If you’re a residential real estate agent, you need a variety of business skills to be successful. In addition to marketing and data analysis experience, knowing how to negotiate is essential.

Like any skill, your ability to negotiate should be regularly exercised and developed. Whether you’ve been in the industry for two months or 20 years, here are four crucial reasons to keep your negotiation skills sharp.

Why Real Estate Agents Need Negotiation Skills

1. Counseling Your Clients

Buying or selling a home is never just a financial decision—it’s an emotional one, too. Real estate agents who are skilled negotiators understand this on a deeper level. By recognizing the psychological underpinnings of each action taken during the negotiation process, you can understand not only what motivates the other side, but your clients as well. 

Though you won’t be able to read minds, knowing negotiation frameworks and methodologies will equip you with the skills to accurately read situations in play and respond effectively. As a listing agent, you might even use this knowledge when negotiating your client's contract.

Related: 3 Ways to Add Value at the Negotiation Table

2. Maximizing Value

With an arsenal of negotiation tactics and strategies at your disposal, you can determine the best way to maximize the value of a deal. This may be achieved by determining the optimal negotiation strategy to attain the highest possible sale price for your seller, or it may require identifying every aspect of value in a transaction, beyond just the monetary components. 

For example, if your seller wants to achieve a certain sale price, but is also looking to close on their property within a certain period, a skilled negotiator might work with their seller to weigh which component is most important, and address this when presenting a counteroffer to prospective buyers.

The same goes for agents representing buyer clients. An effective negotiator will look at the value their buyer brings to the table, such as utilizing cash assets or a small mortgage amount for their purchase, in addition to the sale price they’re willing to pay. While money is important, a buyer’s ability to perform is equally as crucial. By expanding your negotiation skills, you can guarantee you’re able to identify value—wherever it may lie—to get the best result for your client and finalize the deal.

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3. Preparing for Change

While websites like Zillow and Trulia have become well-established components of the home buying and selling process by providing housing data directly to consumers, the rise of iBuyer models, such as Opendoor and Offerpad, have the potential to upend the residential real estate transaction

With the prospect of significant change within the industry, it’s important to emphasize the human value only a real estate agent can provide. While the ability to interpret data and identify niche marketplace features is important, these skills can’t be utilized properly without also having strong negotiation skills. When it comes to getting your buyer or seller the results they want, having a personal connection with a skilled advocate can be their best asset.

Related: 7 Negotiation Tactics That Actually Work

4. Differentiating Yourself

According to the National Association of REALTORS, there are about two million real estate agents in the United States alone, with millions more throughout the globe. By working to actively develop your negotiation skills, you can give yourself an edge over the competition and increase the likelihood that satisfied clients will refer you to others. And growing your network is the one of the most reliable ways to gain new business.

What’s more, being actively involved in negotiation classes or training is a way to separate yourself from the pack during interviews with potential clients, along with listing your learning experiences on your resume, LinkedIn profile, and website. If you’re serious about enhancing your skills, clients will know you’re serious about providing them with the best possible service.

Advancing Your Career with Negotiation Skills

Honing your negotiation skills is an invaluable way to invest in yourself. Consider learning about negotiation as part of your professional development to give yourself the greatest possibility of growth and success in the competitive, challenging real estate market.

Are you interested in developing your negotiation skills? Explore our eight-week online course Negotiation Mastery, and discover how you can secure maximum value for your clients by expanding your knowledge of effective bargaining techniques.

Quenby Solberg

About the Author

Quenby Solberg is a Program Services Coordinator at Harvard Business School Online. She is a lifelong resident of Massachusetts and holds a Bachelor of Arts degree in English Language and Literature from Smith College. When she’s not at HBS Online, you can find her in her seaside hometown, assisting with her mom’s real estate business, and occasionally setting foot on the beach.