We are talking all about negotiation tactics with Eirik Davey-Gislason, a Negotiation Expert, Instructor, Coach, and Real Estate Professional out of New York City.
Eirik's expertise and experience in collaborative negotiation, deal management, and conflict resolution, as well as his industry knowledge and reputation as both a Sales Director and Agent, have earned Eirik a unique and valuable perspective, skill set and resume.
As a writer and author of the real estate blogs, Unreal Estate and Growing the Pie, Eirik educates the industry and public on various aspects of negotiation best practices and the real estate market. He has been featured and quoted in articles in The New York Times, Curbed and Brick Underground.
The most dangerous negotiation is the one that you don't know that you're in!
Learn how to negotiate with confidence and empathy during this episode.
In this episode, we discussed:
- What questions should you ask during a negotiation?
- What points can be negotiated during a real estate transaction?
- The importance of levity and personality when making personal connections.
- Understanding value proposition, persuasion, and empathy.
- Why it's important to be ceaselessly curious during a negotiation.
- Asking open-ended versus closed-ended questions.
- Using hypothetical and speculative questions to your advantage.
- Finding your way to the Zone of Possible Agreement.
- What is the Contrast Principle and how should you use it?
- When (and when not) to use email and text messages during a negotiation.
- Using the uniqueness principle and the scarcity principle.
Fun fact - and we verified this - according to Eirik's LinkedIn, he won World's Best Dad in 7 of 10 years from 2012-2021 (2016, 2018, and 2021 must have been off years for him!)
Where to find Eirik online:
Instagram - https://www.instagram.com/eiriktheexpert/
YouTube - https://www.youtube.com/channel/UCcXsZJE5J7lL95uUIzdyyew
LinkedIn - https://www.linkedin.com/in/eirikgislason/
Real Estate Negotiation Institute - https://thereni.com/agents/eirik-davey-gislason/
Website - https://eirikgislason.com/
Join Jason Muth and Attorney / Broker Rory Gill of NextHome Titletown and UrbanVillage Legal in Boston, Massachusetts for another episode of The Real Estate Law Podcast!
#realestatepodcast #nexthome #humansoverhouses #realestate #realestateinvesting #realestateinvestor #realestatelaw #negotiationtactics #financialindependence #negotiation #financialfreedom #negotiating #newyorkrealestate #howtonegotiate #negotiationskills
The Real Estate Law Podcast is hosted by Jason Muth and Attorney / Broker Rory Gill.
This podcast and these show notes are not legal advice, but we hope you find both entertaining and informative.
The Real Estate Law Podcast, because real estate is more than just pretty pictures and law goes well beyond the paperwork and courtroom arguments.
We narrow it down to price alone, we then lead to entrenchment or retreat people back away into their corners because they feel that that is a high value element that they're that they're being asked to give on. And so instead of focusing on the position, focus on their interests, what do they want? What is it that they're trying to achieve? Why do they want the price that they're that they're hoping to get? What is theirAnnouncer:
You found The Real Estate Law Podcast? Because real estate is more than just pretty pictures. And law goes well beyond the paperwork and courtroom argument. If you're a real estate professional, or looking to build real estate expertise, then welcome to the conversation and discover more at the realestatelawpodcast.comJason Muth:
Welcome, welcome welcome to another episode of The Real Estate Law Podcast. What a cool episode we have right now we're gonna be talking all about some great negotiation strategies and learning all about the New York real estate market. Two topics that we haven't really gotten into all that much here on The Real Estate Law Podcast. First, let's mention we're here with my co host, Rory Gill from NextHome Titletown Real Estate, and UrbanVillage Legal in Boston. Give a quick shout out. Hello.Rory Gill:
Hey Jason!Jason Muth:
You can wave Rory. Yeah, so negotiation. I know, we haven't talked about this yet. And, you know, I think that you have a class coming up with your agents later on this year about good negotiation. So this is a really timely episode.Rory Gill:
Absolutely. So want to be taking diligent notes here and converting this into or adding this to our negotiation workshop that we have scheduled for this fall.Jason Muth:
Let's welcome our negotiation expert. He's a real estate coach and a real estate professional. He's Associate Broker with Brown Harris Stevens in New York, please welcome to the podcast. Eirik Davey-Gislason. Hello, Eric.Eirik Davey-Gislason:
Hi, how are you? Thanks for having me, Jason. And Rory, I'm thrilled to be here.Jason Muth:
Yeah, you know, I mentioned we have not had negotiation as a subject and negotiation is so, so incredibly important, both on the real estate side and on the law side. Sometimes we diverge into topics that are more on the real estate side. And sometimes we'll talk about some of the legalese. But, you know, everybody is negotiating. Life is a negotiation. And you know, having an expert like yourself, you know, is going to be really informative for us and for everyone who's listening right now, Eric, you're with The Real Estate Negotiation Institute. What, what does that? How did you get linked up with these guys?Eirik Davey-Gislason:
Well, I've been a real estate professional in New York City for about 17 years. And I spent some of that time as a director of sales and development. I coached agents, I trained them in rental and sales training at the firm that I was with. And when I went back into the field, I made a decision after the birth of our second daughter to go back into the field as a real estate professional, was introduced to Tom Heyman, who was the CEO and founder of The Real Estate Negotiation Institute, by taking a class through the Real Estate Board in New York. And frankly, with all of the training I had done on negotiation with all of the background knowledge I had, this class blew me away, it gave me a new framework, a new idea, new ideas and ways to think about collaborative negotiation. And shortly after that, I contacted him and said, This is content that I should be teaching. I have a passion for it. And so I went through all of the training through the real estate negotiation Institute based in Phoenix. And so for the past seven years, I've been teaching real estate professionals, collaborative negotiation, tactics and techniques. In a few different classes that we offer.Jason Muth:
I should mention that we did our homework on you as well, Rory pulled up this stat that you in the past 10 years, you won the world's best dad award seven times. You mentioned your second daughter, and I'm curious what happened those other three years where you didn't win it, but you're gonna have to tell us about that, too.Eirik Davey-Gislason:
Yeah, well, that's true. I've worn the crown for a few few of the years that I've had daughters. The painful years are the ones that I that I didn't win, and making it more painful as the fact that the only voters are my daughters and my wife. I'm a big fan of showing a little bit of personality and making connections with my clients and friends and people that I connect with, through a little bit of levity. And so I put that in my auto signature, because I didn't have any other awards to speak up. So I said, Hey, you know what, maybe I should my skills as a father, but you're right. There are a couple of years that just didn't pull it out. But I think I might win in 2022, so.Jason Muth:
