Negotiating Leverage

Negotiating the sale of real estate is one of the most dynamic events in business and personal life. Money, emotion, needs, desires, features, timing and more combine to create an interesting storm.

Your real estate agent must be a negotiating expert. And if not an expert, your agent should at least profess to be a student of negotiation strategy and tactics. Your agents skill in this area will serve you: good or bad.

One tactic that is essential to understand is leverage. The FBI* tells us that there are three types. You will see other authors using similar categories with slightly different grammar.

Positive Leverage: Something good will happen if you agree to my terms.

Negative Leverage: Something bad will happen if you don’t agree to my terms.

Normative Leverage: If you agree to my terms, your normative values (the way you see the world) will be satisfied. Interestingly, this requires that the negotiator learns the normative values of his or her counter part. Insert: good communication skills and knowledge of “people”.

In residential real estate negotiations, I have found that positive and normative leverage are most powerful. Continue to read this blog and you will learn more.

*Thanks Chris Voss, Author: “Never Split The Difference”. Highly recommended read or audio book.


True Negotiation

A top producing real estate agent is a good negotiator. True or False?

Answer: True and False

Every aspect of real estate has a negotiating element. Consider now selecting a list price. The agent, in effect, negotiates with her or her own client for the list price.

Negotiate a price that’s too high and the home  may not get showings or worse, get showings with poor feedback. Negotiate a price that is too low and the house sells in a day or two. Maybe it was under priced? Maybe it was the “right” price. Which approach is correct?

Under priced homes do not require much negotiation skill. The offers pour in.

Over priced homes do not require any negotiation at all skill because the offer never arrives.

Somewhere in the middle is where your agent shines. A well priced home, marketed properly and with flair attracts offers.

Offers your agent can now apply their true negotiating skill upon.

The real estate secret

I remember a friend at a party stating “we found our last home by ourselves, the agent just booked the appointment and wrote the offer. What an easy job!”

Now, I don’t know the who’s, what’s or where for’s of their relationship, but there is a secret that we real estate agents keep to ourselves. It’s a big secret hiding in plain sight. We hide all the good listings on the MLS and

What my friend failed to recognize and acknowledge was the numerous homes they previewed. He forgot to mention the agents comments, analysis and advice given during each showing. And, he completely missed the importance and skill utilized during the offer process. From writing the offer, including subjects for the buyer’s benefit, to assisting in completing the due diligence and ultimately closing the transaction with the help of their lawyer.

The entire process was simplified and “easy” because his agent was competent. There are houses for sale everywhere. Choosing the right one, making sure it’s a good one and locking it up with a solid offer may seem easy but there are a lot of moving parts. That’s why we are here.





Looking to purchase real estate? Step One…Step Two…

One: Find a real estate agent

Two: Find a Lender


Top three things to consider when choosing your agent.

1. Does this agent have experience and skill?

Can they protect me and cover the details of a complex transaction? Do they know the area? Can the agent show me how the house is valued?  Can they match my schedule and give me the service I need? Can they offer me service I don’t know that I need?

2. Does this agent have time for me?

Will they be able to meet me on short notice for showings? Will he or she have time to help me conduct the due diligence to make a good purchase? Will he or she help me analyze my purchase? Will he or she “chase the case” and work hard behind the scenes for me?

3) Will this agent allow me to say “no”?

Many agents often sell their clients to  a “yes” proposition house after house. Yet, screening properties well requires unbiased views and truly understanding the needs of the client. Acting as a fiduciary means coaching clients to what’s best for the client. Sometimes in hot markets, this means coaching a faster decision but in others, it means slowing down and offering quality advice. Which might mean the client says “no”.


Lender: A person who is skilled at finding you the most amount of money possible for the best rate and most flexible terms…

Banks: Your bank will often employ Mortgage Specialists. Some are the busiest and most productive lenders in the area. If your credit and income are good, you will have little trouble but be wary of the posted rate and standard terms. Mortgage Specialists are limited to finding you products from their institution. Not a bad thing but it could hamper you if you need creativity.

Mortgage Broker: An independent & licensed professional. Mortgage brokers act like real estate agents. They hold their license at a “house” and can access money from multiple sources – often from your current bank. Mortgage Brokers only get paid if their succeed in getting you a mortgage. Many are focus on long-term business strategies and want your repeat business.

There are other options for borrowing and mortgages such a family, private lenders, the mafia etc. Even if you choose an alternate route, I would still consider having a mortgage broker guide you through the process.



4.5 Mistakes Millennials Make When Buying a Home

There will be mistakes. It’s OK. Problem is, your parents made the same mistakes but their real estate increased in value faster than their mistakes cost them money. I hope this helps.

Let’s have some perspective. Houses are expensive, compact car payments are cheap, your parents live in a mansion and your university degree has qualified you for minimum wage at Starbucks. Not exactly correct for all but true for some. At least tight pants and beards are in fashion.

What is true, is that the real estate experience your parents have is not helpful to you. Times have changed. The chances of your first real estate purchase doubling shortly after purchase is near zero and in fact, it’s more likely the value of your purchase will go down in value. So, let’s avoid these mistakes.

  1. Using an inexperienced REALTOR. Use a veteran who has a high acumen for tech, returns texts fast and is a go getter. Your friend’s friend may have just gotten their license but consulting with this person, at this time in your life could be a mistake. A 1/4 to 1/2 million dollar purchase will require needs analysis and more than someone to “get you a deal” or open the door. Buying poorly can harm your finances for years. Ask yourself, it will cost me $40,000 to $50,000 to reverse this purchase or move on in the future, I am ready to spend this kind of money? In relative terms your first real estate transaction can make or break your financial future. working with an agent who “doesn’t need” the commission is one way to get honest advice. (Notice I said “inexperienced”, not young. A young agent can have plenty of experience and many older agents may have less experience).
  2. Not having a short-term plan. Ask yourself, what does my ownership look like in 2, 5 and 10 years? If you are frustrated by paying someone else’s mortgage (i.e. rent), remember it’s not you replacing the hot water tank or paying the property taxes. If, on the other hand, the home your are purchasing can see you through a dog, marriage, kids, extended family and more, perhaps it’s a good plan. My experience tells me the 5th year of ownership is usually long enough to “work thru” a bad market and reverse a bad buy. But, it’s better to avoid the bad buy altogether.
  3. Avoid the fixer upper. Many new real estate buyers look to the foreclosure and fixer upper market and millennials should avoid these properties. Sure, carpets, paint and cosmetic updates are fine and normal in the course of looking for value priced homes. At the same time, nothing can stress a first time buyer or young couple more than regular trips to the local hardware store purchasing widgets to complete this weeks “to do” list. Soon, all your extra cash will be sucked up by the reno that seemed doable but just never got finished. Buy someone else’s reno. Get the home inspected by a picky home inspector and move in and enjoy.
  4. Don’t buy a condo.  Yup, I said it. Don’t. Well, I know it’s in your budget but avoid a condo unless it has the following: 1) It can be rented without restrictions, 2) The building is newer and has a low potential for a special assessment, 3) It’s concrete construction, 4) It’s “all of the above” and is a 10 minute walk to downtown shopping and services. Purchasing new construction is also a good idea for millennials but make sure you have your agent go over the paperwork. The sales people in the show home represent the developer, not you. This oversight could limit your options.

And last, item .5 is when looking for financing, don’t take a “no” from someone who can’t say “yes”. Whether it’s a bank or mortgage broker, don’t stop if you are turned down. Keep exploring financing options until you are sure you have good financing plan in place. And, don’t start viewing homes until you are 100% sure you have money in place.

I hope this helped!