Real Estate Agents and Negotiation – Buyer Beware

Many people ask me “Why do I need to be able to negotiate the price of my house? Won’t my agent do that for me?” It seems logical doesn’t it? After all, negotiating is one of the top 5 services buyers expect real estate agents to perform for them.

The interesting thing is that there is almost no negotiation training required to be a real estate agent. I am a real estate agent and have completed significant additional training beyond the minimum requirements. I can tell you that almost all of my training in negotiation has come from outside of the real estate industry.

That being said, some real estate agents are excellent negotiators. They have picked up the skills over years in the industry, they understand buyers and sellers, and they have the skills to negotiate proficiently for either party. But in my experience, these agents are few and far between. Many real estate agents think they know how to negotiate but don’t. They assume that because they been in the industry for a couple of years, they have picked it up. This is unlikely.

Unless you have specific training in negotiation, it is not easy to “pick it up.” Skilled negotiators know how to set up a climate where the other party feels like they won in the negotiation. So if an agent feels like they have done decent in negotiations in the past, they were probably dealing with a skilled negotiator that knew how to set up a climate where the agent felt like they won. The agent may feel like because the seller paid a few thousand dollars in closing costs, they negotiated a great deal for their buyer. They don’t realize the seller priced their property $15,000 above their minimum acceptable price and came out significantly ahead when they just had to give closing costs.

You must have a basic understanding of negotiation in order to protect your money. Learning a few principles and skills can save (or make, depending on how you want to look at it) you tens of thousands of dollars on the price of your home. With a little practice, you can pick these skills up relatively quickly and you will make money (or save money) for life. Don’t wait though. When you are negotiating for your home, it is too late to practice. And by all means don’t leave a substantial amount of your money the hands of someone else.