In my last blog post, I explained why a new home salesperson needs to prepare to negotiate, and not just “wing it”. If you want to get the best deal for your builder and give the customer the value he is seeking, you need to prepare your negotiation strategy.
Here are five key steps to take when preparing to negotiate a new home sale:
- Know the outcome you want. Get it clear in your mind what you expect from this process. Of course, the sale is the optimum goal, but you also need to maintain the integrity of the builder, developer, and the property itself, as well as the other homeowners who have equity that could be compromised, depending on the outcome of this deal you are about to negotiate.
- Determine the concessions in advance. Know the limits before you begin negotiating. What incentives can you offer? How much elasticity do you have with the price? If you don’t establish boundaries in advance, you are likely to give up too much during the negotiation. Make a list of add-ons, incentives, and concessions that you feel comfortable offering, and don’t exceed them.
- Know your buyers. Every buyer has his own agenda, based on his desire for the home, passion for negotiating, perception of value, and long-term goals. In order for you to present the deal that will best suit your buyer, you need to understand this customer’s objectives. What do they want and why? Do you know what they need versus what they want? Be an active listener prior to the negotiation so you can gather the clues. Ask questions—the right questions that will lead you to a telling profile.
- Rehearse. Any good performance is practiced in advance. Professional athletes train every day to do their best during the heat of competition when any flaw or failure affects the outcome. Performers rehearse so that when they are on stage, they deliver their best effort, seemingly without effort. The same goes for the new home salesperson. The negotiation process is your stage, your playing field. Rehearse your delivery—with a colleague, a friend, or a family member. Practice your techniques on other salespeople when shopping. The added practice will lead to a negotiation performance that is truly eloquent.
- Maintain the power to walk away. Although your desired outcome is to close a sale at the end of the negotiation process, this result isn’t necessarily always the best option. If your buyer feels you are committed to making a sale—as opposed to making a profitable sale—then you forfeit the control. Be prepared to walk away from the negotiation if the deal is unreasonable. Your ultimate goal is to make a strong deal for your builder, not appease the buyer. Respect your builder, the property, and yourself by maintaining the power to walk away.