Last week, we explored four negotiation tactics that you should be aware of when working in Luxury Real Estate.
This week, I want to discuss how to recognize unethical negotiation tactics. These are tactics that you should avoid but it is important to study them so you can recognize when they are being used against you.
Unethical Negotiation Tactics
I will go into detail about six negotiation tactics that are unethical. Being able to learn and recognize these tactics will help protect you and your client during a real estate transaction.
The Red Herring
The Red Herring is a tactic where an individual makes a very low offer, then they’ll stick something in the offer to distract you from the really low price. This is a red flag that is designed to distract you from the low price in their offer.
The Trial Balloon
Politicians use the trial balloon all the time, but they call it a leak. If people really reacted negatively to the information you give them, they say, “Oh that was a leak and it wasn’t really true.” If people love it, they can say, “Yeah, we were working on that.”
The Low Ball
This negotiation tactic is by far my least favourite. People do it because they believe it reframes the person’s thinking. My advice to you on lowballing is to be appreciative of the offer, thank them for their interest, and get them to move forward by telling them about other offers.
Bait and Switch
This is becoming more prevalent in real estate, especially with cash offers. If you’re going to make an offer, like a cash-like offer, the ethical way to do it is to say, “Listen, I’m gonna make an offer, I am getting a mortgage, but I’m not making my offer contingent on getting a mortgage, because I know I’ll get approved.”
Are You Nuts?
Some people just go nuts. They’ll scream or go into tirades—either in person or on the phone. I try to just take a deep breath and let them vent. Otherwise, I’ll do the silent treatment, which makes them go even more nuts until they just run out of energy.
The Written Word
This is sort of like the limited authority tactic where you pre-print things into your contract. Certain agents or companies in your marketplace might have their own forms that aren’t standard Realtor Board forms. They’re using their own company forms. Read every form you get very carefully because that’s a great tactic to bury stuff in boilerplate and you want to make sure you’re not taken advantage of.Concentrate on the merits of the negotiation rather than the positions. Click To Tweet
As a real estate agent, it is vital to be able to recognize when these negotiation tactics are being used on you. Bottom line is to look for the underlying reason in someone’s position. Why are they doing what they’re doing? What is it they really want to attain? What is their goal? What is their motivation? Look for solutions rather than getting hung up on the tactics.
Until next time, make it a great week.