Negotiation and The Art of the Word “No”

By D. Patrick Kilner

“NO” is a powerful word.

The need to say “NO” is common in any real estate deal. In fact, multiple “NO’s” typically define the back and forth negotiations required to arrive at an agreement.

But a “NO” can also kill the deal. There is an art to conveying a negative response that is critical when a buyer and seller want to continue the conversation and arrive at a successful arrangement.

A newer agent recently asked how I get away with saying “NO” for my clients. Here’s my response. It’s a simple three-part rule of thumb learned over a few thousand of negotiations: 

The Rule: 

• First, understand that the word “NO” has the effect of raising the blood pressure of the other side. 

• Second, try to express a “NO” without ever using the actual word. 

• Finally, avoid negativity; express your “NO” with as much charity as possible and always assume the good intentions of the other side.

Here is a simple, real-life scenario:

My buyer has presented an offer that has been selected by the seller. Buyer and seller are now under contract. The contract allows the buyer five days to hire a licensed home inspector to inspect the property, and if deficiencies are found, to formally request that the seller fix the problems or give the buyer a credit at settlement so the buyer can make the repairs. With the help of our contacts in the trades and my 30+ years of experience as a builder, we determine the repairs needed can be accomplished for around $7,500. We formally ask the sellers to agree to make the repairs. The sellers respond that they will not make the repairs, but instead will give the buyer $1,000.

There are two possible ways to say “NO” to the $1,000. 

Without the rule, a first “NO” will too often sound like this: “I just want to make sure you sent this addendum to the correct people because this goofy response is not going anywhere if it is meant for my folks.” The seller responds that it is indeed intended for my folks and I continue to push: “No, no, no, this is not going to work! It costs $7,500 to fix these items, not a miserly $1,000!...” 

Following the rule, however, an alternative “NO” could sound something like this: “Thank you for your prompt response. My folks appreciate that your sellers would consider a credit. When you speak with them please let them know we are encouraged that they are trying to work this out. In my opinion, it’s better to get a credit rather than burdening the seller with having to make these repairs while they are preparing to move. We wish the $1,000.00 was enough to make the repairs. You know, it might have been enough 30 years ago, when your clients bought the home. My folks love the home and want to try and work this out. I hope we are not at an impasse; how would you recommend we move this along and toward settlement with everyone satisfied?”

In this second response, the seller almost always asks how much it will cost. Note, we never mentioned the number.  I tell them and then offer to share a spreadsheet detailing how we came up with the number. Often, the seller agent then shares this research directly with the sellers. Once this happens, we are almost certain to come to a successful arrangement.

The art of saying “NO” without using the word, with charity and assuming good intent is a winner every time in my experience. 

For further reading on the art of negotiation, look into Chris Voss’ book Never Split the Difference: Negotiating as if Your Life Depended on it.