October 8, 2024 • 23 mins
Delve into the art and science of negotiation—a fundamental skill for real estate success. Drawing on decades of combined experience, the discussion unpacks strategies transforming negotiation from a mundane task to an expert-level skill crucial for real estate agents.
Enhanced negotiation skills aid in fetching the best property prices and fortifying an agent’s reputation for delivering client satisfaction.
From dissecting real estate negotiation tactics to elaborating on the importance of emotional intelligence, this episode provides practical insights that every agent can implement.
Whether discussing the balance between caring and remaining professionally detached or the pivotal role of face-to-face interactions, the conversations align around creating value and achieving win-win outcomes.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Tom Panos (00:03):
Tom Panos, john McGrath, troy Malcolm,
million-dollar agent post-grandfinal.
What a great feeling it is toknow that all our three teams
weren't in the grand final.
The Roosters and the Rabbitsare no better than the Tigers.
You watched it from thesidelines.
By the way, troisy, I don'tknow if John told you we had a
(00:25):
nice lunch with the state ofwell, I think he's going to be
the ex-state of origin coachbecause he can't keep both jobs.
Is that right, john?
I never asked him that.
John McGrath (00:37):
Yeah, michael Maguire.
So yeah, nowadays, nationalcoaching jobs and state coaching
jobs are pretty much exclusiveand they don't use a lot.
The old days, you know, youused to have to coach a club
team and then the state, butthat's finished.
So, michael Maguire, we justcaught up with him briefly
before he goes to Queensland.
So shout out to all ourQueenslanders we think you're
(00:59):
getting a really if you're aBroncos fan, we think you're
getting a really great coach upthere.
I had the pleasure of workingon the board of Souths for half
a dozen years while MichaelMaguire was there and, of course
, we won the grand final in 14,and he's a terrific fellow and a
great coach.
So, yeah, best wishes toMichael and best wishes to
Broncos for next year.
I think you know they're one ofthe great teams in history,
(01:23):
broncos, and I think he willbring the best out of it.
Tom Panos (01:27):
Okay, so we've got about two to three months before
Christmas and there's so manysubjects we can talk about every
week.
There's one we don't talk aboutoften enough negotiation.
Yet it is such a big part of areal estate agent's life If you
actually think about it.
(01:47):
They're negotiating pretty muchall day, every day.
So what are they negotiating inreal estate?
Well, for a start, you'renegotiating your fee.
You're negotiating prices withbuyers.
You're negotiating the conceptto a vendor that we should
realign the price of yourproperty.
(02:07):
We'll get more buyers that'llcome through it.
We're negotiating gettingmarketing campaigns.
So negotiation is somethingthat is critical in the work of
a real estate agent.
So we're going to dig deep onthis.
Troy John, you reckonnegotiators are born or they're
(02:28):
made.
John McGrath (02:31):
I think, like anything, tom, or certainly most
things we discuss, it's allabout being made and adopting a
skill.
I think negotiation isabsolutely no different.
Anyone can be a betternegotiator, for sure, and most
people can be an extremely goodnegotiator.
I think it's just like playinga game of golf If you're serious
about learning to be good at itand practice, then you'll
(02:54):
become really good.
So I think today you know ourgoal choice try and share with
our listeners.
You know half a dozen, maybe,tips of things that we've all
picked up along the way, because, as we were just saying off air
, tom, before we started, youknow negotiation is really.
I mean, I know you mentionedmarketing, tommy, and
negotiation, but marketing,arguably, could be provided by
(03:17):
anyone, including vendors coulduse it themselves.
But if you're looking to setyourself aside from all the
other agents, your ability toextract the best outcome on
their behalf is really the onemain skill that people are
paying for, because anyone canadvertise a property, anyone can
show a property, most people doa good job describing the
benefits of owning a property,but who is the agent that can
(03:41):
actually get the best outcomefor the vendors and I think
that's what we're going to talkabout today is you know what are
some of the things you can doto obtain that best outcome.
Tom Panos (03:52):
Okay, so on my screen , which obviously our listeners
can't see, I've actually gotfive or six bullet points and we
can touch on those and then wecan all add and extend on those,
and Troy will have a view on onsome and John will as well.
But starting off with using thepause, using the pause, and
(04:17):
whenever we've had a greatspeaker at ARIC that's touched
on the subject of negotiation,and there's another better than
chris voss, probably the best inthe world, uh, and this comes
from some of the great agentsI've I've I've had, I had brad.
Brad pillinger said to me theother day.
He said if you read, uh, thebook by chris voss, um, never
(04:41):
split the difference.
He said that is an all-timeclassic.
He goes.
I've read it many, many times.
He goes.
It is just so good.
But he talks about using thepause and often people have got
this incredible need and desireto actually have to answer
everything.
A buyer says, oh, the bedroomsare a bit too small, and then
(05:02):
someone jumps in and says, oh,no, but blah, blah, blah, blah
and the whole commission breathtalk starts.
Often using the pause andsilence is a very way to
actually handle in a negotiation.
Love to get your views on whyyou think that that's so
effective.
John McGrath (05:21):
Yeah, I mean I might kick off Troisy because a
few things I've probably sort oflearned over the years.
I know you and I have discussedthese before and I hope, or I
expect, you'll probably agreethat you might have some others.
The first one is I read a bookmany years ago and I actually
met the author, herb Cohen, inthe Regent Hotel once upon a
time.
He wrote a book and I recommendit, just like the Chris Voss
(05:43):
book.