Rory, are you up to the award this year? I know we had a tough one too.Rory Gill:
Well, we have a we have to compete against each other unfortunately for that one that award.Jason Muth:
Yes. There's no competition with Eric, especially seven years out of the past 10. But I do love the levity. You know, I certainly get the humanity behind statements like that. And you know, I think it's important also not just in business dealings, but I think that one thing that Zoom allowed us all to do is to appreciate when our cats and our kids are walking in the backgrounds for the past couple of years of all of our meetings. I think it's kind of still acceptable. And it still allows us to understand that the people that you're negotiating with or you're in business with or actually humans as well. And one thing I used to always mention to our account executives, when I worked in digital media for so long, coaching them on how to sell to local media, was even your 55 year old decision maker is he is a fan of sports, he watches sitcoms, like he listens to certain radio stations. Like, you know, the way to hit those business owners is not just using tactics in reaching business owners in the most traditional sense. Sometimes you've got to get them during Seinfeld, or you have to get in during a Red Sox or Yankees game too, because you know, we're all humans anyway, not to go off on a tangent there. But I do actually think it's a an interesting parallel to negotiation. So if you can give us a couple quick pointers, a couple quick tips, like where do you start with the people who you're coaching, as to a great starting point are things that you just really have to always remember when you're entering into a negotiation?Eirik Davey-Gislason:
Well, it's a great question. And the first thing that we train is, first of all, we're training in collaborative negotiation strategies, which, at its core, ask the question of how can I create value in this transaction, as opposed to looking at it as a fixed pie, or that that zero sum game idea of the utility gained by one side isn't necessarily lost by the other that win lose mentality, I need to get 51% of the pie in there, therefore I win. And if I do that, then the other side necessarily loses. As collaborative negotiators, we say, if I start with the other side, then I start to understand what the other side is trying to achieve. What are their goals? What do they want? And I don't have to, to promise them or guarantee them that I'm going to get any of it, give them any of it. But if I know what they want, I will be better at identifying items of exchange, looking at the all of the different various variables and value elements in that transaction. And I can start to find ways to increase that pie grow value in the transaction. So the first thing I say to my my coaches is, you've got to start with the other side, you've got to understand what it is that they want. understanding them is key and important in doing that. The other part of what's important at the beginning of a negotiation is to size up the other party understand what style of negotiation to bring to the table so that you can understand how that conversation may go, what sort of tactics or strategies they may employ, and then strategize on how you're going to ask questions. I use the term ceaselessly curious, we as negotiators have to be ceaselessly curious, we need to find several ways to ask questions when we don't get the the answer that we're looking for, or don't get an answer at all, we get stonewalled from the other side, we need to find a new way to ask that question so that we can start framing in the other side. What are they willing to do? We know what they want to do we know what their what they're asking for. But what are they willing to do to get it to get a deal done? And when I can understand that, then we get into what Harvard calls the zone of possible agreement. What is it? What's that? What does that zone look like? Is there overlap? What is the overlap? And then how can I get the other side as close to my side of that zone of possible agreement as I can. So look, starting with the other side in mind, looking for ways to create value, and asking questions ceaselessly where I would start,Rory Gill:
I would give you that I know, when I work with my agents, I always have to dispel a notion that they can't ask certain questions as part of the process. And I encourage them to pick up the phone and talk to the listing agent, understand the seller's situation, use public records that are available to make you have you to fill in the gaps as to the seller's situation. But even ask the questions that they think that they can't ask, you know, some of this might vary state to state by ethics. But it's amazing how many buyer's agents don't even ask if there's an offer on the table or how strong the offer is, because they're afraid that it's crossing some sort of line or that it's not information they're going to get, but you never know. And the first thing you have to do is just ask the questions. You know, when you're working with your coachees, are there certain questions, at least in the real estate space that you encourage them to ask?Eirik Davey-Gislason:
Yeah, well I would focus on ways to ask the question as opposed to the specific question itself. You're absolutely right. Worry the way that what real estate professionals often do is they give themselves an out and they give the other side and out because in their mind, they're they're asking something that they think is too intrusive, or may cross some ethical boundary. You have to plan. You have to be organized. You have to walk into that situation, having a list of questions that you can ask, so that you're not just firing from the hip. You're not just shooting from the hip. But what I focus on with my coachees and in my classes is how do we ask questions. And what I do roleplay and exercises with real estate professional It's shocking to me how many times they will lead with or ask a question in a closed ended manner. They give the other side the opportunity to say yes or no. And in the way that the question that they're asking they almost pushing the other side into a corner by asking that yes or no, because by answering in the affirmative, they put the other side in a very difficult position by saying no, it gives them an easy out. And so asking closed ended questions, although it's great for compliance. You know, that's why we ask closed ended questions we want to the other side to comply, we want them to say yes or no. So that leads us to the next question. But if we're only asking yes or no questions, do you have any offers? You know, if I say that to the other side, do you have any offers? The other side may feel like okay, wait, if I answer that question with a no, then I lose power. So I'm going to dodge and pivot as a listing agent, I say, Well, you know, we, we've have a couple of people who are swirling, or we have a couple second appointments, because they don't want to say no. If they say yes, okay, great. Now I can, then I've got that compliance question. But I would rather say, tell me about the offers that you have on the table. Now, if I ask them tell me or if I say, help me understand, tell me or those kinds of questions that are open ended questions. Now I put in the other side's lap a question that they have to answer with something other than a yes or no. So asking how or what questions is much more impactful than asking a question that is going to require a yes or no response. So that's one way, the yes or no, or the open ended questions are a big way for agents to when they sit down and they strategize, look at the questions that they ask and just mark down how many of the questions that they asked are yes or no questions. And oftentimes, they find that they are heavily focusing on yes or no questions which give the other side an easy out. The other thing is, I'm a huge fan of speculative questions or hypothetical questions. What if or suppose that questions, those questions that say, look, let's take it away from the specifics of our negotiation, and just speak in a hypothetical way. And that can take a little bit of the sting out, or the intrusiveness out, or whatever, that person may feel reluctant? To answer that question or a reason they may feel reluctant to ask the answer that question, they may feel a little bit more comfortable, or typically they do feel a little bit more comfortable. If you ask in a hypothetical or speculative way.Jason Muth:
