Let’s negotiate: Ability to reach agreement vital

 

If you lack negotiation skills, you won’t be able to put together a deal for your clients or keep your business afloat. Negotiating skills are crucial in real estate and, luckily, they can be learned on the job and improved throughout your career.

The REALTOR® Edge newsletter spoke with two Ontario REALTORS® and a negotiating expert to gain insights into how to succeed in negotiations.

Sharon Shortt of Belleville sold more than 1,000 homes during her 25-year sales career. Now a broker of record, she says she understood that her role in the negotiation process was that of a mediator between buyers and sellers.

“Although I am representing my client, if a deal can be negotiated that leaves both the buyer and the seller happy with the result, then we have a successful transaction, and ultimately everyone wins,” says Shortt.

“As REALTORS® we strive to serve the best interests of our clients, but it’s rare for both sides to get every single thing they originally wanted in a real estate transaction. All of us want to serve our clients, but the overall goal is for both buyer and seller to be happy with the result in the end.”

“The goal was for both buyer and seller to be happy with the result, even if they didn’t end up with every term that they originally wanted,” says Shortt.

There is usually something that needs to be negotiated from an original offer, Shortt notes, whether it is the closing date, price change, chattels such as appliances, or numerous other items. Sentimental items can also be a sticking point in negotiations, such as a tree planted by owners when their daughter was born that they wish to take with them. She has seen offers go back and forth as many as eight times, which isn’t that uncommon, she says.

“The challenging points are always the situations you least expect,” she adds. “Sometimes you can work them out, and sometimes you can’t.”

Negotiations can be very difficult, says Shortt, but she considered the challenge as “the very nature of the business — every Realtor has experience with negotiating.”


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When the words “tough negotiations” came up in conversation, she thinks back to the pricing negotiations she undertook a number of years ago for a chain of sales where the last buyer made an offer conditional upon the sale of his home, and the offer was accepted. “Unfortunately, as time passed, it became apparent that this buyer wasn’t going to be offered the price he needed for his own property to buy the other. We had to go back and renegotiate the sale price on each of the three properties involved in the chain,” says Shortt. “It was a lot of work to get everyone to agree, but in the end, the transactions all closed successfully.”

Chattels can be a huge stumbling block in the negotiating process, says Michael Gibbons, a Chatham Realtor who turned to real estate six years ago after a 20-year career in retail. He recalls a transaction when ownership of the washer and dryer was a heated point of dispute among the two parties. The laundry room had been custom built with a unique setup and the appliances fit perfectly.

“The washer and dryer were taken out and put back into the offer about four times,” Gibbons says. “It was a big sticking point and both sides were really hung up about it. The fate of these appliances probably added three extra days to the negotiations.”

A creative solution was eventually proposed by Gibbons: he offered to give the buyers his own washer and dryer, which were the same size and would also fit the space perfectly. “From a real estate perspective, it worked out well, but my wife wasn’t happy,” laughs Gibbons. “Sometimes in the heat of negotiations, you have to make quick decisions. In retrospect, I probably should have discussed the idea with my wife beforehand, but fortunately everything worked out in the end.”

“The job for a skilled negotiator is to build enough trust to uncover what’s really important to everyone”

Buyers and sellers sometimes let their emotions take over, which can hobble the negotiating process, he adds. Often, emotion overshadows the professional advice the client receives from the Realtor.

“How important is that chandelier?” Gibbons asked rhetorically. “Emotion always seems to make the value of the items under negotiation worth more.”

When clients dig in their heels and refuse to negotiate, Gibbons often takes them back to the questions he asked during the qualifying process so they remember the bigger picture. He asks them to once again consider carefully what they need and want, and whether the property in question fulfils their requirements.

“In those cases, I know that it meets their needs because they’ve made an offer, so I remind them they might be upset later to lose a property they love because of a disagreement over vertical blinds,” he says.

“Negotiation is where Realtors can bring real value to a transaction,” says Suze Cumming, who sold real estate in Toronto for 25 years prior to opening the Canadian branch of the Negotiation Institute. She now coaches Realtors across the country on negotiating successfully. Cumming believes in a collaborative win-win approach, but says Realtors also need access to competitive tactics to be successful.

People are the complicating factor in any negotiation, says Cumming. “Real estate transactions are unique because there’s so much emotion involved,” she says. “If people don’t feel heard and understood, the negotiation process will be far more challenging.”