This is an oldie but a goodiecalled you can negotiate
anything.
He was a, a jewish new yorker,who was kind of an expert,
expert in um, in negotiation,and the one thing that stood out
for me was um.
That I remember.
When I met him at the regionhotel he said it to me and when
I asked him, what's your numberone, mr cohen?
What's your number one, mrCohen?
What's your number one tip?
(06:04):
He said care, but not that much.
And when you read about it inthe book, it doesn't mean be
arrogant or complacent or abully, it just means that you've
got to detach yourself from theoutcome.
And, tommy, you use the wordall the time beautifully, or the
phrase called commission breath.
The needier you are, the moreyou kind of want the deal and
(06:24):
people can sense it the lessleverage and the less power you
have in that negotiation.
The most powerful person in anynegotiation is the one that is
prepared to walk away.
Whether you're a buyer or aseller, it really makes no
difference.
So you know, again, one has tobe careful because sometimes you
do need a deal, especially ifyou're representing a vendor
who's somewhat in the background, desperate to get the sale done
(06:48):
.
They might have pressure,especially nowadays, they might
have pressure bearing down fromtheir lenders and so forth.
But again, the way to get whichis one of the reasons, by the
way, that I hate when agents putmortgagee sale and vendor must
sell that sort of thing.
You know, I think if it is adeceased estate or a mortgagee
sale, I think it's okay to putthat.
(07:09):
But I see this all the timeVendor must sell and it just
takes away any bargaining power,any negotiation power.
So the first one that I'd sharewould be care, but not that
much.
Just be cool and calm and youhave to signal that unless the
right figure is reached, you'vegot a preparedness to walk away
(07:30):
and and a plan b if you will.
That'd be the first one, um.
A second one, tommy.
I think product knowledge,knowledge of the information,
knowing of knowledge of thesituation is really important.
So how does does that work?
Product knowledge is if youactually have some really
rock-solid data about why it isabsolutely logical, plausible,
(07:53):
to be transacting at this priceand you can relay that.
It really helps because buyersbuy emotionally and they want to
sort of satisfy it with somelogic.
So even if they kind of feelthey're paying a premium, if you
can say look, here's thisproperty.
It went at 1,200 square metres.
It was facing south.
The one you're buying today hasgot 1,450 square metres.
(08:16):
It's rear to north and it's gotapproval to extend up another
level and you can give them somerationale to pay the premium
that you're seeking, becausewe're always in a position we
should be seeking a premium inevery negotiation.
So I think you know your intelabout it.
I mean you might pick up fromconversation that they've sold.
(08:36):
We had one recently and we soldit for $43.5 million.
So it actually works, tom, inevery price range.
But the buyer said look, I'vejust sold my property for 80
million in Bellevue Hill andthey told our agent that they
really didn't want to rent, theyjust wanted to buy and move
straight into something andthere was a timeline of eight
(08:58):
weeks.
So our agent utilised anddidn't take advantage of it, but
knew that that was a preferredpart of the deal.
They didn't want to rent.
So he really got in hishustings and he found someone
that he'd sold the properties topreviously that was prepared to
transact.
So I think, uh, that'simportant.
Third one, troy, let the silencedo the heavy lifting, which is
what you just mentioned.
(09:19):
Tommy, I think, um, yeah, pause, um, utilizing asking, one of
the you know, schoolboy erasthat happens so much in our
industry is asking a closingquestion and then answering or
adding to it, rather thanletting the the other side of
the negotiation.
So you know whether it's askingfor a listing or whether it's
(09:43):
asking for your full 2.5 percentor whether it's asking for, you
know, full asking price on aproperty, whatever it might be.
I think it's really critical,once you've asked a question, to
let that go.
Pickle, sorry, my little dashhand is ripping up the carpet.
Pickle, stop it honey.
Last one, last one, and then,Troy, I'm sure you'll have
(10:04):
something to add.
It's kind of combined two intoone.
The first one I just jotted downhere when we were talking is um
, always let them save face.
So, negotiation, you want, youwant the other side of the
transaction to walk away feelingokay about it.
You don't want people feelingthat you know you've squeezed
every skerrick of oxygen out ofin the transaction.
(10:27):
So you know, I always I'lloften say to somebody Tom, why
don't you have a little chat,I'll walk outside.
I know you love the home and Ireally recommend that we need to
come in a full price to to becompetitive or we're going to
lose it.
But you guys, I want you tofeel comfortable with it.
So I'm just going to walk intothe garden and you just let me
know when you're ready.
So I always kind of walk out.
(10:48):
I never want someone to feellike they're being pressured.
And again, that's a bit of thecare, but not that much as well
that I'm not here and I'm nottrying to bully you into a
decision, because I'd never dothat.
It just doesn't work.
And if you're playing the longgame, um, and the last one which
is a part of that, troy, is, Ithink negotiation to a large
degree doesn't have that much todo with money.
(11:09):
Rarely is it that a buyer won'tpay another cent because they
don't have another cent, it'smore likely that you've offended
them in the negotiation, thatthey don't want to be seen as
being foolish and overpaying fora property or whatever it is.
So it's often more about egoand fear than it is about, oh,
(11:31):
that buyer, because don't tellme, someone that offered 1.25
couldn't pay 1.25 too if theyreally had to.
There's always a little bitmore that you can get, make and
pay.
So I think that again, again,it's about making people feel
comfortable that it's theirdecision, giving them the
information so they can make thedecision wisely without being a
(11:55):
fool.