You're taking me back to 30 years ago, just north of you, in my very first job in Rockland County, New York, at The Gap, in the Nanuet Mall, which maybe you remember, maybe you don't. And they trained us not to ask closed ended questions literally in a retail job. They said, No, you're not supposed to say, Can I help you? Because the answer is no. Right? Right. You're supposed to say, hey, what can I help you find? How can I help you? Because it's more awkward for them to say no, you know, or they have to physically say No, I'm just looking. Right? At least Yeah, you've engaged them in a bit of a conversation. So you know, what an interesting little nugget that, you know, pertains to, you know, a much larger sale than pocket t-shirt. The speculative questions to like, you know, what, what a cool way to think about it, like, you know, let's just say that, you know, a buyer were to come in with, you know, this offer, you know, that had no contingencies and, you know, a quick close in 30 days, or let's just say that, like, you know, there was a rent-back option, like, you know, how would your buyer feel about that, like, yes, it's brilliant stuff.Eirik Davey-Gislason:
Yeah. And another another example of that may be in terms of downpayment, you know, we have in our markets, we have a lot of cash buyers, and what if we're working with a buyer, that's financing? And we're trying to see if there's any flexibility on price from the seller side? And I may say to them, hypothetically speaking, if my client were to be coming in with an with an all cash offer, or a high cash offer, would that change your client's mind on their flexibility? Or how would that influence your seller in terms of their bottom line? And then I'm now gonna have a conversation about risk mitigation or about risk tolerance, rather than price itself. Because, you know, we all take stance, we take a stand, we take a position because we don't want to get knocked off of that decision. We do that in every facet of our lives. But if I were to say, if I were to do this, let's just say hypothetically, we were willing to do that, would that change your position? Then all of a sudden, they say, Well, you know, we might be a little bit more flexible in terms of price if we had a buyer who was more qualified or higher cash or all cash. Well, now, even if I'm not with my buyers not willing to pay all cash, or even if they're a 20% down buyer, or whatever it is. I'm starting to get an idea of what that frame looks like. What is that seller willing to do? And if I can find a way to mitigate their risk, even if I'm a 20%, down buyer, Will they still be them willing to be a little bit more flexible on price? And I can start to get a little bit more information going in that direction than if I just say to them, is your client flexible on price? Again, yes or no question? How do you think that that sellers agent is going to that listing agent is going to respond to that question, you're asking them to either give up a lot of power, or to claim something that isn't true. Those are possibilities, they there may be flexibility on price, but the way that you ask the question, you're forcing that listing agent to say, No, we've priced it correctly, and we're firm on price. And now all of a sudden, you've, you've created this kind of entrenchment idea, as opposed to bringing the parties into that what we talked about earlier, that zone of possible agreement.Jason Muth:
Or is it a really good job and teaching me that there's so many different points that you can negotiate when you're buying or selling real estate. And you know, if you're buying your first property and listening to this, you might think the only thing that you can negotiate is the price. But you know, there is a long list beyond that. And you're kind of underscoring a lot of these points, Eric, that, you know, it's not just the price, you're going to negotiate, it's a lot of the different terms. And it's how you ask these questions. Rory, a lot of what I'm going to ask you this question, because, you know, Eric's brought up a number of different things, and in your dealings with agents, both as a buying and selling agent, is it obvious to you when somebody hasn't done their homework on negotiation or when there's a novice agent that maybe it's asking questions in the wrong way? How do you take that as somebody that's representing buyers and sellers?Rory Gill:
That's a good question. And perhaps Eric's done this more articulately than I have. But when we think we're far apart on price, or when we're getting distracted by price, at least steer the conversation elsewhere, because that gives you an opportunity to start to learn more about the counterparties intentions about their interests and everything and perhaps you can get a little bit more space out there. True, price is kind of the cornerstone term in a real estate deal. The seller always wants more, the buyer always wants to pay less, but you can start to divert the conversation elsewhere to at least see if Eric is saying the zone of possible agreement is a little bit larger than we think I'm working with somebody that I might judge to be an novice in negotiation, there's a lack of curiosity on their end about what's going on. It's amazing. On the flip side of it, when you're, for example, a listing agent, and you're selling a property, how few questions you get asked about the property. And I've noted to you, Jason, before, when I'm working with a good buyer's agent, you know, how relieved I am in a sense that they're asking all these questions that they seem to have done their homework, they're asking, you know, why my sellers are moving. And some questions that I may even out of instinct start to stew myself, but I know that they're trying to trying their best to get their offer presented in a way that's that's good. So, you know, I think the the hallmark of a poor negotiator in the real estate space is somebody who lacks curiosity on behalf of their client.Jason Muth:
Eric, talk a little bit about like, maybe some persuasive questioning, like during a negotiation, like how I've said this many times in this podcast about how real estate is great, because it's not zero sum, like and you mentioned it earlier. You know, you don't have to win for me to lose, but you do want to persuade deals to happen. And when you're buying and selling property, you know, someone is buying and someone is selling, and both of them are thinking that they're doing it at the exact right time, right? I'm selling this at the peak of the market, oh, I'm buying this the exact right time. How do you persuade a deal to kind of go through in some of your, you know, just with your experiences, some of your tactics?Eirik Davey-Gislason:
