One of the most powerful ways to generate direct marketing responses is to set out reasons why responding to your offer brings wonderful pleasure and why not responding sustains or even increases pain.

Whenever you can, set up pleasure and pain offers. You can do this even in face to face presentations.

Tell your prospects all the good things that come by working with you or buying a particular home…

And then suggest the bad things that may occur (or remain the same) by not responding.

Articulating pleasure and pain offers simply means telling people the favorable consequences of accepting your offer and the undesirable consequences of doing nothing.

Here are a couple of examples:

Why They Should Choose You as Their Agent

  • Pleasure: “Sell your home for the most money, in the fastest time and simplest way because I use proven marketing methods and have a vast network.”
  • Pain: “Choose a different agent and you may end up working with inexperienced, careless, even thoughtless agents that will drag the sale of your home own for ages, refuse to negotiate and market the home as minimally as possible.”

Why They Should Buy That Particular Home

  • Pleasure: “End constant frustration with limited storage space, enjoy vaulted ceilings, ample sunlight and a vast, fenced in yard.”
  • Pain: “Skip this opportunity now and the next buyer strolling up may beat you to the punch.”

Why It Makes Sense to Put an Offer On This Home Now

  • Pleasure: “Position yourself to move into this home sooner rather than later, besides…”
  • Pain: “Waiting to put an offer on this home might allow another buyer to come in and put an offer on it and then the seller may like the idea of a price war, which means the highest bidder wins.”

Pain Is Not Torture, If…

To some this may seem like manipulation. In my mind, as long as you are telling the truth and not withholding certain truth…it is not manipulation.

You are giving facts to a person to help them make a decision. Ari Galper’s got this down pat.

One thing that is extremely helpful when working with pleasure and pain offers is that you believe in yourself–and what you are doing.

If you don’t believe in yourself and don’t believe or enjoy what you are doing…then your resistance to this approach maybe a symptom to something deeper: job dissatisfaction, low-self esteem, insecurity.

I confess: I struggled early in my career with face to face sales simply because I was insecure. But that was not all…

Then I discovered I was an introvert. And that explained a lot.

Figuring out that I was an introvert [and being okay with it!] helped me to operate where I could be the most productive.

Writing is infinitely easier to me than face to face. I eat, sleep, read writing. It comes very natural. Face to face, on the other, is a vicious exercise of the will.

What that tells me is that I need to spend most of my time behind a keyboard. I’m very comfortable behind a keyboard, and salesmanship in print is very easy for me.

Still Not Comfortable with Manipulation? Think About This

Now, if telling people the truth about the pleasure and pain of certain decisions still feels below you and you are certain you are not insecure or introverted or in the wrong job altogether, then consider other issues outside of buying or selling a home.

Like drug addiction.

Would you be manipulating someone if you told them the pleasures of not doing drugs (stability in your life and freedom from worry about cash, cops or crashes)…

And then the pain of drug addiction (broken relationships, poor job performance, financial ruin)?

Consider this approach to other weighty issues, like teen pregnancy and smoking. Then move across the spectrum to subtler issues, say choosing a college, and finally buying a home.

I think you’ll see that it’s not manipulation when you are sincerely concerned for the other person and are simply putting all the cards on the table.

Even better is this: If you can remain objective during the process and even say, “You know, this may not even be the home for you. I just wanted you to know all the facts.”

This weekend I ran into a Realtor friend of mine. I asked her how things were going. I asked her if she had any horror stories that dealt with sellers and buyers in this flat real estate market. She did.

In a conversation that lasted less than 30 minutes, she shared 4 different stories about bone-headed, stubborn clients. And one timid, but cooperative client.

1. The Delusional Rehaber

Seller insisted he must sell his home for $325,000.

That’s how much he HAD to get out of it since he renovated the main floor, added the new second floor and built a detached two car garage.

The next closest price a home actually sold for within the last year–$178,000. Agent friend refused the listing.

2. Seller Under the Impression the World Will Wait for Him

A seller listed their house for $165,000 when the next closest was $145,000. The home sat on the market for 6 months. After they’d been paying two mortgages. They never allowed my agent friend to lower the price, accusing her of not marketing the home enough. This was not true.

She’d had it listed in all the usuals, MLS, online video, papers. She even sent out just-listed postcards.