Um, so, giving them that sortof advice.
You mentioned, tommy, before,and I'll finish and I'll shut up
now, troy, but never split thedifference.
Who we had at eric chris voss,many years ago, great speech,
great book, great YouTube clips.
If you want to go on and it'sfunny, you know, because many,
many a transaction, I split thedifference, or nearly split the
(12:16):
difference over the years,because sometimes you know I'm
not going to say it's the bestway to do it, but sometimes you
know, know it does bring thingstogether.
But here's, here's a little tipthat will get you many, many
deals going forward if you adoptit, if you haven't done it
before.
I've got an offer of $2 million.
The vendor wants $2.1 millionand I say this Tommy, you need
(12:38):
to work with me here.
I know you love the home, Iknow you guys want to be there
and I can get your family movedin by Christmas if you work with
me.
But you need to sort of comewith me on this.
Obviously, they're at $2.1million and you're at $2 million
and they'd like to get thewhole $2.1 million and you'd
like to get the whole 2.1 andyou'd like to buy it at 2.
I get all that, but we need tobudge if we're going to get the
deal done.
Come up with me and you know,often these situations can be
(13:02):
resolved, or nearby resolved, bysplitting the difference, which
would mean they come down to$2.5 million and you come up.
Here's what I'm going to ask.
I'm going to ask you to investanother $5,000 on top of a
splitting the differencestrategy.
I want you to give me a firmoffer on a contract of
$2,055,000.
Then I can go back to them andI can, in good faith, sell the
(13:24):
fact that you've worked hard toget your best outcome, and then
I'll reverse that.
When I go and speak to thevendor I'll say, troy, you know
you're probably thinking that'sa possibility, I could come back
and suggest that we'll get thedeal done if we split the
difference.
But the buyer has actually comeup above that and they've come
up 55.
So you only need to come down45 and then it's done and you're
(13:46):
out of here by Christmas andyou don't have any more
inspections and any more hasslesand any more stress.
So again, just you know, if youdo have to have end up in a
scenario where perhaps sharingthe upside and the downside or
splitting the difference is thebest way, always try and get
your buyer another $5,000 or$10,000 above the difference to
(14:06):
show the vendor in good faith.
They've made it easier for thevendor to say yes, troy, what
have I missed?
Just?
Troy Malcolm (14:14):
a couple of points to add, john, to what you
mentioned.
What I've noticed the very bestreal estate negotiators.
First one is they really listento understand.
They listen to understand whythey feel like the buyer should
potentially come up, why theyfeel like their property is
worth more, and on the reverseside, they seek clarity on why
the purchaser is only preparedto go to a certain level.
(14:35):
So they do that really clearly.
Now to double down on that mostof them, nearly all of them, do
it face-to-face Now, whetherthat be in-person, physically or
digitally.
They really like the idea ofthe concept of seeing the person
interacting with them.
It's very easy to hide behind aphone, so they really want to
have that, and via text messageit can be interpreted so many
(14:58):
different ways.
So the video call or the powerof being face-to-face, and
that's why we see so many timesauctions come together, maybe if
they pass in on the auctionfloor, they normally get a
negotiation or a negotiated salepretty quickly after if both
parties are still hanging around.
John McGrath (15:14):
Sorry to jump in, but that's a good point.
I mean, one of the reasons thatauctions can often work so well
is for both sides.
There's the immediacy and thefact that it's done.
No more building reports, nomore negotiation.
You buyer or you seller, orboth, clearly agree on a price
here and now during the auction.
(15:36):
The deal's done, you'll be inin six weeks, you'll be out in
six weeks.
And I think you're right.
That's a very good reason.
And I used to use the metaphorand I forgot what was that show
that Eddie McGuire used to doabout?
He handed people a cheque.
He wants to be a millionaire,yeah, there you go.
So you often see people say, oh, you know, I think I'll go on.
(16:02):
And then you see eddie take outhis pen.
You'd sign a check for 20 000.
He'd hand him a check.
He'd say there you go.
And so many times you'd see himlook at it and it was theirs.
And they saw money in the bankand they said eddie, I'm going
to take the money.
And the same happens innegotiations.
Tom, you know, you get peoplewhen they got the money in the
hand, they can see it in theiraccount.
So again, you know, obviously,troy, you know, I know you coach
your team all the time on.
It is, you know, wheneverpossible face to face.
But even more importantly iswritten contracts with deposit
(16:25):
paid so the deal is closed ifthe vendor says yes.
It's a very different powerthan saying you know, if you say
yes, then I'll contact them,we'll get a contract.
They want to get a buildingreport.
They'll need a few days.
That doesn't have the sameattractiveness to Troy.
If you say yes right now, I'lljust get you to approve the
bottom of the contract and it'sdone and you're over and you're
(16:47):
finished.
That has a lot of power as wellIn a negotiation.
It certainly helps.
You know, get both sides and,by the way, tom, I do that just
as much with the flip side.
Going back to a buyer, becausequite a few agents do with the
seller, take a written contractbut I like to take the seller's
written contract.
So if they're at, you know twomillion and I've got a seller at
(17:09):
two one, I'll get the vendorsigned at two one.
Go back to the buyer and sayit's yours.
All you got to do is initialyour two million, pop another
one on the second digit thereand you'll own this and the
number of times that's helpedget a deal over the line both
sides.
Sorry, troy, keep going.
