Negotiation skills - more than simply "introducing"

If you read a real estate agent's Exclusive Sale Authority you will not see the word "negotiate" used anywhere to describe the real estate agent's role. According to the Exclusive Sale Authority, the role of the real estate agent is to "introduce" the parties to each other, or to "introduce" a purchaser to the vendor's property. It was only in the last decade or so that real estate agents adopted the term "negotiator".

(Click this link to see a sample Exclusive Sale Authority)

Introducing a purchaser to a property is a very simple matter. Negotiation, on the other hand, is a skill that calls for an intimate knowledge of legal prinicples, interpersonal skills and drafting abilities. All of these are well beyond the capacity of the estate agent.

 

Lawyers are the true real estate negotiators

"Like many things, experience is no guarantee of good results if you haven't learnt the right way to do it.
There is a big difference between negotiation experience and negotiation expertise."
Russell Wheeler

Lawyers are regularly involved in all kinds of negotations, including various commercial matters, conflict resolution, out-of-court settlements, and various kinds of purchases, sales, leases and other common agreements.

The role of the lawyer as a skilled negotiator is well summed up by this observation from the website of Business Lawyers Online:

"It is quite common for a business negotiation to be influenced by legal issues as well as commercial considerations. Therefore, if the outcome of the negotiation is important to you, it is wise to get advice to see if there are any relevant legal issues that need to be taken into account. This must be done before the negotiation starts. In fact, problems often occur if you negotiate the deal without knowing all the legal issues at the time and new issues are later raised by your lawyer. The need to introduce new terms into a negotiation after the parties thought that agreement had been reached can have an adverse (sometimes fatal) effect on the outcome. The problem is compounded by lawyers who include new terms in a draft agreement or in a lawyer to lawyer letter as if they are a done deal, even though they have not been raised or agreed to previously. I have seen deals fall over as a result.

If the lawyer you use is also skilled in negotiation you can kill two birds with one stone ... he or she will be able to help you with your intended negotiation strategy, if only by providing an objective opinion, and may even help with commercial issues if he or she is an experienced commercial lawyer."

Lawyers are always involved in any important real estate sale agreement; whether its the sale of a gas field, an airport, land for a new freeway, or a skyscraper, sheep station or suburban residential home - the final negotiations always involve a lawyer.

Appointing a lawyer who has experience in real estate negotiation is the best way to ensure that your real estate sale will:

• Achieve the best possible price;
• Satisfy both parties to the transaction; and
• Comply with all relevant legal requirements.

 

Why we are the best real estate negotiators

Lawyers Real Estate specialises in real estate sales, and has developed a reputation for being highly efficient and effective in gaining outstanding results (see our client testimonials).

We have developed the most effective negotiation method, which concentrates on obtaining the highest possible price as a first priority, with sale terms and conditions being negotiated after the bids are in, and vendor has made the decision to proceed to sale.

First, we establish the highest price

The usual method followed by real estate agents (the REI Method), eliminates propsective purchasers from the bidding process before they are given any opportunity to bid (see our page "Sale Negotiation" for more information on this). Lawyers Real Estate encourages all prospective purchasers to place bids, regardless of their status (see the paragraph titled "discriminatory sale procedures" on our Sale Negotiation page), so that competitive bidding can drive the price up as high as the market will bear.

Second, we establish the best possible terms

When competitive bidding has reached a level that satisfies the vendor, we commence negotiations with the highest bidder or bidders with a view to securing the best possible sale terms. It is at this point that the skills of the real estate lawyer become particularly important.

Third, we maintain the matter all the way to settlement - and beyond!

Many vendors are unaware that important negotiations often take place AFTER the sale!

When you sell your property through Lawyers Real Estate you have the benefit of legal advice and assistance from the moment you list your property, all the way through the sale transaction, including bidding process and final negotiations, the closing of the sale, conveyancing transaction and settlement, and even matters that arise after settlement.

In any real estate sale transaction there can be misunderstandings, something may go wrong through no-one's fault, or the purchaser may breach the contract in some way. You too, may inadvertently breach the contract. Who do you call when the wheels fall off, when it looks like it's going pear-shaped?

The lawyer!

Not only can we fix things when they go wrong, we can also anticipate problems and ensure that they don't go wrong. Our extensive legal experience in real estate sales gives us an edge. We know what the purchaser's lawyer is likely to say in response to an issue, so we know how to anticipate the course of events. Our real estate specific expertise puts you in control of your matter, and ensures that it stays on track.

 

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Why real estate agents are unable to negotiate effectively

If you are interested in understanding why real estate agents are unable to negotiate real estate sales effectively, please read on. We have provided a detailed analysis of the real estate agents operate, and the impediments they face when attempting to negotiate real estate sales.

 

The real estate industry provides no training in negotiation skills

Real estate agents receive no training in negotiation. This is because there is no formal training available to real estate agents:

Of course, real estate agents do receive training, but their training focuses mainly on techniques associated with convincing sellers to sign up for the real estate agent's services, not on real estate negotiation.

A check of the most popular real estate training book, "Mastering The Art of Selling Real Estate" reveals that none of the words "negotiate", "negotiation" or "negotiator" appear in the contents or the index.

Most of the information contained in this book relates to techniques to be used on vendors as the real estate agent seeks to be appointed to act for the vendor.

Here's an example of what real estate agents are taught:

"Another word that will destroy you is sign. What have your mother and father taught you from the time you were old enough to write your name? Don't sign anything unless you read the fine print! If the average human being takes a real estate agreement and reads the fine print, they'll want to see their lawyer. That's why we say okay, endorse, approve, or authorize. It's amazing that people won't sign anything, but they will approve it." (Mastering the Art of Selling Real Estate, Tom Hopkins Portfolio New York 2004 p.22)

Real estate agents are taught to use the word "negotiation" when referring to the unsophisticated and often clumsy techniques they use to bring about a sale. Similarly, in some cases real estate agents use the term "negotiator" instead of real estate agent. For example, see the article Estate Agents Unmasked, where an undercover journalist experienced first-hand the "negotiation" techniques of a London real estate agency.

[More information - "Real Estate Sale Negotiation - Lawyer vs Estate Agent"]

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