The fourth in a Series of Persuasion Principles offered by the RENI, we look at the Exchange Persuasion Principle in real estate negotiation. The principle of exchange states that if I do something for you, then you are likely to feel an obligation to do something for me. This feeling of obligation stems from the almost universal teaching that, if someone does something nice for you or gives you something (without asking for it), then you “owe” them something in return.
In any exchange – including real estate negotiations – people are more willing to comply with requests (such as information or concessions) from those who have provided information or concessions first. In real estate transactions there are no shortages of places where you can provide a piece of information or a concession that has no negative effect on the outcome, but still creates that feeling of give-and-take that fuels the exchange principle.
Using the exchange principle when signing on new real estate clients, you might accept a lower listing fee if they commit to a performance bonus when you deliver stellar results. When negotiating with buyers, you could counter a low offer by adding in concessions that the seller would have added anyway (appliances, allowances, etc.) and keep the original price unchanged. In each case, you have given something first – leaving the other party with a feeling of obligation to meet your concession with one of their own.
The exchange persuasion principle is a foundation of successful real estate negotiations. If you know how to make and take concessions in negotiations, you know that you never give without taking – thus keeping the exchange in balance.
Real estate negotiation can make use of many negotiation techniques within one meeting. The next post in this series will be exploring the Sameness Persuasion Principle use for successful real estate negotiations.