When clients dig in their heels on a given point, Cumming examines the stand the clients are taking, tries to understand their area of concern and probes further to discover what’s motivating their behaviour.

“The job for a skilled negotiator is to build enough trust to uncover what’s really important to everyone, and to make sure everyone’s needs are met.”

She recalls a situation when her buyers were among 10 bidders competing for a property they really wanted, but they were unwilling to “grossly overpay”. Cumming learned that the seller had his eye on another property. She advised her clients to submit an offer contingent upon the seller’s ability to purchase the house he wanted. He accepted their offer, even though it was lower than some of the other bids, because that offer took his own needs into account.

“That’s win-win collaborative deal-making,” Cumming says. “The offer put the buyers in a good position because it met everyone’s needs and the seller looked favourably on them.”

“Negotiation skills matter more than any other skills for Realtors because they create better experiences and outcomes for the clients.”

Negotiating Tips from the Three Sources Quoted Above:

Don’t be afraid to ask; the worst the other party can do is say no.
Make sure all agreements are written into the offer and the APS.
Negotiating is a learning process; if you make an error, learn for next time.
Become flawless in the essentials of real estate: legal issues, ethical issues, financial issues and negotiation.
Remember that clients, unlike Realtors, don’t negotiate daily. Don’t press them. Most people are reasonable if they are given enough time to think things through.
Share all relevant information with your clients so they can make good decisions.

Story by Elaine Smith

Sources: Suze Cumming, Michael Gibbons, Sharron Shortt

Editor’s Note: Suze Cumming teaches courses on negotiation in real estate across the country. Her course to become a Certified Negotiation Expert (CNE®1 designation) is being offered in May in Toronto at REALTOR® Quest, Canada’s largest REALTOR® trade show and conference. For details, visit www.thenatureofrealestate.com/negotiation or www.realtor-quest.ca.

Editorial Policy: The REALTOR® EDGE newsletter is produced 11 times a year by the Ontario Real Estate Association. The newsletter aims to provide practical and useful news and information about the real estate industry to members of the association. The opinions expressed in the newsletter are not necessarily those of the publisher. The newsletter welcomes submissions from the real estate community, including letters to the editor, opinion pieces, events and news. The newsletter reserves the right to edit, based on space restrictions and/or suitability, and/or to refuse submitted material for inclusion in the newsletter without reason. All rights reserved. Reproduction in whole or in part without the express written permission of the publisher, OREA, is prohibited. Contents are copyright of the Ontario Real Estate Association.

Editor: Mary Ann Gratton

Contributors to this issue: Merv Burgard, Mary Ann Gratton

Web Editor: Shade Lapite

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Let’s negotiate: Ability to reach agreement vital

Top 3 Takeaways From OREA EMERGE – Andrew Fogliato

The Ontario Real Estate Association (OREA) had its EMERGE series in the last quarter of 2015. I had the pleasure of being one of the speakers and talking to Realtors about the digital marketing funnel. With online lead generation becoming ever more sophisticated it’s a really exciting time for Realtors to look at incorporating this into their business model. In today’s environment creativity and a few solid rules of thumb will get you everywhere.

EMERGE was an all around great experience and in addition to sharing my own expertise I learned several things that are key to building an even more successful business in this industry:

  1. NETWORKING

These events are an incredible opportunity to network. Get to know other agents in your area. Better than that, travel to an event thats not in your area and network with potential referral partners. Even make a list ahead of time if you see some speakers you’d want to talk to and make a point of reaching out.

  1. ASK QUESTIONS

What sets apart an event like Emerge from a lot of real estate conferences is the breakout sessions. Being able to speak directly to the experts after hearing them give their presentation is invaluable.

I’ve sat in many conferences where I’ve heard great ideas and had follow up questions I wanted to ask. At EMERGE these questions can be covered in the breakout session in great detail. All the nitty gritty questions you had about your own business you can ask.

  1. ATTENDING IS JUST THE START

Showing up, networking, and asking questions is just the start if you are coming to these events. The part that actually matters is what you do when you go home.

Nothing matters if you don’t implement. That’s what will make a difference in your business and in your life. Just knowing the answer isn’t the same as acting upon it.

Below is my talk from the event. If you want to ask questions about it then just leave them in the comments below!

 

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Top 3 Takeaways From OREA EMERGE – Andrew Fogliato

Introducing Ontario’s Top 2016 YPN Leaders

OREA is pleased to introduce it’s 2016 YPN Leadership Award winners. The recipients of this year’s awards are:

Bradley Mayer-Harman (Brampton Real Estate Board)

John-Ross Parks (Quinte & District Association of Realtors Inc.)

