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Are You a Good Negotiator?

Every top-tier loan officer excels at negotiation. Mainly because it's a skill that, once mastered, may become the deciding factor in many of your closings. The goal of good negotiation is to come up with a solution that offers advantages to both parties at a price that will profit your clients and you. There are many ways to improve your negotiation skills, and here are a few things I’ve learned along the way that may help:




Compromise Isn’t Always the Solution

Many negotiators think that they will get the best deal by raising the price slightly above what they want, and then undertaking a series of compromises from both sides until an agreement has been reached. However, negotiation and haggling are not the same thing. It’s always helpful to have something in your back pocket that you can give away in exchange for a concession from the other side; but in most cases, getting the best deal for both sides has nothing to do with the price.



Offer Variety

Widening the spectrum of what you're offering instead of just pursuing one particular offer may help you support your sales pitch with the promise of variety. It often has the beneficial side-effect of making your prospect feel more in control of their decision, because they have options to choose from — and even if they don't choose any of those initial options, you'll be able to analyze their thinking process better and come up with the best solution to meet their needs.



Leave Emotion Out

Offhand, the only place I can think of where emotion is appropriate at the negotiation table is in marketplaces in the Middle East. Assuming you’re not honing your skills for that reason, all other negotiations should be free from emotion. I know how frustrating it can get when you just can't seem to reach an agreement, or how hard it is to keep your cool when a deal is important to you; but getting too emotionally invested in a negotiation can result in breaking trust, rupturing the lines of communication, or even losing the deal altogether.



Sharpen Your People Skills

People skills deserve attention — they’re the one thing that might make the biggest difference in improving your closing ratio. Active listening (more on how better listening can benefit loan officers, here), asking the right questions, observing body language, being relaxed, warm, and open for discussion… those are the things that will make you an expert negotiator. Get to know your prospects personally, and once you do that, it will inform where to go next.


Improving your negotiation skills will lead to greater confidence, stronger connections, and more closings. These are just a few of the ways you can sharpen those skills, but if you have any others, I’d love to hear them.


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