Blog: Master This Market…through Negotiation Expertise
Markets across Canada are transitioning from years of a strong seller’s market to markets that range from balanced to buyers’. This trend will likely continue and perhaps deepen as trade disputes; near inverted yield curves and jittery investment markets reduce confidence and edge us ever closer to an economic slowdown with some economists predicting a recession. I don’t have a crystal ball and don’t know where this is all going but I do know that even in the current rebalancing of the markets, negotiation skills are essential if you want to put deals together. (Note: there are some isolated markets that still favour the seller.)
Sellers still want big prices and believe that they still hold the balance of power, while buyers feel that they have gained significant power and can use that power to low ball sellers. This makes getting deals together tricky for the first time since our last economic slowdown in 2008. The good news is that those who master negotiation skills can and will thrive in this market.
What you are likely to see in a market slowdown is a reduction in the number of sales by about 40%. That is what we have already seen in Vancouver based on the latest sales data from November 2018. That means that there are still a significant number of transactions happening each month and, in my experience, highly skilled agents will get a much bigger share of those deals. Those who know how to negotiate well will get deals done and those who don’t, won't.
As CNE and MCNE grads, you have the tools to help sellers get their properties sold and to help buyers understand that there are excellent buying opportunities in this market.
Let’s take a look at our CNE/MCNE toolkit:
SAM Model: You are going to see more and stronger stands from both sides and in the case of price, those stands will be further apart. In many cases, you will need to shift the parties perspectives significantly and the only way to do this is to go deep beneath the stands into their Area of Concerns and Emotional Motivators. Your acumen with this tool is essential.
Power: When markets change, people like to blame someone and the REALTOR® is often the easiest scapegoat. If you are to be an effective negotiator, you need to have your client and the other parties to the transaction see you as the expert and respect you for your skills. Your ability to understand the various sources of power and how they will affect the negotiations is key to you helping people make difficult and important decisions without blaming you for the outcome. Slow markets aren’t our fault and it’s critical that we don’t allow the parties to the transaction blame us.
Gathering Information: The more complicated it is to put a transaction together, the more information we need. When properties are trading at all-time high prices and buyers feel a huge relief just getting a house at all, information is nice but not all that essential. When buyers are looking for an opportunity to get a good deal, or sellers are looking for a buyer who will qualify in the new lending environment and successfully close, each of those parties will look to you to get more information about the other parties to help them make better decisions. Your skill and persistence in gathering information will be key in helping you get people moving forward with transactions.
Next week we will cover more CNE/MCNE skills and how you can use them to Master this Market.
There are a few spots left in the January Advanced Negotiation Workshop. This is a max of 15 people and Suze on a live webinar each week for four weeks analysing real case studies through the lens of the CNE/MCNE tools. This is by far the most effective way to master these essential skills. If you are serious about adapting to the changing market, sign up here. You must have graduated CNE or MCNE to qualify for this workshop.