you know, if you do have to have end up in the scenario where perhaps yes, sharing the upside and the downside or splitting the difference is the best way. Always try and get your buyer. Another 5 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 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 see 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 enviotex 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 options come together. Maybe if they pass in on the auction floor, they normally get a negotiation or a note negotiated sale pretty quickly after if both parties are still hanging around. The next one. I'm just 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 buy out or you sell it or both clearly agree on a price here and now during the auction, the deal's done. Maybe in in six weeks, you'll be out in six weeks. And I think you're right. That's very good reason and I used to use the metaphor and I forgot, what was that show that Eddie McGuire used to do about the handed people on check in the name? Yeah, there you go. So you often see people say, I think I'll go on and then you see Eddie take out his pen and sign a check for 20,000 in hand and a check and so 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. And the same happens in the negotiations, Tom, you know, you get people when they've got the money in the hand, they can see it in their account. So again, 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, it's 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 that I'll need a few days, that's, 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 the negotiation. It certainly helps, you know, get both, 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 it with a seller, take a American contract, but I like to take the sellers written contract. So if they're, you know, two million and I've got a seller, two one, I'll get the vendor assigned a 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, you go, well, I was just going to say John, the example you did live as well, just people 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 think for everyone, 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. Even negotiation is drawn out. It's never too hard. It's my pleasure to help. How else can I help you? And I think with you, if you go that the law of reciprocity actually plays a lot in our favor. 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 time just to add before we throw back to you is, remember the negotiations not just about money. It could be about timing. I can get you a six month settlement, which takes the pressure off and allows you to set it up properly. 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, they're always always remain." 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. 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, you know, very much remember that it's primarily about money, but never exclusively about money. Yeah. As we finish off, I'm gonna finish with. case study of Michael Tringali, who I bought my everything that you use, everything 80% of what you both covered there was done by Michael Tringali in the purchase of the home that I live in, in Abbotville, 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. I'm Christmas Eve to do it." Right? So if you do that, I'll do this. Right? Sat 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 and he said, "Load my gun with some bullets time. You're going to send me there with nothing. Sign a contract with a cheque so I can do the, what you should do, that who wants to be a millionaire. You're just there." 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, I'm not to listen. I totally get it. We got Zoom and we got FaceTime. We got phone calls. But there are certain things in life that will end up having a higher probability of happening if you're able 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 to $2,000,000 and $50,000 so that 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 $2,000,000 and $60,000. They've borrowed $10,000 of the mother-in-law. That's why it's $2,000,000,000, $61." There was, who was a trainer? I hate mentioning his name, but it was one of the few things I actually got. I mean, was Neil Jenman or 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 off, I get it off at an odd number." Because, you know, people will turn around and say, "Well, if you've got $850, why couldn't you've got $850,000 or $200?" So there are so many, there are, so I just see if there's one skill that an agent should move themselves from a seven 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 be a good negotiator, be a good prospector. If you're a good prospector, you'll always have lots of opportunities. Volume, volume the gate slug, Tommy. Volume the gate slug. I love that. That's going to be written down after here. I'll use that 1,000 to come for the next two years. Another another episode, another rugby league season, and now a fill season, daylight saving for lots of Australia. Enjoy it.