Troy Malcolm (17:25):
Well, I was just going to say, john, the example
you did live as well just beforewas my second or third point,
which was the tonality.
So the tonality in which youdeliver a negotiation can
actually make or break thenegotiation.
If you go in too hard andaggressive, then you're more
likely to lose that negotiation.
If you go and you have thatreally make them feel important
(17:47):
mindset, you're more likely toget that scenario where you do
have a positive outcome for bothparties.
So thing for everyone.
We know that one of the key tocommunication, the key tools
that we have in our arsenal, isthe tonality in which we deliver
.
And then the last one that Ijust wanted to add in was have
that it's my pleasure attitudewith everything.
It's never too hard If anegotiation is drawn out, it's
(18:10):
never too hard.
It's my pleasure to help.
How else can I help you?
And I think, if you go, thatthe law of reciprocity actually
plays a lot in our favor.
So those are the key points,john, that I've jotted down on
other stuff that we've discussedwith our team over the years.
But I definitely believe thatface-to-face, really seeking to
clarify why people are preparedto negotiate where they're up,
(18:31):
to make them feel important withthe tonality in which you
deliver and then have it as a mypleasure attitude is really
going to set you apart.
When you're negotiating withboth buyer and seller and
actually anyone, even colleagues, competing agents, team members
it really makes a differenceout there in the field and
another little one, tom, just toadd before we throw back to you
is um, remember, thenegotiation is not just about
(18:53):
money.
John McGrath (18:54):
It, you know, it could be about timing.
I can get you a six-monthsettlement which takes the
pressure off and allows you tosell your property.
It could be about inclusions.
You know I've won and lostdeals because of inclusion.
Sometimes Vendor says they wantto take the dishwasher and the
buyer said, well, hang on, theirdishwasher always remains.
(19:15):
So you know, can win or lose adeal.
Sometimes it's about, you know,a lesser deposit.
Sometimes it's about a greaterdeposit and releasing that
deposit to the vendor.
So instead of $200,000 deposit,we've got a $500,000 deposit
and they've allowed us to tellyou that that can be released on
exchange of contracts, exceptfor my commission, of course.
(19:38):
Um and um, and that can beattractive, especially if you
know the vendor has got a bit ofa cash flow issue which might
be driving the sale.
So I think, yeah, very much.
Remember that it's.
Tom Panos (19:50):
It's primarily about money, but never exclusively
about money yeah, and as wefinish off, I'm gonna fit it
finish with a case study ofmichael tringali, who I bought
my everything that used, noteverything.
80 of what you both coveredthere was done by michael
tringali in the purchase of thehome that I live in in aberfield
(20:13):
.
Like he actually turned aroundand he said to me if you're
prepared to sign that contractand give me a deposit, I'm
prepared to go to their hometonight on Christmas Eve to do
it Right.
So if you do that, I'll do thisRight.
At the time we'll just go andsee if you get it wrapped up and
(20:35):
I'll give you, I'll give youthe deposit.
He turned around.
He said load my gun with somebullets, tom, you're going to
send me there with nothing.
Sign a contract with thecheques so I can do the.
Who wants to be a millionaireclient?
You're just there.
And then the last thing Inoticed is just talking to
(20:56):
Maguire over that lunch.
John, when I look at some ofthe stories that he shared
himself or with players,whenever there was something
that was negotiated, he said ohno, got on a plane and go over
and see them personally, right,I think there are so many things
Now, listen, I totally get it.
We've got Zoom and we've gotFaceTime, we've got phone calls.
(21:20):
But there are certain things inlife that will end up having a
higher probability of happeningif you're eyeball to eyeball,
voice to voice, skin to skin,and getting offers accepted is
one of those things.
This thing about you know I'lltext them, oh, we've got an
increase of 2 million and 50,see whether they'll take that
right.
(21:40):
That's totally different togoing over there and seeing them
and saying, hey, I want to letyou know.
The offer is $2,060,000.
They've borrowed $10,000 moreoff the mother-in-law.
That's why it's $2,061,000.
Who was the trainer?
I hate mentioning his name, butit was one of the few things I
actually got.
I mean was Neil Jenman.
(22:00):
I did a course from beginner towinner 40 years ago and Jenman
said at the time he goes, whatyou want to do is, when you get
an increase of offer, get it offat an odd number, because
(22:20):
people will turn around and say,well, if you've got 850, why
couldn't you have got 853 or 200?
So I just think if there's oneskill that an agent should move
themselves from a 7 out of 10 toa 10 out of 10, it's going to
help them in every aspect ofreal estate, including
everything I've just shown upthere on the screen that you
can't see.
(22:40):
It'll help you actuallynegotiate.
You'll be able to prove yourvalue as a negotiator, to get a
better fee.
You'll be able to help yourvendors get higher prices if you
can negotiate well.
But yeah, look, it's awonderful subject and all I can
say my experience with realestate agents that are good
negotiators they're notdesperate.
And why aren't they desperate?
(23:04):
Because they've got a lot ofballs up in the air at any one
time, so they're not dependenton this one thing going off.
Right, they've got lots oflisting presentations, they're
dealing with lots of buyers, sothey don't have all their hopes
built on this one thing goingoff.
And that's probably one of thereal secrets to being a good
negotiator be a good prospector.
John McGrath (23:25):
If you're a good prospector, you'll always have
lots of opportunities.
Tom Panos (23:28):
Volume negates luck.
Tommy Volume negates luck.
I love that.
Volume negates luck.