When the listing expired, she re-listed on the condition they lower the price to $150,000, but seller insisted $155,000.

My agent friend agreed to $155,000 only because she knew she’d get showings and offers, which she did, but all the offers were around $148,000. She said to take it. They refused.

After 3 months she insisted they lower the price again, which the seller reluctantly did, to $148,000. He then insisted she go back to the agents who had clients who gave previous offers, but of course all the buyers had already bought a home.

The home eventually sold for $144,000 six weeks later.

3. Low Baller Gets Blacklisted

My agent friend had a buyer who low-balled an offer on a home $30,000 below the list price. The list price, compared to comps in the last year was probably $5,000 above average, but definitely could fetch something very close to list price.

My agent friend suggested they not go in that low, because even though they were in a buyer’s market he was probably going to piss off the sellers. The buyer insisted. Doing her job, she sent in the offer.

The seller’s agent came back, said, “My client knows you are just doing your job, so nothing with you, but they refuse to entertain any offer from that buyer.”

When she shared that information with her client laughed, he said, “There playing tough. Okay, well go back $20,000 under.”

She said, “You don’t understand: they don’t want to work with you.”

He was appalled and said, “Is that legal?”

4. A New Hot Water Heater Does Not a Massive Upgrade Make

Seller bought a home, replaced the hot water heater, and a year later put the home on the market, $26,0000 more than for what he bought it for, but $15,000 more than any other home sold in the area.

My agent friend recommend they sell it closer to the comps, but the seller refused.

It sat for 3 months without any offers.

The seller agreed to lower the price, got plenty of offers, but sold it only once it was $1,000 less than the best comp, 3 months later.

The seller was furious he’d replaced the hot water heater.

5. Nice Nurse Plays Hardball with Builder, Reluctantly

A nice nurse wanted to buy a home. Over about 3 days, my agent friend drove her around to see 4 homes. None fit the bill. The fifth home they saw did fit the bill. But it was out of her price range.

However, according to recent comps, the home was over-priced at $175,000.

My agent friend suggested they offer $162,500, which high nurses, but still in the nurses range. The nurse agreed because she loved the home to death, but she didn’t think that was such a great idea, didn’t like the idea of such a “low offer” but trusted my agent friend.

The builder of the home came back with $168,000. This shocked the nurse. They countered $164,000. The builder countered that with $165,000. Agent friend and nurse countered with $164,500, which the builder jumped all over.

What Is Up?

Here’s the deal: My agent friend couldn’t understand why so many people ignored her advice, especially after she patiently laid out the facts, namely that no home had sold with in the last year for the prices anyone wanted to buy or sell. Except the nurse.

What was the difference? Why do some people, despite your professional experience and wisdom, choose to do things there way?

Not too many people in their right mind would tell the heart doctor that they’d really like to stick to the double bypass surgery instead of the recommended quadruple bypass.

What gives? Let me know your thoughts. I look forward to hearing from you.

Last week I shared with you a curious secret about getting people to believe you. That ended up being a pretty good post. One week later, returning to the same theme–negotiations–I want to talk to you about the other side of the coin.

The dark side.

The Dark Art of Lying

I’m a pretty casual guy. Most of the time I think pretty well of people. I give them the benefit of the doubt. I believe them. And don’t think too many people lie.

My wife gives me trouble about this.

On three different April Fool’s Day I fell for fake cuisine: baby carrots, grilled cheese, chicken pot pie.

[Stop laughing. It's not funny.]

Sometimes its hard for me to believe that someone is lying to me. I think mostly I think this way because when I think of lying I think of a malicious car thief or hateful dictator.

But lies can be common during negotiations, lies like “I don’t remember saying that I’d throw in range and microwave,” when in fact they do know that they did promise that but at this point they’ve changed their mind for one reason or another.

Instead of simply withdrawing the offer, they lie.

However, telling if someone is lying to you is not only useful in a real estate context. Anyone can use this knowledge in everyday situations where telling the truth from a lie can help prevent you from being a victim of fraud or scams and other deceptions, like April Fool food pranks.

The following rapid-fire list of techniques are to help you detect if someone is lying. These techniques are used often by police, and security experts.

Read up now and become a regular Holmes.