Well, you know, the first thing going back to what Rory was talking about, I think that a lot of times those inexperienced agents, what they'll do is they'll focus on - and this comes from the seminal work on collaborative negotiation called Getting to Yes, by Roger Fisher and William Ury, both in the Harvard program - but that idea of focusing on interests, not positions. And the first thing when we talk about price, that's a position right. And if we are we narrow it down to price alone, we then lead to entrenchment or retreat. People back away into their corners because they feel that that is a high value element that they're that they're being asked to give on. And so instead of focusing on the position, focus on their interests. What do they want? What is it that they're trying to achieve? Why do they want the price that that they're hoping to get? What is their justification for it, in its essence, like what is the other side's interests? From the persuasion standpoint, we talk in my class about the persuasion principles, these universal principles that we all use not just in Western culture, but but universally as human beings that work on us as persuasive techniques and that we that we use, whether it's consciously or subconsciously, on the other side, and one of those the first one that we just kind of talked about is self interest. So how do I have How do I get the other side I have to understand that what I'm asking them to do is in their interest, not my interest. So I want to ask questions of the other side, where I say, well tell me a little bit about your seller, what they're trying to achieve, or what are their goals? What do they want. And I start to have that. And then I say, what else? And what else, and what else and I want to get a list of value elements that I can start to measure up against the things that we are looking at in terms of value. And so uncovering those additional value elements. Or as you know, Chris Voss calls them black swans, that those things that we don't know, we don't know. And finding those things that could change the face of a negotiation, instead of just focusing on the positions in terms of price or closing timeline, or contingencies or down payment, right? There are other persuasive tools that we use, like the contrast principle where I may say to the other side, look, here's the list-to-close ratio for houses in this subdivision or in this neighborhood. This is the offer that we're making, our offer is 1% higher than the list-to-close ratio on average in the neighborhood as a way to highlight how much better our offer is than where things are closing in that neighborhood or in that subdivision. So using the contrast principle to magnify the contrast between the alternative and what you're offering. And oftentimes the other side, they have their own contrast in mind, right, they've already determined what the contrast is for my neighbor sold their house for X amount of dollars. And so therefore, I need to sell my house for Y, right, whether that's 10% higher, or the same price, determined, as the contrast may not meet the market now. You know, interest rates have gone higher prices settle, now, they may not be able to get 10% more than their neighbor got for their property. Or maybe there's a difference between the two properties. So you introducing your own contrast into that negotiation may help the help the other side, reframe their contrast, and they can then justify the price that you're offering based on that contrast. You know, we talked about the sameness principle with my, my auto signature, the the world's best dad and the auto signature. What I'm trying to do there is to create some connection with the other side, create some whether it's humor, or whether they're a parent or whether, you know, whatever it is, whatever it is, I'm trying to create some sort of a connection that goes beyond just the transaction. There are several others, Kevin Hogan and Dr. Robert Cialdini did, and many others now have done significant work on identifying these ways that we persuade each other. So a lot of the questions and again, I focused on how the way we ask questions, the types of questions and the way we ask questions, is so much more important than the actual question itself? In my opinion, what is it that we're trying to achieve? What is the goal and asking that question? And then all those questions that we are all asking, we find a different way to ask them or two or three different ways to ask them as opposed to just the one way that we know how to ask it the one way that we've been trained or taught to ask that question, which may not get us to the answer that we need. And as Rory mentioned earlier, there's a little bit off topic. But as Rory mentioned earlier, it's not always asking questions to the listing agent, they may not be willing to give you the information you need. Sometimes it's that idea of going to a third party expert, an attorney, a title professional, a mortgage professional going to people who may be able to add context to that negotiation, who don't have skin in the game,Rory Gill:
You reference Getting to Yes earlier on. I had it at arm's length, so I just wanted to pull it in there. But that's the method my law school taught us with negotiation. But I think the challenge in real world application is the way we were trained with this is the Imagine you're sitting at a negotiating table all ready to go and kind of a good formal session, which many attorneys actually do have the luxury of, but in a faster paced market and world of email, communication and intermediaries, I think the the hardest part of it is getting the conversation started in the first place. So you've given us a lot of good tactics and questions to ask. And you've also referenced getting third party providers in there. But do you have any other thoughts on opening up the conversation or at the very least understanding what's going on? Because I know I've always struggled in particularly email and text message communications, understanding what the other side's interests are, and I frequently to this day, misinterpret the other side's intentions over written communication.Eirik Davey-Gislason:
You're absolutely right. That is the danger in negotiation, written negotiation or negotiating over email or text which in our - look, the reality is in the real estate world today, there are going to be moments there are going to be times when we are passing messages. We are negotiating via email or text. In my advanced concepts course we spend time just breaking down, what are the issues? What are the problems with negotiating via email, and how can we become better at it knowing that it's an issue that it creates what what we call that trust gap, where you're writing an email, no matter how you win, no matter what the tone or the the, the attitude, or the messages that you are sending out there, the reader, the recipient determines the tone of that message on their side, they determined based on what they're going through that day, what mood they're in what the last interaction was with you or your team, they determine how they're reading that email, and that can cause some serious issues, or to your point, Rory, you receive an email, and you realize later that you didn't really read it in the context that it was meant. So there's a there's a big issue there. And we talked about that idea of making sure that you are utilizing email when it's necessary, but also leaving email behind or text behind. And I'm not a fan of using text at all, in a negotiation, because it really does not allow you then to, to use bullet