I recently interviewed several real estate agents in person to determine the best fit to help sell my mom’s condo. Since negotiation comprises one of real estate agents’ core competencies and our agent would be our front-line negotiator with buyers and their agents, I was particularly interested in their negotiation abilities.
Of course, I was also hiring their expert knowledge of the local market, marketing savvy/ability to bring potential buyers to the table (through their networks and otherwise), and proficiency in accessing and evaluating comparable properties, standard contracts, and other crucial benchmarks.
I was also testing each agents’ negotiation ability in real time, as I was requesting a discounted commission and asking advice on whether and the extent that we should negotiate buyers’ agents’ commissions (an open issue given the National Association of Realtors’ lawsuit settlement several years ago).
While none checked every one of my expert negotiator boxes – it would have shocked me if one had – each illustrated strengths and weaknesses.
Here is what I found, which should help you when you hire others for their negotiation abilities (like real estate agents, lawyers, investment bankers, consultants or any other “professional” negotiator).
- Strategic approach to the process.
Each hit several of the major elements of strategic negotiating (my Five Golden Rules of Negotiation), but none did so in a disciplined, systematic way. In other words, no one brought to the meeting a pre-determined Strategic Negotiation Plan and identified it as a strength vis-à-vis the other agents.
Two of the four, however, had taken a previous negotiation training course – one of whom even included a “Certified Negotiation Expert” designation on their LinkedIn profile (an independent standard attesting to their negotiation abilities).
Fortunately for me, I can impose this level of strategic discipline on the process going forward. You also should impose this on all those you hire to negotiate on your behalf.
- Strategic intelligence gathering on me prior to our meeting.
Only one of the four did their strategic homework prior to our meeting and looked me up on the web to find out my background, personal interests (for rapport-building), etc. Regular readers of this column know the value of strategic intelligence gathering about your counterparts.
Since they all knew that I was interviewing several agents, the intelligence they would have gathered by spending five minutes or so would have given them great insight into my interests and the importance I placed on their negotiation skills. They could have then emphasized this in our meeting (focusing on your counterpart’s interests is always crucial).
I was impressed with the one agent who did this.
- Differentiation with other agents/leverage.
As one of my questions (I had a list), I asked each agent how they differentiated themselves from the others. Since this is a fundamental element of leverage (the alternative agents were my Plans B and C and D), they should have come prepared with an effective answer. And all the answers were good – but one was better than the rest.
One mentioned their relationship-building skills (which were quite high). Another noted their analytical abilities (also very good). And they all mentioned their extensive experience (each had around 20 years’ experience as agents).
But one emphasized 1) their high energy level and excitement about the condo (an important element as they would be communicating this to potential buyers), 2) the inclusion of professional staging of the condo in their compensation, valued at around $3,000 (a very smart element as staging inevitably increases buyers’ perception of the value of the condo, which also then accrues to the agents’ compensation), and 3) their standard commission, which was slightly discounted off the standard rate in the area.
The latter response was the most effective, and not just because I was price sensitive on behalf of my mom (and which I told all of them).
More lessons in Part Two in my next column. Stay tuned!
Latz’s Lesson: When hiring professional negotiators, consider their strategic approach to the process and how they differentiate from your alternatives/Plan Bs.
* Marty Latz is the founder of Latz Negotiation, a national negotiation training and consulting company that helps individuals and organizations achieve better results with best practices based on the experts’ research. He can be reached at 480.951.3222 or Marty@LatzNegotiation.com.