Body Language of Lies

If someone is lying to you, physical expression will be limited and stiff, with few arm and hand movements. Hand, arm and leg movement are toward his own body. The liar is trying to take up less space.

A person who is lying to you will avoid making eye contact.

He will touch his face and throat with his hands. He will touch or scratch his nose or behind his ear. He will not likely touch his chest where his heart is with an open hand.

But he will not look at you.

Emotional Gestures & Contradiction

Timing and duration of emotional gestures and emotions are off a normal pace. The display of emotion is delayed, stays longer than it would naturally, then stops suddenly.

Timing is also off between emotions and gestures, between expressions and words. For example: Someone says “I love it!” when receiving a gift, and then smiles after making that statement, rather then at the same time the statement is made.

A liar’s gestures and expressions don’t match the verbal statement, such as frowning when saying “I love you.”

[Ugh, that one hurts.]

When someone is faking emotions (like happy, surprised, sad, awe) instead of moving the whole face a liar’s expressions are limited to mouth movements. For example, when someone smiles naturally their whole face is involved: jaw/cheek movement, eyes and forehead push down.

Interactions and Reactions

A guilty person gets defensive. An innocent person will often go on the offensive.

A liar is uncomfortable facing his questioner or accuser and may turn his head or body away.

A liar might unconsciously place objects (book, coffee cup, etc.) between themselves and you. He’s creating that barrier. Kind of like when he tries to consume less space.

Verbal Context and Content

A liar will use your words to answer you question. When asked, “Did you eat the last cookie?” The liar answers, “No, I did not eat the last cookie.”

Liars sometimes avoid “lying” by not making direct statements. They imply answers instead of denying something directly.

The guilty person may speak more than natural, adding unnecessary details to convince you…they are not comfortable with silence or pauses in the conversation.

A liar may leave out pronouns and speak in a monotonous tone. When a truthful statement is made the pronoun is emphasized as much or more than the rest of the words in a statement.

Words may be garbled and spoken softly, and syntax and grammar may be off. In other
words, his sentences will likely be muddled rather than emphasized.

Other Signs of a Lie

If you believe someone is lying, here’s how you can test him: change the subject of the conversation quickly. A liar follows along willingly and becomes more relaxed. The guilty wants the subject changed.

On the other hand, an innocent person may be confused by the sudden change in topics and will want to get back to the previous subject.

Also, liars tend to use humor or sarcasm to avoid a subject. Ever heard the bad joke in the middle of a pretty serious discussion?

Warning

Obviously, just because someone exhibits one or more of these signs does not make them a liar. The above behaviors should be compared to a persons normal behavior whenever possible.

Got any other lie detecting tricks up your sleeve? Share and share a like.

Do you know the value you bring to a real estate transaction? Could you easily justify your 6% commission to a skeptical buyer?

Often, real estate agents don’t know the value they bring to a transaction. They underestimate their worth. They dread the “C” word. They worry someone will figure them out.

So, when commission is mentioned, they throw themselves at a buyer’s feet and say, “How much?”

Over dramatized, I agree, but close to the truth. Especially in this wonderful mortgage meltdown we seem to be having.

Knowing the value of what you bring to the table is essential if you want to overcome any objection to a 6% commission.

With that in mind here are five simple reasons to justify your commission:

1. Without a professional, sellers may not sell as quickly. This is critical if they have a deadline or contingency clause on another house.

2. You are an objective, seasoned negotiator. You bring an emotional, clear-headed stability to the table. You are able to see the whole picture and you might pick up on advantages amateur negotiators would miss.

3. You know competent home inspectors, architects, contractors. You’ve been dealing with these people for years and know their work well.

4. You will list their home on the MLS–a privilege granted only to real estate professionals. And the MLS means nationwide exposure.

5. You will advertise and promote a seller’s home on the internet in newspapers, magazine ads, brochures, the MLS and on your own web site. To do this themselves would be costly.

Listen, the point is to distinguish yourself as an expert in the art of buying and selling a home. Educate yourself. Designate yourself.

Lawyers command enormous fees for a reason: they are experts. Surgeons are the same way. It’s not enough to say that you passed your state exam.

You have to define some skill you bring to the table that any hack on the street couldn’t bring. And once you define this for yourself, learn how to articulate it with pose and clarity.