Peter Butler (Simcoe & District Real Estate Board)

Lindsay Reid (London & St. Thomas Association of Realtors); and

Einas Makki (Timmins, Cochrane & Timiskaming Districts Association of Realtors)

These five individuals are redefining what it means to be a real estate leader in the year 2016. They were selected from a large pool of candidates for their outstanding track records of progress in real estate and their communities. In the coming months OREA will be sharing their top lessons learned and ideas for taking real estate to the next level in a series of video interviews.

 The YPN Leadership Awards program is in its second year and is designed to recognize those new to the profession or under the age of 40 who: volunteer for organized real estate; give back to their communities; and invest in their professional development. The awards are presented each spring at OREA’s annual Leadership Conference.

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Introducing Ontario’s Top 2016 YPN Leaders

Tips to protect your home and property: IBC

The Insurance Bureau of Canada (IBC) reminds Ontarians to review their home insurance policies, update their home inventories and take steps to protect their personal property.

“Reviewing and updating your home inventory list helps protect your personal property and can speed up the claims process in the event of a theft or loss,” says Kim Donaldson, vice-president, Ontario, IBC. “Ontarians are encouraged to take a few moments to review the following important tips on how to help ensure a safe home for their families.”

IBC’s top ten tips:

  1. Review your insurance policy to ensure that you have adequate coverage.
  2. Shop around to find the right policy for your own unique situation.
  3. To prevent possible slips and falls, keep your walkways and front stairs clear of snow and ice.
  4. Create or review your family emergency plan.
  5. Update your home inventory list by adding new items, including gifts received over the holidays. Note the approximate value of the items, including makes, models, serial numbers and any other identifying marks.
  6. If necessary, hire an appraiser to determine the value of works of art or jewelry in order to avoid a possible claims misunderstanding.
  7. Take photos or a video of your home’s contents.
  8. Keep your home inventory list, and photos or video of your home’s contents in a safety deposit box, a fire proof safe or in another secure location away from your home.
  9. If you are renting, ensure you have tenant’s insurance. A landlord’s policy will not typically cover your personal belongings or liability.
  10. If you have questions, speak to your insurance representative.

For further information, contact IBC’s Consumer Information Centre at 1-844-227-5422 or visit www.ibc.ca.

Source – 

Tips to protect your home and property: IBC

Featured Alumnus: Jodie McNabb

 

 

Being patient and sensitive to other people’s needs and situations are important traits for real estate professionals. These traits are what garnered Jodie McNabb a new moniker from one of her clients.

We invite you to join the College Alumni Program and read Jodie’s profile to discover the what and the why of her new moniker. Jodie, a salesperson with Century 21 Choice Realty Inc., is the featured alumnus for March.

The Alumni Program has a dedicated, members-only website that features:

•  information on networking events; the next event will be held at OREA on May 18

•  factsheets on select topics; the most recent is Marketing Techniques, which highlights the four marketing – Product, Promotion, Price, Place

•  links to real-estate specific media; the most recent is the article published in the March issue of Edge entitled “Time flies: Organizing your day”

•  discussion boards

•  free audio podcasts

You must be a graduate of OREA Real Estate College and a member of OREA to join the Alumni Program. To join, go to http://bit.ly/1IryRuO.

 

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Featured Alumnus: Jodie McNabb

Unregistered Persons: DOs and DON’Ts

Whether you refer to them as unregistered persons (Real Estate and Business Brokers Act, 2002) or unregistered assistants (in real estate practice), individuals not registered with RECO as either brokers or salespeople are limited in the scope of activities permitted and must not perform any task that generally falls under the definition of a trade.

According to REBBA 2002, trade includes a disposition or acquisition of or transaction in real estate by sale, purchase, agreement for purchase and sale, exchange, option, lease, rental or otherwise and any offer or attempt to list real estate for the purpose of such a disposition, acquisition or transaction, and any act, advertisement, conduct or negotiation, directly or indirectly, in furtherance of any disposition, acquisition, transaction, offer or attempt, and the verb “trade” has a corresponding meaning.

Following is a list of what unregistered assistants are permitted (DOs) and not permitted (DON’Ts) to perform.