That's got to be written downafter here.
I'll use that a thousand timesin the next two years.
All right, thanks.
John McGrath (23:37):
Tony.
Tom Panos (23:38):
Another episode, another rugby league season,
another AFL season.
Daylight saving for lots ofAustralia.
Enjoy it.
John McGrath (23:49):
Signing off.
See you guys, see you team.
Tom Panos, john McGrath, troy Malcolm,
million-dollar agent post-grandfinal.
What a great feeling it is toknow that all our three teams
weren't in the grand final.
The Roosters and the Rabbitsare no better than the Tigers.
You watched it from thesidelines.
By the way, troisy, I don'tknow if John told you we had a
(00:25):
nice lunch with the state ofwell, I think he's going to be
the ex-state of origin coachbecause he can't keep both jobs.
Is that right, john?
I never asked him that.
John McGrath (00:37):
Yeah, michael Maguire.
So yeah, nowadays, nationalcoaching jobs and state coaching
jobs are pretty much exclusiveand they don't use a lot.
The old days, you know, youused to have to coach a club
team and then the state, butthat's finished.
So, michael Maguire, we justcaught up with him briefly
before he goes to Queensland.
So shout out to all ourQueenslanders we think you're
(00:59):
getting a really if you're aBroncos fan, we think you're
getting a really great coach upthere.
I had the pleasure of workingon the board of Souths for half
a dozen years while MichaelMaguire was there and, of course
, we won the grand final in 14,and he's a terrific fellow and a
great coach.
So, yeah, best wishes toMichael and best wishes to
Broncos for next year.
I think you know they're one ofthe great teams in history,
(01:23):
broncos, and I think he willbring the best out of it.
Tom Panos (01:27):
Okay, so we've got about two to three months before
Christmas and there's so manysubjects we can talk about every
week.
There's one we don't talk aboutoften enough negotiation.
Yet it is such a big part of areal estate agent's life If you
actually think about it.
(01:47):
They're negotiating pretty muchall day, every day.
So what are they negotiating inreal estate?
Well, for a start, you'renegotiating your fee.
You're negotiating prices withbuyers.
You're negotiating the conceptto a vendor that we should
realign the price of yourproperty.
(02:07):
We'll get more buyers that'llcome through it.
We're negotiating gettingmarketing campaigns.
So negotiation is somethingthat is critical in the work of
a real estate agent.
So we're going to dig deep onthis.
Troy John, you reckonnegotiators are born or they're
(02:28):
made.
John McGrath (02:31):
I think, like anything, tom, or certainly most
things we discuss, it's allabout being made and adopting a
skill.
I think negotiation isabsolutely no different.
Anyone can be a betternegotiator, for sure, and most
people can be an extremely goodnegotiator.
I think it's just like playinga game of golf If you're serious
about learning to be good at itand practice, then you'll
(02:54):
become really good.
So I think today you know ourgoal choice try and share with
our listeners.
You know half a dozen, maybe,tips of things that we've all
picked up along the way, because, as we were just saying off air
, tom, before we started, youknow negotiation is really.
I mean, I know you mentionedmarketing, tommy, and
negotiation, but marketing,arguably, could be provided by
(03:17):
anyone, including vendors coulduse it themselves.
But if you're looking to setyourself aside from all the
other agents, your ability toextract the best outcome on
their behalf is really the onemain skill that people are
paying for, because anyone canadvertise a property, anyone can
show a property, most people doa good job describing the
benefits of owning a property,but who is the agent that can
(03:41):
actually get the best outcomefor the vendors and I think
that's what we're going to talkabout today is you know what are
some of the things you can doto obtain that best outcome.
Tom Panos (03:52):
Okay, so on my screen , which obviously our listeners
can't see, I've actually gotfive or six bullet points and we
can touch on those and then wecan all add and extend on those,
and Troy will have a view on onsome and John will as well.
But starting off with using thepause, using the pause, and
(04:17):
whenever we've had a greatspeaker at ARIC that's touched
on the subject of negotiation,and there's another better than
chris voss, probably the best inthe world, uh, and this comes
from some of the great agentsI've I've I've had, I had brad.
Brad pillinger said to me theother day.
He said if you read, uh, thebook by chris voss, um, never
(04:41):
split the difference.
He said that is an all-timeclassic.
He goes.
I've read it many, many times.
He goes.
It is just so good.
But he talks about using thepause and often people have got
this incredible need and desireto actually have to answer
everything.
A buyer says, oh, the bedroomsare a bit too small, and then
(05:02):
someone jumps in and says, oh,no, but blah, blah, blah, blah
and the whole commission breathtalk starts.
Often using the pause andsilence is a very way to
actually handle in a negotiation.
Love to get your views on whyyou think that that's so
effective.
John McGrath (05:21):
Yeah, I mean I might kick off Troisy because a
few things I've probably sort oflearned over the years.
I know you and I have discussedthese before and I hope, or I
expect, you'll probably agreethat you might have some others.
The first one is I read a bookmany years ago and I actually
met the author, herb Cohen, inthe Regent Hotel once upon a
time.
He wrote a book and I recommendit, just like the Chris Voss
(05:43):
book.
This is an oldie but a goodiecalled you can negotiate
anything.
He was a, a jewish new yorker,who was kind of an expert,
expert in um, in negotiation,and the one thing that stood out
for me was um.
That I remember.
When I met him at the regionhotel he said it to me and when
I asked him, what's your numberone, mr cohen?