Finally, have the courage to walk away from any deal, especially if someone insists you cut your commission. This attitude alone will make you a powerhouse, profit-making real estate professional.

Then, believe in yourself. Wholeheartedly.

Most Realtors haven’t been in the business long enough to see anything but a boom market, and the current slump is new to all but a handful of veterans.

This means buyers and sellers are negotiating this rapidly changing market with the advice and guidance from agents who may not be terribly familiar with the current landscape.

Just for sake of clarity, here’s a snapshot of the current market: home-buying activity has slowed, consumer debt is rising and some houses are sitting on the market longer.

What about you: is this bear market new to you?

Your Greatest Challenge

One thing is for certain: it is a buyer’s world. In fact, buyers are able to make requests that would have been laughable two years ago. Requests like picking up dog poo, removing goldfishes from aquariums, even babysitting rats. [Have you had any absurd requests from buyers or sellers?]

Of course, the biggest demand buyers are making deals with price. And sometimes in a negotiation over a home, the price appears to deadlock progress on buying a home.

This is your biggest challenge. Here’s how to deal with it.

Overcome the Stand-Off

Pretend your buyer categorically says, “I’ll be willing to buy this home but I absolutely will not pay more than $304,000 for it.”

Now, the house is listed for $369,000 and you know from comps that the home is already priced low. You know that your buyer could easily afford a $400,000 home. He’s just playing hard to get. You also know that the seller will not budge either.

An inexperienced agent may look at this situation and see it as deadlocked, the negotiation stalled, the deal maybe even dead.

The veteran knows better.

The veteran says, “I understand how you feel about price, but let’s just set aside that issue for now and talk about some other issues that are important to you.”

Here you go into the particulars of the home that you know the buyer values: school district, short drive to work and cul-de-sac, for instance.

The idea is to try to establish common ground and gain momentum on the little issues. Great negotiators know that big issues become more flexible when you find some common ground on the little issues.

Once you establish those little issues and get your buyer excited about agreeing with them, your buyer is then in a better state of mind for negotiating that price he said earlier he would not budge on.

Where Agents Fail in Stand-Offs

The inexperienced agent thinks he has to deal with the major issues first. He thinks, “If we can’t agree on the big issues, how do you think we are going to agree on the little issues?”

This is like tackling a giant’s chest instead of going for his ankles or knees. You’re just going to make him mad instead of appealing to areas you just might have a fighting chance.

And it goes back to my earlier point: people are more likely to yield on the big issue if you’ve established some momentum and common ground.

That momentum is key to breaking that standstill.

When it comes to personal freedom among the citizens of the world’s countries, Americans tend to stand apart.

Germans, for example, are willing to obey strict building codes to preserve the historic beauty of their cities.

Canadians are willing to accept stricter gun control laws for personal safety.

Americans, on the other hand, have an incredible desire for personal freedom, no matter how destructive it may be.

We have a tremendous desire to feel free; we don’t want to feel like we’ve been outmaneuvered and only have one choice
left open to us.

The Lesson

That’s why when you are in a closing situation you should always give the other side two options from which to choose.

The key to the Two-Options technique, however, is that both options must be acceptable to you.

You say, “Well, Jack and Jill, I don’t think that there is any question that you should buy this home…the question becomes, how do we work it out so that you can live comfortably with the investment?”

“Let’s take a look at these two different financing plans and tell me which would be best for you. One is a…”

The takeaway lesson here: never back anyone into a corner by saying, “Take it or leave it, they won’t reduce the price.”

Chances are they will probably leave it.

The Pain

Then again, I’ve been in positions myself where I got it into my head that I had to have something. And I wouldn’t budge. Later I regretted the decision.

Have you ever done that?

And have you ever been in a situation where you saw a client who was hooked and it was obvious no amount of reason could persuade them differently?

At that point, are they truly free?  

If you haven’t already, subscribe to the real estate marketing Blog by rss feed or email.

In 2002 I read a book called Essential Crazy Wisdom by Wes Nisker.

In that book Nisker draws from the philosophies and religions of the East and West to discover the madmen, dreamers, and unconventional wisdom seekers who turned wisdom and used it in an intrinsically contrary way.