Unregistered Assistant DOs:

•  Submit listings and changes to the Multiple Listing Service®

•  Schedule appointments for registrants to show listed properties

•  Type contract forms

•  Place ‘For Sale’ signs on property on behalf of registrants

•  Distribute listing information to the public

•  Prepare and produce promotional material

•  Install lockboxes

•  Set up listing files, take photos of listings, complete fact sheets and deliver them to properties

•  Deliver documents and pick up keys

The above is not an exhaustive list.

Unregistered Assistant DON’Ts:

•  Conduct open houses or property showings

•  Make cold calls (even if it’s on behalf of a salesperson/broker)

•  Attend listing or sales presentation (unless accompanied by a registrant)

•  Negotiate purchase contracts, listing contracts, rental agreements, or leases

•  Negotiate agreements involving commission, commission split, management fees, or referral fees on behalf of registrants

 

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Unregistered Persons: DOs and DON’Ts

New seminars and tutorials deal with standard forms

If you want to learn more about the standard forms that are often used in real estate, sign up for a seminar or tutorial offered by the Ontario Real Estate Association (OREA).

Beginning in March, a series of web seminars (“webinars”) and tutorials will cover a variety of topics related to real estate forms. These 30-minute webinars are free and available to OREA members. All you need is a computer with working speakers and internet access.

“Forms are a key part of every real estate transaction, and it is vital to understand the complexities of forms and to use and fill them out correctly in order to provide excellent service to your buyers and sellers,” says Cassandra Agnew Walker, who is the senior manager, standard forms at OREA. She will be leading each of the monthly webinars.


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“These seminars are aimed at helping you grasp the many details related to real estate forms. This will enable you to fulfill your legal obligations, comply with regulations and serve your clients and customers better.”

The format will be interactive, enabling you to submit questions, listen to information, and watch slides related to the topic. Those who cannot participate in the seminar on the date it is offered can watch a recorded version of the webinar at a later date and time convenient to them.

Seminars will be held once a month, on the third Tuesday of the month at 1:00 p.m. OREA members can register at any time in order to obtain a login link for the webinar. On the day of the webinar members can log in up to 30 minutes before the scheduled start time. Participation in the live webinars will be on a first-come-first-served basis. The login registration pages are posted below.

Dates, months and topics are as follows:

March 15
 Forms – Revisions and Update for 2016 – Register now

April 19
 Handling Offers

May 17
 Assignment Agreements

June 21
 Creation and Use of Standard Clauses

July 19
 Highlights of Commercial Standard Forms

August 16
 Adding Integrity with Standard Forms

September 20
 Condominium Agreement and Relevant Clauses

October 18
 Electronic Document Integrity

November 15
 Forms and Clauses When Leasing

January 17, 2017
 Forms – Revisions and Update for 2017

 

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New seminars and tutorials deal with standard forms

Renovate before reselling? Some tips from RECO

So your retirement plan is in place, and the first step is to downsize your home.

For many of us, preparing a home for sale can include spending some time and money on upgrades or repairs.

Whether you’re interested in installing new kitchen cabinets or making necessary repairs to your roof, if you’re hiring a professional for the job you’ll need a written contract.

In Ontario, any agreement with a contractor worth more than $50 must be in writing. This means that you should have a contract even for small home renovations or repairs. And, if the contract is signed in your home, you are also entitled to a 10 calendar-day cooling off period. Within these 10 days, you may cancel your contract without having to provide a reason or pay a cancellation fee.

Make sure your contract includes:

The contractor’s name, address and contact information.

A thorough description of the project, including the materials to be used.

A copy of the written estimate.

A clear description of any warranties.

The total cost and payment schedule, including the deposit amount. We recommend keeping down payments at no more than 10 per cent of the total cost of the contract.

A work schedule, including start and completion dates.

Avoid falling into the temptation of “paper-free” deals that sound too good to be true. Remember that no receipt means that you have no proof of purchase.

These tips have been provided by Consumer Protection Ontario, a consumer awareness program from the government of Ontario. Visit Ontario.ca/HomeRenos to learn about your rights and responsibilities before you get started.

The above article is excerpted with permission from REConnect, the newsletter produced by the Real Estate Council of Ontario (RECO). 

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Renovate before reselling? Some tips from RECO

Home staging – the virtual way

Most home buyers begin their search independently using the internet, a medium that skews largely in favour of the visual. A property listing can rise or fall on the strength of its accompanying photographs. It’s a simple line to draw: great imagery generates more interest, which encourages more foot traffic to the property, which sets the stage for more potential offers. Over the last decade, home staging has played an increasing role in this process.

