Negotiating Ins and Outs - Business Negotiation

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Think you can make money if you teach clients how to negotiate? It may sound counter-intuitive for a businessman or woman to instruct their clients on the art of negotiation, but think about this for a moment: if you offer insights and strategies that will help your clients get the best deal from their lender, even at the slight cost of your own profits, is that a good thing?

It is when you consider that the most effective marketing strategy in the world is word-of-mouth advertising. When clients turn to their friends and family members and let them know of the exceptional service and -they simply can't believe it- negotiating tips that you shared with them, at your own expense, then you are going to gain more clients over the long haul and turn over more mortgages and homes than anyone else in your office. It's basic business fundamentals that is often overlooked or forgotten in our current rat race environment where the immediate bottom line matters most.

Why? Why should the immediate bottom line be the most important factor in determining success for any broker or agent, for that matter? In this current economic climate, the need, desire, or desperation for a sale or closing can often cloud better long-term judgment. Don't let it.

People just want a good deal

Go into any used car lot on a weekend and you will see the definition of the pushy salesman. While the profit margins are sometimes thin to begin with for these salesmen and saleswomen, there is room to negotiate, yet you will find the negotiations to be often less than ideal, at least from the consumer's perspective. Adding cloth floor mats for $ 150 or a custom stereo for next to nothing can entice many people, but what is left out is the fact that often that stereo is an extra item the shop has laying around.

People want to feel as though they get a good deal, which is why, in real estate investments, they want to negotiate and feel that they have some control over their financial future and the amount they pay on their mortgage monthly. If they feel as though they have made a good deal on their purchase, they are going to refer their friends and family to the person (hopefully you) that helped them reach that 'good deal.'

Being the voice for the client

While brokers are the middle person for the deal with the lender and real estate agent and homebuyer, you want your clients to get the best deal and to feel as though they got the best deal because, frankly, when they feel as though they got a good deal, not only are they pleased with the lender, and you, but also with their real estate agent and this, in turn, will lead to more referrals for you and your agency.

Negotiating techniques to share

Now, most negotiating tactics that people tend to use are basic and rather common sense. The first and most important one is to be confident and assertive. This means that a client should know their value to a lender and how to get the most from them (in terms of the best rates, points, and other factors). When clients step into the process timid and clueless, they stand a greater chance of being taken advantage of and this can lead to significant money lost over time.

Next, help them find their leverage. Is their credit history impeccable but they don't have much to put down on the house? A lender in this climate may initially push for a higher rate, but when the client is confident and can stress their strengths, this can often lead to a better deal.

The third, and important tip, is to not be combative. People enter these negotiations on guard, expecting a fight. If they lose their hard edge and come across as complimentary, friendly, and willing to work for the best deal, then the best deal is more likely to come to them.

After all, people are people and will forever be influenced by demeanor and personality. We know this very well and our clients should as well. Coaching the basics of negotiating skills can go much farther than the hard-nosed dealings that some of us are used to.

David

David Reinholtz is a professional Mortgage expert in Real Estate Industry. David is also a sales and marketing expert and trains professionals in every career field. David has personally trained tens of thousands of loan officers, mortgage brokers, real estate agents and individuals through The Close More University Seminar Series, LoanOfficerSchool.com Classes, Correspondence and On Line Learning, and countless private engagements and training events throughout the country.

David is the Founder and CEO of LoanOfficerSchool.com, an approved education provider for The Conference of State Bank Supervisors and The National Mortgage Licensing Systems' (NMLS) required pre-licensing education and continuing education.

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