Their wisdom at times stood completely off the scales of normal human judgement. Dangerous, you might say, but these off the wall thinkers produced some of the most powerful ideas in history…

Just think what a little crazy wisdom then could do for your real estate business.

That’s why today I want to show you how crazy wisdom can be used in negotiation.

Overcome the Stale, Lifeless Routine 

First, Nisker talks about the idea that it is impossible sometimes to see the very nature of the shape of box if we are completely inside of it.

In real estate, especially if we have been in the business for a number of years, sometimes our ways of negotiation or mediation or conflict resolution become stale or lifeless. We often hit a point of where we lack creativity to solve problems.

Or, we get completely stuck doing the same thing over and over again that handling the testy seller this way doesn’t get results.

In a situation like this, it’s best to bring in a third person who has a fresh view of the situation. Or, simply allow some time to pass, whether its just one night or one week. Breaking away from the situation allows you to gain a new perspective to it when you return.

Get a Lobotomy 

The second notion of crazy wisdom applied to negotiation is that of gaining many perspectives.

Go to a new place. Hang out with different people. If you’ve been a member of your chamber of commerce for 15 years, consider becoming a Rotarian or Shriner. Consider visiting a new church.

Better yet, hang out with people you wouldn’t normally get along with. Whether they have opposing political, social or religious view. Find out how they think. See life how they live it, how they move in it, how they view it.  

If you have a buyer who is fussy about details and your not, try to step into his shoes and see where he is coming from. Understand why he is fussy about details. This will allow you to gain a new perspective, an understanding of that person. You are tyring to disrupt your normal pattern of seeing things. You are giving yourself a healthy lobotomy.

And once you see things differently, once you understand that person, you will empathize and find almost magically the negotiations getting back on track.

In the long run, taking yourself out of your comfort zone might sound crazy, but it will make your wisdom wiser, deeper, wider. It will make your negotiations more fulfilling, satisfying and rewarding.

The End Is Not What It Seems

Another way you can apply crazy wisdom to negotiations is the idea that agreements rarely end with a verbal or signed contract. In a lot of ways, there is much more negotiation to do on the other side of the negotiation.

This is the idea of the end actually being the middle. It means that even though the ink has dried on the contract, your work has really just begun. You, my friend, have to keep many of the details of the home selling or buying process moving, post-contract.

That Is Blasphemy 

At one point in his book Nisker quotes the British playwright George Bernard Shaw: “All great truths start as blasphemies.”

This is true, isn’t it? Think about negotiations.  

Typically, early in talks parties treat each others truths with scepticism and sometimes scorn. But as trust builds these truths are generally accepted and creatively built upon to produce a new, until then unheard of solution.

Or parties don’t build upon these truths and eventually the talks crash and burn.

The lesson here: build trust with people and eventually your truths on both sides will come to life and create something that neither of you could have created on your own.

Finally, crazy wisdom shows up in simple questions.

The Scientist Who Asked Simple Questions

Nisker noted that Albert Einstein was infamous for asking simple, near-childlike questions. But the questions cut through the smog. They got to the heart of the matter. And quickly. Think about children.

They question everything. And as parent at times you find yourself wondering, “Why do we believe that? Why are things that way? They don’t have to be that way, do they?”

Simple questions are not offensive, but in the same sense very potent weapons. So learn how to frame simple questions that get to the heart of the situation, and you can keep negotiations effecient and effective.

Now, get out there and apply some of this crazy wisdom to your business and life. Then get back to me and let me know if I’m off my rocker with this stuff or not.

Here’s to your success!

+++ If you haven’t already, subscribe to the real estate marketing Blog today either by email or just click on the big button to get the feed:

“Just as the deepest hunger of the human body is for air, the deepest hunger of the human soul is to be understood.” Stephen Covey

Whether you are mired in closed door negotiations over the value of a piece of property. . . interviewing a star agent who you want to join your team. . . sitting in the home of a seller during a listing appointment. . . or simply enjoying dinner with your spouse, listening to another person until he or she feels understood is the equivalent to giving that person air. . .

And could mean the difference between a successful or disastrous conversation.

On the average, studies show that 75 percent of our waking hours is spent in verbal communication: 30 percent in talking, 45 percent in listening.

But the average person is a “half-listener,” retaining only about 50 percent of what he or she hears immediately after it is heard.