points or to really maximize bullet points and italics and, and bold face and and to really use a formal written communication style in order to get your point across. So if we focus specifically on email, there are ways that we can enhance that. But then on the other side of it, if that idea that you mentioned, how do you get the conversation started. This is this is one of the reasons why we want to measure up the other side and see what style they're bringing to the table. Because when we do that, when we understand what style they're bringing to the table, we may then understand why it is that they keep forcing us into an email communication, and maybe a very passive aggressive way of negotiating. And a lot of competitive negotiators use email because they can be more bombastic, they can be more aggressive, they can use those hard bargaining tactics, and they're not talking to you face to face or even over the phone. They've got the ability to just kind of jab at you via written communication. So when you know that you're dealing with a competitive negotiator, and they keep bringing it back to email, now you can say, look, I will gain power as a collaborative negotiator, I'm going to gain power over that competitive negotiator by elevating this level of conversation, how do I do it? How do I get that competitive negotiator to stop reducing our communication to email and written communication? And how do we get them on the phone? Oftentimes, competitive negotiator or any negotiator, going back to that self interest principle is a good way to do it. You say to them, instead of emailing them and saying - This is what I want to know, A, B, C, D, and E - instead of giving them that information and the ability to continue on that path of email communication, you just say I have something I think you need to know, or I have something I think that you need to, you should hear. I'll give me a call at your earliest convenience, you use the self interest principle to say I've gotten information you want. And then there's another persuasion principle in there the uniqueness principle as Dr. Cialdini, he called it the scarcity principle, I have something that you need to know. And a competitive negotiators, especially but all of us as humans, we that when something is scarce or unique, it is inherently more valuable. And we say, oh, maybe it's worth for me picking up the phone or meeting that person for coffee, because they've got information that only I can get, or that's very valuable for me to have. So and I know that sounds simple, but it is amazing to me how many agents that I coach and how many agents that I train, who have been stonewalled by another agent. And in my class over a break, they use this tactic and they go to the other side, and they say, Hey, give me a call. I've got some really, really interesting news for you. And lo and behold, we're sitting back in class 10 minutes later, and their phone is ringing. And that person then called them for 48 hours is on the phone, and they're running out of the classroom to pick it up, because they know that they have to get that. So sometimes just making something instead of giving away the game, it's same thing with a yes or no questions where you're giving the other side and out, instead of giving them all the information, make them come to you for it. The other way that I train this is is that what I call the tip of the spear, and a lot of agents miss that opportunity at the beginning of the negotiation. I'll use a Chris Voss quote, again, the most dangerous negotiation is the one you don't know you're at. Right? So we are always negotiating. I think, Jason, you mentioned at the beginning of the podcast, we are always negotiating. So when I am a listing agent, and a buyer's agent calls me for an appointment, that's my opportunity, pick up the phone, have a five minute conversation with them and pump them for information as much as I possibly can before they even get to the property because the wall starts to build up once they start to understand that they want it or that they're interested in it. And that ability to get that information or understand those value elements starts to dissipate. So at the tip of the spear getting that information, if I'm a buyer's agent, the same thing, instead of just emailing for an appointment, I want to call them and ask them what's important to the seller or show up at the first open house a little bit early so that I can get some face time with that listing agent. But that early communication right off the bat is really important, and a lot of agents miss that opportunity. And then they're shocked when the other side doesn't want to give them a lot of information. Because now we're all that place where everybody's taking their stand, they're standing on their on their hill, they're unwilling to move off of it, because they're afraid that the other side is going to going to move them too far one side of the other and move them off of their goal.Rory Gill:
I want to put you on the spot for moment and to helpEirik Davey-Gislason:
There are a few that I can think of off bring this to life. You know, can you think of any other the top of my head, but I'll go with one that just this was actual real life negotiating session that you've been about, I guess, about eight months ago, at this point. I was involved with where the concept of ceaseless curiosity and representing buyers, they're looking for a townhouse in growing this zone of possible agreement have actually led to, Brooklyn. And we've been searching for a few months. They you know, some sort of creative agreement, particularly in the identified a property that they really, really liked in Fort real estate space? Greene. The house, the townhouse was was on the market for 3.5 million. And so I called the listing agent, very collaborative listing agent had a really wonderful experience with her. And I knew her she's very well-known in Brooklyn in that market. So I knew her reputation. I've never worked with her before. But I called her up and I said, you know, I've got clients who are interested - well, here's the deal. We are we're very close to signing a contract with another buyer. And so I'm not sure if there's a deal to be done. So I started asking questions - now, so okay, great. Tell me about tell me about the buyer that you have on the table now? Not - is it strong? Or is it going to is it going to be in contract tomorrow? Tell me about this buyer. Tell me about the deal that you have on the table. And so she started to explain to me that it wasn't the cleanest deal. Oh, okay. So I want to continue down that road. It's just like attorneys, right? I'm not stopping at that question. I want to continue to probe and peel back the layers of that onion. Ultimately, what we found out that the deal on the table was at 3.2. So she was able to give me exactly what the the price that they had. Why? And I instinctively knew she was willing to give me this price, because there's something going on that they don't like, right? They want somebody to come in and upend this thing. So so I said, Okay, great. So instead of saying, Oh, you're willing to tell me the price. Okay, great. Obviously this deal isn't isn't isn't great. You know, instead of, instead of leading her there, I just keep asking questions. It turned out that what was really at issue was that the buyer had come back three different times after the inspection, and that they were starting to really nickel and dime, the sellers. The sellers were very concerned that nibbling as we call it was not going to end. That it was just going to be another 5,000 here or 10,000. there and you