What's your number one, mrCohen?
What's your number one tip?
(06:04):
He said care, but not that much.
And when you read about it inthe book, it doesn't mean be
arrogant or complacent or abully, it just means that you've
got to detach yourself from theoutcome.
And, tommy, you use the wordall the time beautifully, or the
phrase called commission breath.
The needier you are, the moreyou kind of want the deal and
(06:24):
people can sense it the lessleverage and the less power you
have in that negotiation.
The most powerful person in anynegotiation is the one that is
prepared to walk away.
Whether you're a buyer or aseller, it really makes no
difference.
So you know, again, one has tobe careful because sometimes you
do need a deal, especially ifyou're representing a vendor
who's somewhat in the background, desperate to get the sale done
(06:48):
.
They might have pressure,especially nowadays, they might
have pressure bearing down fromtheir lenders and so forth.
But again, the way to get whichis one of the reasons, by the
way, that I hate when agents putmortgagee sale and vendor must
sell that sort of thing.
You know, I think if it is adeceased estate or a mortgagee
sale, I think it's okay to putthat.
(07:09):
But I see this all the timeVendor must sell and it just
takes away any bargaining power,any negotiation power.
So the first one that I'd sharewould be care, but not that
much.
Just be cool and calm and youhave to signal that unless the
right figure is reached, you'vegot a preparedness to walk away
(07:30):
and and a plan b if you will.
That'd be the first one, um.
A second one, tommy.
I think product knowledge,knowledge of the information,
knowing of knowledge of thesituation is really important.
So how does does that work?
Product knowledge is if youactually have some really
rock-solid data about why it isabsolutely logical, plausible,
(07:53):
to be transacting at this priceand you can relay that.
It really helps because buyersbuy emotionally and they want to
sort of satisfy it with somelogic.
So even if they kind of feelthey're paying a premium, if you
can say look, here's thisproperty.
It went at 1,200 square metres.
It was facing south.
The one you're buying today hasgot 1,450 square metres.
(08:16):
It's rear to north and it's gotapproval to extend up another
level and you can give them somerationale to pay the premium
that you're seeking, becausewe're always in a position we
should be seeking a premium inevery negotiation.
So I think you know your intelabout it.
I mean you might pick up fromconversation that they've sold.
(08:36):
We had one recently and we soldit for $43.5 million.
So it actually works, tom, inevery price range.
But the buyer said look, I'vejust sold my property for 80
million in Bellevue Hill andthey told our agent that they
really didn't want to rent, theyjust wanted to buy and move
straight into something andthere was a timeline of eight
(08:58):
weeks.
So our agent utilised anddidn't take advantage of it, but
knew that that was a preferredpart of the deal.
They didn't want to rent.
So he really got in hishustings and he found someone
that he'd sold the properties topreviously that was prepared to
transact.
So I think, uh, that'simportant.
Third one, troy, let the silencedo the heavy lifting, which is
what you just mentioned.
(09:19):
Tommy, I think, um, yeah, pause, um, utilizing asking, one of
the you know, schoolboy erasthat happens so much in our
industry is asking a closingquestion and then answering or
adding to it, rather thanletting the the other side of
the negotiation.
So you know whether it's askingfor a listing or whether it's
(09:43):
asking for your full 2.5 percentor whether it's asking for, you
know, full asking price on aproperty, whatever it might be.
I think it's really critical,once you've asked a question, to
let that go.
Pickle, sorry, my little dashhand is ripping up the carpet.
Pickle, stop it honey.
Last one, last one, and then,Troy, I'm sure you'll have
(10:04):
something to add.
It's kind of combined two intoone.
The first one I just jotted downhere when we were talking is um
, always let them save face.
So, negotiation, you want, youwant the other side of the
transaction to walk away feelingokay about it.
You don't want people feelingthat you know you've squeezed
every skerrick of oxygen out ofin the transaction.
(10:27):
So you know, I always I'lloften say to somebody Tom, why
don't you have a little chat,I'll walk outside.
I know you love the home and Ireally recommend that we need to
come in a full price to to becompetitive or we're going to
lose it.
But you guys, I want you tofeel comfortable with it.
So I'm just going to walk intothe garden and you just let me
know when you're ready.
So I always kind of walk out.
(10:48):
I never want someone to feellike they're being pressured.
And again, that's a bit of thecare, but not that much as well
that I'm not here and I'm nottrying to bully you into a
decision, because I'd never dothat.
It just doesn't work.
And if you're playing the longgame, um, and the last one which
is a part of that, troy, is, Ithink negotiation to a large
degree doesn't have that much todo with money.
(11:09):
Rarely is it that a buyer won'tpay another cent because they
don't have another cent, it'smore likely that you've offended
them in the negotiation, thatthey don't want to be seen as
being foolish and overpaying fora property or whatever it is.
So it's often more about egoand fear than it is about, oh,
(11:31):
that buyer, because don't tellme, someone that offered 1.25
couldn't pay 1.25 too if theyreally had to.
There's always a little bitmore that you can get, make and
pay.
So I think that again, again,it's about making people feel
comfortable that it's theirdecision, giving them the
information so they can make thedecision wisely without being a
(11:55):
fool.
Um, so, giving them that sortof advice.
You mentioned, tommy, before,and I'll finish and I'll shut up
now, troy, but never split thedifference.
Who we had at eric chris voss,many years ago, great speech,
great book, great YouTube clips.