And many people, while outwardly listening, are inwardly preparing a response. And this often is a reason that a lot of conversations fall apart mid course.

But good listeners, on the other hand. . . power negotiators. . . generally follow a consistent set of guidelines or skills, that allow them to hold together even some of the more volatile negotiations.

Some of these guidelines are listed below:

1. Good listeners use their thought speed to advantage. They constantly apply their spare thinking to what is being said:

  • Are the speaker’s facts accurate?
  • Do they come from an unprejudiced source?
  • What are the speaker’s motives?
  • What has the speaker left out?
  • Is the speaker dealing in facts or inferences?
  • Am I getting the full picture or only what will prove the speaker’s point?

2. Good listeners try to find something interesting in what is being said, something that can be used to help create a new idea or solution or be used in some other way.

  • What is the speaker saying that I need to know?
  • Is that really a practical idea?
  • Is the speaker reporting anything I don’t know?

3. Good listeners avoid getting too excited about a speaker’s point until they are certain they have heard it through and understand it.

4. Good listeners concentrate and instinctively fight distraction. They close a door, turn off the radio and interrupt only when it is necessary to clear up one point before proceeding to another.

5. Good listeners focus their attention on a central idea or theme. This helps them to remember the facts cited.

6. Good listeners restate and summarize the speaker’s point of view. They also look into the speaker’s face and maintain eye contact.

7. Good listeners enable the speaker to express what the speaker has in mind and thus make the speaker more able to give listeners the information they need.

[Adapted in part from Covey's audio program Living the Seven Habits and the books The Power of Words, by Stuart Chase (possibly out of print?), and Are You Listening, by Ralph Nichols and Leonard Stevens.]

In the spirit of what we are doing here at the Real Estate Marketing, today I want to share with you a negotiation technique that I see happening more often I think than necessary.

Not always in the real estate arena: I’ve seen it with clothing salesmen. I’ve seen it with an acquaintance trying to sell his business. I saw it once with a simple street peddler in Dustin, Florida one summer.

But because real estate is my main focus, my life so to speak, I’ve of course seen it a lot in this business. And like I said: I think it’s unnecessary.

I’m not absolutely sure why it happens, but I have some hunches: desperation and fear.

Go ahead and read the remainder of this post and afterwards let me know what your thoughts are.

Salespeople are typically short on patience when they smell a deal in the air. In fact, sales trainers sometimes teach that if you do not strike while the iron is hot, you might lose the deal.

But impatience may encourage a real estate agent to make unnecessary concessions.

Knowing this, a savvy counterpart might stall for time… trying to make the impatient negotiator nervous and more willing to make trade-offs.

Imagine an investor offers a FSBO $100,000 for his home.

Over the next few days, that investor calls two or three times to ask what the FSBO thinks of the proposal.

The FSBO never calls back. He’s stalling, hoping the investor will make some concessions if he feels she isn’t offering a particularly good deal.

In fact, the FSBO might be doing business with a competitor the investor thinks, and gets nervous…

Although she is not sure if the FSBO has even had time to review any of her proposals, the investor leaves a message that her “numbers are ballpark, based on the information given, and there is room to negotiate.”

And this is exactly what the FSBO wanted.

The moral?

Never discount a price before your counterpart tells you there is a need to do so. Never make a concession until it is apparent the other side wants one. 

Your best bet: wait patiently for a reply. And do not call over and over again. You’ll look desperate.

So, tell me: why do you think real estate agents–salespeople in general–do this?

And when it comes to negotiating, do you look forward to the conflict or do you shy away from conflict?

What do you think of the idea of stalling?

Is this particular technique something you’ve used in the past? If so, were you successful?

Is it something you would use in the future?

Looking forward to hearing from you!

If you haven’t already, subscribe to the real estate marketing Blog today either by email or just click on the big button to get the feed:

1. Negotiate.

2. Negotiate more.

3. Negotiate even more. 

4. Negotiate with the clothing store clerk, the garbage man, the mail carrier.

5. Negotiate with your broker.

6. Negotiate when you don’t want to.

7. Negotiate when you want to.

8. Negotiate when you know you can get something better, bigger, faster.

9. Negotiate everyday.

10. Always negotiate.

← Previous PageNext Page →