Every part of the real estate transaction involves negotiation. From the time that you make contact with a prospect all the way to closing, the real estate professional consistently either negotiates on their behalf or for their client.
Since the REALTOR® is the director over the entire transaction, I beg everyone to take at least some form of training on effective negotiation. A great course/designation I recommend is the CNE, Certified Negotiation Expert.
Example Scenarios Where You May Have To Negotiate:
- A seller wants to negotiate your fees on a listing appointment.
- The buyer wants to submit an offer to a listing agent on a property they want to buy.
- The terms of the contract for sale have not been resolved.
- The property inspection proves there are multiple defects with the home and the buyer wants them fixed prior to closing.
- The boundary survey finds that the neighbor’s property encroaches on the subject property.
Negotiation can take place in many different environments. Here are the different methods of negotiation in the order I believe is most effective:
- Face to face negotiation. Live interactions help you judge others by their facial expressions and body language but may take longer than other forms.
- Over-the-phone negotiation. Listen to inflections in the voice pattern to determine how the other feels about a negotiable item.
- Email negotiation. Send contracts, share detailed information quicker however the time delay of sending vs. recipient checking email may take longer in some cases.
- Social media negotiation. Use only as Twitter direct messages or Facebook email messages if the cooperating party uses the same network. Status updates may breach the client’s fiduciary responsibility.
- Fax negotiation. Most agents use fax because it traditionally has been the easiest and most view a fax confirmation as official notice of when a conract has been delivered.
- Mail negotiation. Takes longer than fax but may be the only option available for some clients and regions.
- Text message. What can you possibly negotiate on a text message? Dinner?
You can quickly see that the more real-time the negotiation the more effectively it will serve the party.
Take a look at some situations, factors and examples on negotiating using social media (focusing on Facebook and Twitter):
If a buyer’s representative places an offer on a property, he or she should NEVER post the specific address, client’s name, or the status of the transaction to Facebook or Twitter unless they are direct messages to the client. Competing agents on a hot property would notice a public status update on your behalf, giving them an edge over your client on what to do next. Also, as buyer representatives we have a fiduciary responsibility to protect their privacy from the buyer agency agreement following closing.
Determining motivation is one of the biggest ways to gain an edge on a competing broker to determine if a buyer/seller would accept more or take less for a property. I would recommend becoming friends with your competition on Facebook and following them on Twitter for this reason.
Broken Timeline of Communication
Email communication, just like social media, can be shared to where each message, whether public or private, can be marked with a time and date stamp.The challenge is that if we are using multiple communication channels to negotiate a transaction, then it will take extra time to create the timeline of who said what and when.
Some clients and agents still do not use email. Can you imagine if you added Facebook and Twitter to the mix? You cannot negotiate with someone if you can’t communicate with them. Also, if an agent sends you a note using a Facebook email message and your client does not use Facebook, an extra step may be required to copy and paste the message into an email. There is no forwarding or blind carbon copy on Facebook or Twitter. We instead should adapt to each other’s styles.
Immediacy of Publication
Have you ever sent out an email and wish you didn’t? Facebook and Twitter are no different. Use good judgment when you hit the send, publish or tweet buttons. Review the message for accuracy of spelling, grammar, and whether the message meets your objective. If you don’t want everyone to see what you have posted, just keep it to yourself. Negotiations can be negatively affected if something was released that wasn’t intended.
Once a conversation originates online via email or social media, it is stored electronically on the system used. Twitter-direct messages and Facebook email messages are stored until the recipient deletes them. Consider which conversations we should have electronically and which we should conduct in person or over the phone.
Disclosure of Imputed Knowledge
Some states (about half, check with your broker) have imputed knowledge.This means the knowledge of material defects by the agent is automatically assumed knowledge of the supervising broker and agents within the company. For example, if an agent knows about a leaky basement and publishes to an online discussion board of its existence, then it is assumed all the other agents in the company plus the broker have the same knowledge of the leaky basement. This is a much bigger concern for larger companies. Check with your broker, real estate commission or REALTOR® Association to see if imputed knowledge exists in your state.
Review the OLD CAR methodology (Thanks to Jim Kimmons) with your broker, REALTOR® Association, real estate commission, and your peers as it relates to social media.
- Reasonable Care