If you want to go on and it'sfunny, you know, because many,
many a transaction, I split thedifference, or nearly split the
(12:16):
difference over the years,because sometimes you know I'm
not going to say it's the bestway to do it, but sometimes you
know, know it does bring thingstogether.
But here's, here's a little tipthat will get you many, many
deals going forward if you adoptit, if you haven't done it
before.
I've got an offer of $2 million.
The vendor wants $2.1 millionand I say this Tommy, you need
(12:38):
to work with me here.
I know you love the home, Iknow you guys want to be there
and I can get your family movedin by Christmas if you work with
me.
But you need to sort of comewith me on this.
Obviously, they're at $2.1million and you're at $2 million
and they'd like to get thewhole $2.1 million and you'd
like to get the whole 2.1 andyou'd like to buy it at 2.
I get all that, but we need tobudge if we're going to get the
deal done.
Come up with me and you know,often these situations can be
(13:02):
resolved, or nearby resolved, bysplitting the difference, which
would mean they come down to$2.5 million and you come up.
Here's what I'm going to ask.
I'm going to ask you to investanother $5,000 on top of a
splitting the differencestrategy.
I want you to give me a firmoffer on a contract of
$2,055,000.
Then I can go back to them andI can, in good faith, sell the
(13:24):
fact that you've worked hard toget your best outcome, and then
I'll reverse that.
When I go and speak to thevendor I'll say, troy, you know
you're probably thinking that'sa possibility, I could come back
and suggest that we'll get thedeal done if we split the
difference.
But the buyer has actually comeup above that and they've come
up 55.
So you only need to come down45 and then it's done and you're
(13:46):
out of here by Christmas andyou don't have any more
inspections and any more hasslesand any more stress.
So again, just you know, if youdo have to have end up in a
scenario where perhaps sharingthe upside and the downside or
splitting the difference is thebest way, always try and get
your buyer another $5,000 or$10,000 above the difference to
(14:06):
show the vendor in good faith.
They've made it easier for thevendor to say yes, troy, what
have I missed?
Just?
Troy Malcolm (14:14):
a couple of points to add, john, to what you
mentioned.
What I've noticed the very bestreal estate negotiators.
First one is they really listento understand.
They listen to understand whythey feel like the buyer should
potentially come up, why theyfeel like their property is
worth more, and on the reverseside, they seek clarity on why
the purchaser is only preparedto go to a certain level.
(14:35):
So they do that really clearly.
Now to double down on that mostof them, nearly all of them, do
it face-to-face Now, whetherthat be in-person, physically or
digitally.
They really like the idea ofthe concept of seeing the person
interacting with them.
It's very easy to hide behind aphone, so they really want to
have that, and via text messageit can be interpreted so many
(14:58):
different ways.
So the video call or the powerof being face-to-face, and
that's why we see so many timesauctions come together, maybe if
they pass in on the auctionfloor, they normally get a
negotiation or a negotiated salepretty quickly after if both
parties are still hanging around.
John McGrath (15:14):
Sorry to jump in, but that's a good point.
I mean, one of the reasons thatauctions can often work so well
is for both sides.
There's the immediacy and thefact that it's done.
No more building reports, nomore negotiation.
You buyer or you seller, orboth, clearly agree on a price
here and now during the auction.
(15:36):
The deal's done, you'll be inin six weeks, you'll be out in
six weeks.
And I think you're right.
That's a very good reason.
And I used to use the metaphorand I forgot what was that show
that Eddie McGuire used to doabout?
He handed people a cheque.
He wants to be a millionaire,yeah, there you go.
So you often see people say, oh, you know, I think I'll go on.
(16:02):
And then you see eddie take outhis pen.
You'd sign a check for 20 000.
He'd hand him a check.
He'd say there you go.
And so many times you'd see himlook at it and it was theirs.
And they saw money in the bankand they said eddie, I'm going
to take the money.
And the same happens innegotiations.
Tom, you know, you get peoplewhen they got the money in the
hand, they can see it in theiraccount.
So again, you know, obviously,troy, you know, I know you coach
your team all the time on.
It is, you know, wheneverpossible face to face.
But even more importantly iswritten contracts with deposit
(16:25):
paid so the deal is closed ifthe vendor says yes.
It's a very different powerthan saying you know, if you say
yes, then I'll contact them,we'll get a contract.
They want to get a buildingreport.
They'll need a few days.
That doesn't have the sameattractiveness to Troy.
If you say yes right now, I'lljust get you to approve the
bottom of the contract and it'sdone and you're over and you're
(16:47):
finished.
That has a lot of power as wellIn a negotiation.
It certainly helps.
You know, get both sides and,by the way, tom, I do that just
as much with the flip side.
Going back to a buyer, becausequite a few agents do with the
seller, take a written contractbut I like to take the seller's
written contract.
So if they're at, you know twomillion and I've got a seller at
(17:09):
two one, I'll get the vendorsigned at two one.
Go back to the buyer and sayit's yours.
All you got to do is initialyour two million, pop another
one on the second digit thereand you'll own this and the
number of times that's helpedget a deal over the line both
sides.
Sorry, troy, keep going.
Troy Malcolm (17:25):
Well, I was just going to say, john, the example
you did live as well just beforewas my second or third point,
which was the tonality.
So the tonality in which youdeliver a negotiation can
actually make or break thenegotiation.
If you go in too hard andaggressive, then you're more
likely to lose that negotiation.
If you go and you have thatreally make them feel important
(17:47):
mindset, you're more likely toget that scenario where you do
have a positive outcome for bothparties.