know, you're talking about a sizable deal. So you can bite off chunks of five and $10,000 pretty easily in a deal like that. And so they were very concerned about that. And they were financing. My buyers were all cash. So I knew that we had that in our back pocket. I hadn't told her that yet hadn't given her that information at all, because I wanted that to be a source of contrast point between what she had and what we're offering. And until I knew what the current buyer was doing, I didn't want to give her that information. So what we were ultimately what we were able to do is establish a contract timeline, say look, we are willing to we will get our inspector in within 72 hours, we will be in contract within seven days. If we are not in contract in seven days, we give them the ability to say go fly a kite after seven days. So we give them the comfort that we want to move quickly that we're going to get our inspector in quickly. And then essentially what we did, they wanted us to come in $20,000 higher than their current offer. That's what they're asking for $20,000 on a $3.2 million deal. And my clients were said we'll do it at 3.2. But we're not we're not going to give them additional money above and beyond what they already have. So essentially, we said we will give a protection around any inspection items because my clients said we're not going to nickel and dime them over inspection but that's what the other person probably said as well. So how can we give them comfort mitigate mitigate the risk on their side by offering them something of value? So I said to my sellers, look if there's $20,000 of work to be done in the house, once we have the inspector, is that something that you're willing to accept? And I said, if there's work, we assume that there's work to be done, we just don't want to pay more than the person that we are going to be that they're not happy with already. So we went back to them and said, we'll pay $3.2 million. And the first $20,000 of inspection items we will cover. We will pay for within that $20,000 becomes ours, you'll get no argument from us. And now this seller this in this is a pristine Townhome. So they were not concerned that there were going to be $100,000 fixes. But what they're concerned about is these little nickel and dime things that we're adding up to 20-30-40 $50,000. And so when we met their interest, and we said we understand why you're concerned about the buyer you have on the table, we will give you the protection, that we're not going to do what they're doing, give it to us at the same price, and you've got a deal. And they said, Great, there were very, very few items that the inspector had issue with. And any items that he had were $100 items, a few $100 items, $1,000 items, nothing that rose to even to the level of $20,000. So my buyer felt great about it, they got the price that they wanted, their expectations were met. And the seller got to say to this current buyer who was causing a huge headache, I'm sorry, we're going in a different direction. And we also asked them, if we're going to sign contracts and seven days, that if we're gonna say you can tell us to fly a kite after seven days, you give us seven days, and you don't sign the contract, whether that buyer that's on the table right now says tomorrow, oh, there's another piece person on the table, oh, then then I'll sign tomorrow, you give us seven days. And then we have a deal. And they did it and they honored it. And we honored it. It was beautiful. It worked beautifully.Jason Muth:
That's such a powerful story and showing how this negotiation can actually be real life example. You know, I mean, there's a lot of we all went to college in high school and have textbook examples of things. But I mean, you're bringing this down to like, actual every day, you know, use and utility for for your own business and for your students as well. Eric, before we get to some of the final questions, I did want to talk a bit about New York and the New York real estate market and how some of this negotiation that you are just so good at and have taught people what to do and how to do it. How is that impacting what you're seeing in the New York real estate market today, we're recording this in the summer of 2022. People will start hearing this, you know, toward the latter part of the year, we've seen big jumps in interest rates aggressively over the past couple of months. What used to be up here in the Boston Market, you know, lines out the door in the suburbs, where you had multiple agents, directing traffic for open houses has kind of died down a little bit, you know, so what are you guys seeing in the borough's now? And how are some of these negotiation tactics? How are you using some of them in your everyday, you know, buying and selling transactions.Eirik Davey-Gislason:
Now, the interest rate certainly has, at least in the short term has impacted us as well, in our market. And just like in Boston, I'm sure there are several different sub market there are some markets in New York City, Brooklyn especially, or areas, certain areas of Manhattan, certain areas of Queens that are that remain hot, and that were hot, even through the pandemic, a lot of people moving from Manhattan to Brooklyn or moving from Manhattan to Queens.o you have certain areas that remain more attractive or have a are more of a seller's market than others. But it certainly has impacted us across most of those markets with rates increasing the way that that I think is important to navigate this and while taking one aspect of it. It's certainly this affects buyers, as well as sellers. If the interest rates go high, your sellers are impacted because depending on what their next move is that may impact them. Or because rates have gone higher. They're seeing less competition, like you said, there's less lines down the street. There may be above ask offers but there's a settling of those reposition or settling of those above ask offers to 5% where they were 10% or 10%, where they were 20. And so there is this impacts both sides of the transaction or on the buyer side. I just did a YouTube video explaining mortgage factors and how do we understand the impact of an increased rate on our bottom line or as a buyer? How does that impact me on a monthly basis? And how can I look at this rising interest rates as it pertains to my specific purchase goals? And that's what's really important I think for negotiators in this market is to understand that there is no one size fits all. And then unless you understand what the goals and aspirations and needs of your client are until you get to that point, it's going to be a lot harder. For you to guide them to influence them to persuade them, again, they get stuck on the stand, you need to understand the area of concern as, as you're in Fisher talk about to get to the ultimate solution or to get to the ultimate to find the right solution. So, with those with those buyers, understanding their specific purchase goals, and then looking at what does it look like for them to stay on the sidelines? What do interest rates look like in six months or 12 months understand, acknowledge the fact that prices their buying power has gone down and prices have gone up essentially for them because their buying power has gone down? Acknowledging that first huge steps and I get it this is this is difficult, as opposed to some agents will go in and say, Yeah, but yeah, but yeah, but okay, I get it rates have gone up for a point and a half. But if you don't buy now, there gonna be another point higher, that does not feel good for a buyer. If I approach it like, look, I understand this is painful, it's