Our real estate company, Keller Williams, has something called the KW Belief System. It’s ten points that guide agents through the sometimes challenging world of real estate deals. It was nine points, but in 2020, we added a new one in response to the growing recognition that it is not enough to refrain from exclusive and discriminatory practices. The addition of “Equity: Opportunities for All” is based on a mindset that we must all be engaged and active in the fight against exclusivity and discrimination.
The full belief system is laid out below. All our important but today we wanted to focus on the first of the beliefs, Win-Win or No Deal.
Here is why approaching real estate deals from this perspective isn’t just a nice thing to do, it’s an extremely smart and effective way of making the best possible deal happen.
What is it?
The first belief above is Win-Win or No Deal, which means we strive for a transaction where both parties consider the deal a good one and come out of it feeling pleased with the result.
It sounds great on paper but it also sounds like you might be giving up something on your side (whether you’re the buyer or seller) in order to make them happy as well.
Here’s three reasons why Win-Win or no deal actually results in the best possible deal for you.
It opens the door to better negotiations.
Without a certain level of trust and respect, negotiations can’t actually go anywhere. If one side is convinced the other side is trying to take advantage or beat them down, negotiations quickly fall apart.
A good analogy would be when you play a game and you do so with a healthy level of competition and sportsmanship. We aren’t going to cheat in order to win, but we are absolutely going to play at our highest, best level. When we establish ourselves as reasonable, competent people with the agent and person on the other side of a transaction, we open the door to negotiating an amazing deal.
In negotiations, it is often overlooked that all parties don’t value all aspects the same. If we don’t seek to understand what is important to the other side, we can miss opportunities to give them something they value in exchange for something we value. We have seen many real estate transactions where factors like closing date, inclusions and rental contracts have different value to each side.
For example, when an earlier closing date saves a buyer tens of thousands of dollars in interest costs on their mortgage rate and costs a seller much less than that in temporary storage costs, there is an opportunity to come to an agreement that both parties find beneficial.
When we have a professional, cordial relationship with the other side, we can use our negotiating skill and experience to convince them to accept the deal we want by understanding the deal they want. We frame it so they understand, we use logic to make them think and emotion to make them act. We get the deal done.
Sometimes, you walk away rather than accept a Win-Lose deal.
The flip side of the coin is that when we are unable to establish a relationship and goal of a Win-Win deal with the other side, we sometimes have to walk away.
When we encounter agents or clients on the other side who interpret Win-Win as “I win, and also, I win.” then we need to be prepared to move on.
Understanding the benefit of a Win-Win situation means accepting the fact that not all agents and people approach deals that way. When we see that there is no genuine intent to work together for a good deal, we are clear about that needing to change or no deal can take place.
Due to the fact that some real estate companies train their agents to aggressively and pointlessly resist what the other side wants, you can find yourself in a negotiation that is really not a negotiation. Take it or leave it is a binary option that can come with unacceptable trade-offs.
Sometimes, the other side comes around when they realize they can’t take advantage of us and push us into a bad deal. In other cases, they continue to try to get what they want at the expense of what we want and we make the decision to move on to another option.
If you beat someone, you better not need their good will later.
Finally, we come to the most often overlooked aspect of negotiating.
When a real estate deal is agreed upon, buyers don’t give the sellers a bag of money and receive the keys immediately. It is often months later that the deal actually closes.
During this time, buyers and sellers continue to have interactions in the form of purchaser visits to the home, appraisals from lenders, insurance forms, utility transfers, items being left behind and many other questions and answers.
Ask any real estate lawyer and they will tell you that some real estate deals go sour and fail to close. There are, of course, consequences, in the form of lawsuits, penalties and wasted time and money.
The harder we negotiate, the less likely it is that the other side will be helpful if we need a favour. When a seller refuses to concede a negotiating point that costs them little but greatly impacts a buyer, it creates ill will and resentment.
Such feelings give rise to decisions, some big and some small, that can either derail a deal or make it a worse experience for the other side. A seller can choose to do the bare minimum required by law in order to clean and empty the home. A buyer can refuse to accommodate a last minute request to extend by a day due to a family emergency on the seller’s side.
By following the belief of Win-Win or No Deal, we avoid circumstances later on that can make the deal problematic or even result in the transaction not closing.
Win-Win or No Deal is not simply a nice way to behave, it’s a model that allows for fierce negotiations based on a reasonable level of trust. It gives us the ability to recognize situations that we cannot and should not accept and move on to other options. Finally, it means that the deal we negotiate actually closes and that there are no unpleasant or expensive surprises along the way.
If someone you like has had a bad experience in the real estate world, we’d ask you to pass on this article. Whether it’s buying or selling, we believe that everyone deserve to work with agents who understand the reality of the industry but also see a way forward that is better for everyone involved. If that sounds like a Win-Win to you, get in touch.