Home staging has evolved beyond simply tidying up, putting away the kids’ toys and cutting the lawn. It has become conceptual. Sellers are told to purge in order to create the illusion of space, to “bring the outside in” with window treatments and earth tones, and to depersonalize the décor so that their home becomes a blank canvas of potential.

In order to be done well, home staging takes time, physical energy and money. At least, that was the case before virtual staging. Now you don’t have to move a single piece of furniture to declutter or lift a paintbrush in order to redecorate. You can stage a house digitally.

Here are four things to consider about virtual staging.


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1. Enhancement and Convenience

Virtual staging is particularly useful when you’re selling an empty property. Statistics show vacant properties spend longer on the market and sell for less than furnished properties. It’s hard for buyers to imagine the potential of a room while staring at a blank space. Empty rooms also seem smaller so it’s difficult for people to tell how much furniture can fit in the space without a few pieces to hint at scale. Virtual staging solves both of these problems. With the right keystrokes, you can insert appropriately-sized furniture to demonstrate the size of rooms and you can suggest how the space can be utilized.

Virtual staging can also be beneficial for furnished homes. It might be difficult for a family with young children to keep a pristine, minimally furnished house if they are trying to sell. It could be easier for them to leave the house untouched and digitally remove unwanted items from rooms. Or, if a house has an off-putting décor — say 1970s psychedelic — it is far simpler to neutralize the colours and textures with the wave of a mouse rather than a bucket full of brushes. Or if the sellers have a tenant and therefore lack access to all rooms to stage the house as they’d like, virtual staging can be used to update furniture and other aspects of the place.

“It’s hard for buyers to imagine the potential of a room while staring at a blank space.”

2. Cost

The price tag for traditional staging can range from $2,000 to 4,000. Those funds must cover the cost of the designer, furniture storage and the rental of any additional furniture and furnishings.

Virtual staging costs only a tenth of that figure. If you’re virtually staging an empty house you can expect to pay $90 per photo. Many companies offer graduated package deals, i.e. $225 for three photos, $280 for four photos and $325 for five photos. Since you’re only spotlighting key rooms such as bedrooms, bathrooms, kitchen and living room, five photos is often sufficient.

If you opt to erase existing furniture and replace items through virtual staging, the cost of your bill may double. Each photo will cost an average of $145. Virtual staging companies can also upgrade a property’s furnishings, wall colour, flooring, or even landscape the grounds.

3. Truth in Advertising

It’s important to make clear in the listing that these are virtually staged photographs. You want potential buyers to feel guided and supported by your efforts, not manipulated or misled. Label each photograph as ‘Virtually Staged’ and pair it with photos of the actual rooms so they can compare.

4. Process

Companies use 3D rendering technology that give the finished photos an impressive level of realism. The process generally goes as follows:

A)  Send your chosen company photos of the rooms you’d like staged. Ideally the rooms are empty but you can also opt for the more expensive packages that involve staging furnished rooms.

B)  Browse through the company’s gallery and choose from their furniture set options, or allow their design team to make the selections for you.

C)  Wait two to three days to receive jpg files of virtually staged spaces.

D)  Prepare to wait two to three days longer if you’re staging a furnished room, since “removing” furniture requires more time.

E)  Feel free to submit changes if you are unhappy with the final photographs. Check the company’s terms and conditions, since some revisions are offered for free while others will incur an additional charge.

This is the first in a two-part story on Virtual Home Staging. Watch for more practical tips in Part Two, coming in next month’s issue of The REALTOR® EDGE newsletter.

 

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Home staging – the virtual way

Things to think about in the new year

I once read that there are 3 kinds of people;

1) Those that make things happen

2) Those that watch things happen

3) And…those that say “what just happened”

 Which one are you?

If you are a Realtor and want to choose one of those 3 options, maybe you should consider volunteering on your local board. But why? It’s going to take time, you have other priorities – family, friends, not to mention your business.

Please let me offer 3 good reasons;

1) You will learn what is really happening in the real estate business –trends, new techniques, technology apps, how to stay out of trouble

2) The board will pay for your volunteer leadership training which will also translate to better business practices, more referrals and more business

3) You will have the satisfaction that you made a difference in making your profession better – how often does that happen?

Take a look at the 3 kinds of people again….can you afford Not to volunteer?

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Things to think about in the new year