So thing for everyone.
We know that one of the key tocommunication, the key tools
that we have in our arsenal, isthe tonality in which we deliver
.
And then the last one that Ijust wanted to add in was have
that it's my pleasure attitudewith everything.
It's never too hard If anegotiation is drawn out, it's
(18:10):
never too hard.
It's my pleasure to help.
How else can I help you?
And I think, if you go, thatthe law of reciprocity actually
plays a lot in our favor.
So those are the key points,john, that I've jotted down on
other stuff that we've discussedwith our team over the years.
But I definitely believe thatface-to-face, really seeking to
clarify why people are preparedto negotiate where they're up,
(18:31):
to make them feel important withthe tonality in which you
deliver and then have it as a mypleasure attitude is really
going to set you apart.
When you're negotiating withboth buyer and seller and
actually anyone, even colleagues, competing agents, team members
it really makes a differenceout there in the field and
another little one, tom, just toadd before we throw back to you
is um, remember, thenegotiation is not just about
(18:53):
money.
John McGrath (18:54):
It, you know, it could be about timing.
I can get you a six-monthsettlement which takes the
pressure off and allows you tosell your property.
It could be about inclusions.
You know I've won and lostdeals because of inclusion.
Sometimes Vendor says they wantto take the dishwasher and the
buyer said, well, hang on, theirdishwasher always remains.
(19:15):
So you know, can win or lose adeal.
Sometimes it's about, you know,a lesser deposit.
Sometimes it's about a greaterdeposit and releasing that
deposit to the vendor.
So instead of $200,000 deposit,we've got a $500,000 deposit
and they've allowed us to tellyou that that can be released on
exchange of contracts, exceptfor my commission, of course.
(19:38):
Um and um, and that can beattractive, especially if you
know the vendor has got a bit ofa cash flow issue which might
be driving the sale.
So I think, yeah, very much.
Remember that it's.
Tom Panos (19:50):
It's primarily about money, but never exclusively
about money yeah, and as wefinish off, I'm gonna fit it
finish with a case study ofmichael tringali, who I bought
my everything that used, noteverything.
80 of what you both coveredthere was done by michael
tringali in the purchase of thehome that I live in in aberfield
(20:13):
.
Like he actually turned aroundand he said to me if you're
prepared to sign that contractand give me a deposit, I'm
prepared to go to their hometonight on Christmas Eve to do
it Right.
So if you do that, I'll do thisRight.
At the time we'll just go andsee if you get it wrapped up and
(20:35):
I'll give you, I'll give youthe deposit.
He turned around.
He said load my gun with somebullets, tom, you're going to
send me there with nothing.
Sign a contract with thecheques so I can do the.
Who wants to be a millionaireclient?
You're just there.
And then the last thing Inoticed is just talking to
(20:56):
Maguire over that lunch.
John, when I look at some ofthe stories that he shared
himself or with players,whenever there was something
that was negotiated, he said ohno, got on a plane and go over
and see them personally, right,I think there are so many things
Now, listen, I totally get it.
We've got Zoom and we've gotFaceTime, we've got phone calls.
(21:20):
But there are certain things inlife that will end up having a
higher probability of happeningif you're eyeball to eyeball,
voice to voice, skin to skin,and getting offers accepted is
one of those things.
This thing about you know I'lltext them, oh, we've got an
increase of 2 million and 50,see whether they'll take that
right.
(21:40):
That's totally different togoing over there and seeing them
and saying, hey, I want to letyou know.
The offer is $2,060,000.
They've borrowed $10,000 moreoff the mother-in-law.
That's why it's $2,061,000.
Who was the trainer?
I hate mentioning his name, butit was one of the few things I
actually got.
I mean was Neil Jenman.
(22:00):
I did a course from beginner towinner 40 years ago and Jenman
said at the time he goes, whatyou want to do is, when you get
an increase of offer, get it offat an odd number, because
(22:20):
people will turn around and say,well, if you've got 850, why
couldn't you have got 853 or 200?
So I just think if there's oneskill that an agent should move
themselves from a 7 out of 10 toa 10 out of 10, it's going to
help them in every aspect ofreal estate, including
everything I've just shown upthere on the screen that you
can't see.
(22:40):
It'll help you actuallynegotiate.
You'll be able to prove yourvalue as a negotiator, to get a
better fee.
You'll be able to help yourvendors get higher prices if you
can negotiate well.
But yeah, look, it's awonderful subject and all I can
say my experience with realestate agents that are good
negotiators they're notdesperate.
And why aren't they desperate?
(23:04):
Because they've got a lot ofballs up in the air at any one
time, so they're not dependenton this one thing going off.
Right, they've got lots oflisting presentations, they're
dealing with lots of buyers, sothey don't have all their hopes
built on this one thing goingoff.
And that's probably one of thereal secrets to being a good
negotiator be a good prospector.
John McGrath (23:25):
If you're a good prospector, you'll always have
lots of opportunities.
Tom Panos (23:28):
Volume negates luck.
Tommy Volume negates luck.
I love that.
Volume negates luck.
That's got to be written downafter here.
I'll use that a thousand timesin the next two years.
All right, thanks.
John McGrath (23:37):
Tony.
Tom Panos (23:38):
Another episode, another rugby league season,
another AFL season.
Daylight saving for lots ofAustralia.
Enjoy it.
John McGrath (23:49):
Signing off.
See you guys, see you team.
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