hard to see rates go up by a by a point and a half. But let's look at this in context of the larger goal, the larger purchase, what do rates look like in six to 12? Months? What does your purchase plan look like? For the next if you decide not to purchase? Are you are you? Are you hoping to purchase in six to 12 months? Or three to six months? Or are you is your BATNA just to you know, sit in your apartment that you're in now and rent for another three years? Do you believe interest rates will come down in the future? Do you understand what the overall loss is to you? With this higher interest rate, meaning your rates may have gone up a point and a half. But it doesn't mean that you are out at $8 per month per $100,000, you're borrowing for the next three years? The question is, how does this impact you in real dollars? If rates come back down, you can refinance? How long are you going to be in this home? Five, seven years? How what does that $88 per $100,000, you borrow? How does that translate into the the amount of money it's going to cost you over the next seven years? Well, let's just say that's $15,000. Okay, if we are seeing a resettling or a repositioning of pricing, because of the interest rates, is there a way that you can see some mitigation of that loss in the overall purchase price that you're going to get in a settled market? Can you see yourself refinancing to a different loan product or a different interest rate in three to five years? And if that's the case, then how do you look at that got real dollar costs, as opposed to getting stuck in the fact that oh, my gosh, I could have had a 3.5% interest rate or a 3% interest rate six months ago, and I didn't get it, that idea of loss aversion drives a lot of purchasers, they're so focused on what they could have had, as opposed to really understanding what their goals look like. Now moving forward, that I think for a negotiator, really prepping, understanding, having that idea of strategic empathy with their clients, walking through a plan with them, gains you so much trust, and, and, and helps the buyer through that stand, and helps them through that area of concern and helps them move forward. So part of it, I think, in this market is just preparation, setting expectations. And, and really understanding and being empathetic with your client.Jason Muth:
Eric, you have such a logical approach to all of this like and just how you explain it all. How you ask questions, how you position everything, like worry, I'm ready to buy something from Eric. All right. For Sale, we'll just throw it down there. But no, in all honesty, you really break it down to you know, the sub units and the long term that people need to be thinking about, like don't get too wrapped up in like the headlines in the news. You know, what does that really mean? And then what does that mean for you in the short and long term? And then, you know, you kind of like reposition the conversation with your clients. I mean, this is your negotiating with your own clients, right? Not even with the other side.Eirik Davey-Gislason:
You got to negotiate with your own clients before you negotiate with the other side. Yeah, that's important. IJason Muth:
negotiate all the time as well. You know, like, everything's in negotiation, I just threw something over here on Friday, right on the drive back from Boston, like I told you, like, you know, we don't have to get to that right now. But there is a negotiation that we had. And he's thinking about what his counterpointsRory Gill:
and my toughest negotiations on a routine basis are the ones with my own clients. That's a class unto itself. But yeah, sorry aboutJason Muth:
that. Why don't we get to our follow up questions, then Eric, you could tell everybody how they can link up with you and find you and become a student of yours. So we ask these three questions of all of our guests on the podcast just to get to know you a little bit better. First question is if you can get on stage for a half hour and talk about any subject in the world, maybe not negotiation, but maybe that was your answer with zero preparation. What would it be?Eirik Davey-Gislason:
As cliche as this answer is, it's the truth, my kids If you gave me an hour and just said, Tell me about CCN said, I can talk and talk and talk and I love being a dad, that would be what I would talk about for sure, no question about it.Jason Muth:
It's the why behind the what, you know, it's why we're doing all this to suit ourselves up and set the kids up. That's great. Second question we have tell us something that happened early in your life or career that impacts the way that you're working today.Eirik Davey-Gislason:
I, as a real estate professional, I had very few tools coming into the business was a second career for me, I recall three moments in my early career, where I thought, My career's over six weeks into my career, I made a mistake. In hindsight, it is, it was so minuscule and small, it's laughable. At the time, it was not I thought my world was crumbling. And there were two other times in the first year of my real estate career where that same thing happened. And I got so wrapped up in worst case scenario, and it almost destroyed my career. And here I am, you know, 16 years later, as a real estate professional, and coaching and instructing real estate agents in negotiation tactics and techniques, all of that could have gone by the wayside early in my career. And what I learned from that very valuable lesson was that we oftentimes, especially real estate professionals, and you know, you know, worry training real estate professionals, real estate agents often go to worst case scenario, they immediately shut in, do they immediately go into this? How bad could this get? What we know is that the when things play out, they very rarely play out, in worst case scenario, what we really need to do is think rationally, and sit down and think of creative solutions. And understand that there are several ways to get through a problem that will not result in worst case scenario. And thankfully, those three circumstances in my in my early career allowed me to gain some perspective on where I need to go, when things go wrong. And how I need to focus on solutions, rather than that pitfall of Oh, my gosh, the sky is falling. That's definitely for me, it was a huge learning lesson, and I think led me to more of a career in terms of being a mentor and instructor and a director of development, and then into training and coaching real estate professionals.Rory Gill:
I feel like a lot of great deal of the training resources out there for real estate agents just read as a list of warnings and worst case scenarios. So I can't blame agents for internalizing all of that, whereas some of the same programs should be problem solving workshops instead of just a series of warnings. But absolutely, that's the nature of the industry.Jason Muth:
It's beyond real estate. I mean, I was a sales manager and media for a long time. And a lot of the conversations that have with our salespeople, were about a bad situation that would come up and then you would kind of hold their hand and coach them through how to get through it, and then realize that, you know, it's not the sky's falling, you're not going to lose this account. Because this one thing looks like this, you know, focus on this, instead, say this instead, here's what we can do to make that up, or here's what we could do better the next time and have the conversation, you sometimes have to sit down with these highly compensated people and get them off the ledge, because you know, they're in their own head. And then you ask how the meeting went, or you go on the meeting with them. And then the next day, they come back and they say everything was great, you know, they understood. That's right, and lose the accountEirik Davey-Gislason:
so much more frequently. That's the way it plays out. Right? Yeah. Especially if you have a plan.Jason Muth:
Yeah, absolutely. Final question we have tell us something you're listening to watching or reading these days.Eirik Davey-Gislason:
I'm gonna go with I just watched Ozarks over the last probably a few weeks. And what's fascinating to me and I love I don't really watch TV on a regular basis, I'm going to do it, it's, it's like this, I'm just gonna, I'm just gonna, like get really invested and binge watch, and I haven't watched any of it. And what fascinates me about that show is first of all, you're on your edge the entire time. But the whole show is around negotiation is the thing that's crazy about that show, as I keep, I keep like freeze framing sections of showing like, Oh, I gotta record this three minute segment, put it in my class. And a lot of it's like very hard bargaining, you know, high level negotiations that deal with life and death. But it's really interesting to see the tactics that they employ and how they're just so common in all of our negotiations, whether it's real estate work, or life and death situations in the Ozarks. So that's a show that I had a lot of fun binge watching. I'll mention one book because I should that I've been really fascinated with is and that is Think again, by Adam Grant. His newest book really, really great. It's this idea of looking at the world kind of with a research scientist lens, and understanding, you know how we can we should reframe our initial thought process, and how that can can really lead to more fruitful solutions and negotiations and in life in general,Jason Muth:
add it to the queue, or get it in our audible will listen to it. Well, yes. Yeah, that's amazing. Ozark has come up a couple times. Also, maybe that's like the new Rich Dad Poor Dad. Maybe that's the show that people were listening to. Because it's negotiation. I mean, like it's the new Glengarry Glen Ross. Right. Right now always be closing.Eirik Davey-Gislason:
The steak Nice.Jason Muth:
Yeah. So Eric, thank you. Tell us where everyone can find you. I know that you have some courses coming up. And if you want to become a student of Eric's, you know how people can reach out to you and where they can find you on social media, all that great stuff.Eirik Davey-Gislason:
Yeah, thank you for that, where I'm doing a lot of content producing a lot of short video content is on Instagram now. And my handle is Eric, the expert. And there I do a lot of content around this, the idea of value proposition, the psychology of buying and negotiation tips as well talking about different tactics that competitive negotiators use, things like that. So you'll get short bursts on Instagram from me, I do have a YouTube channel, Eric, the expert, which a lot of my content lives on. I've got two blogs, and they're both at my name, Eric gets listen.com. And one is called Unreal estate. I've been writing that blog for over a decade, it's really just addressing the real estate world client facing and Agent facing ideas of what's going on in real estate, all different types of fun and interesting content. That's called Unreal estate. And then on that same page is a blog called growing the pie, which is my real estate cutter, my negotiation content, where I deal with more negotiation, focused blog posts, a lot of my blog stuff is now becoming much more video based. So those three places are good, good places to find me. I'm on LinkedIn, Eric Degas, listen, and if you do want to take my class, I teach through the real estate negotiation Institute. As you mentioned, I do have a class coming up in September, I'm a I'm an offer, we're going to be here in September, but if we're going to be live in September yet, but if it is, I do have a class through the Real Estate Board of New York, that doesn't mean that you can't take it if you're an agent in Boston, or anywhere else on the East Coast or anywhere in the United States or Canada, we teach all over the United States and Canada. And our classes online now are very accessible. So this is an online class and September the 13th through the 15th. And that can be found on the Real Estate Board of New York's website, rebny.com, our A, B and y.com. Otherwise, for future classes, go to the Rennie the R e ni.com, you can find me and all of my future classes, whether they're live in person or online will be will be there.Jason Muth:
That's awesome. Yeah, we'll link all that up in the show notes, lots of different links for people to find you. We have found some of your great content, I almost referred you as Eric the expert when to introduce you, but I wasn't sure if we should use your Instagram handle, but you know, you are going down that road with your branding. So next time, we'll have you on Eric, you'll simply be Eric the expert.Eirik Davey-Gislason:
And maybe I'll just change itJason Muth:
and you know, we are in competition for the world's best ad 2022. So you know, just you know what, watch behind you because, you know, I like to get a will or and I would Yeah,Eirik Davey-Gislason:
I try to keep all other dads away from my kids. So they only know one one person to vote for. That's my strategy.Jason Muth:
We'll have to get you know our four year consideration packet together Rory and just send it over to to Queens and so he could you know, share it with his kids. Where can people find you?Rory Gill:
People can find me through my real estate brokerage NextHome Titletown Real Estate hometown nexthometitletown.com Or, with my law practice UrbanVillage, Legal UrbanVillage legal.com.Jason Muth:
Great. That's it. It's another episode of The Real Estate Law Podcast. Thank you so much for listening. If you want to reach out to me directly. If you have questions or comments for Eric, or any of our guests or want to be on the podcast, reach out at Jason at nexthometitletown.com. If you are listening and want to give us a review, we'd love that, hopefully be a five star review. We also read all of our comments and any concerns that you have. So Eric, thank you so much for spending some time with us today. I've learned a ton about you know, collaborative negotiation. Did I get that right? Yeah, sure. Any final thoughts?Rory Gill:
No, take a listen to this. This and if you're looking to become an expert, check out Eric's classes and check out some of the core resources that are out there and get up to speed with the rest of us.Jason Muth:
We could go on for hours about this. So you know part two will be coming up in the future. Eric, thank you so much for listening. We really appreciate that you've stuck through this episode. I hope you've learned something. Please take it and go negotiate better as a result and go reach out to Eric when you have questions. So thank you, Eric. Thank you, Rory. And we'll see you next time. Thanks,Announcer:
Jason. Thanks for this has been The Real Estate Law Podcast. Because real estate is more than just pretty pictures. And law goes well beyond the paperwork and courtroom arguments were powered by NextHome Titletown Real Estate greater Boston's progressive real estate brokerage. More at nexthometitletown.com and UrbanVillage. Legal, Massachusetts real estate Council serving savvy property owners, lenders and investors. More at UrbanVillage legal.com Today's conversation was not legal advice, but we hope you found it entertaining and informative. Discover more at the real estate law podcast.com Thank you for listening