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30 Tips for Successful Real Estate Negotiating

Negotiating is an art practiced by virtually everyone; it is a craft mastered by few.

by Michael J. Lipsey, CCIM, CRB, CPM, MCR

There are many techniques to making negotiation work. If you pay careful attention to the following thirty factors, you should find that negotiating, with all the stakeholders who are clamoring for your attention, will yield more efficiency, less stress, and greater long-term success:

·   Everything is negotiable. “Challenge” means not taking things at face value. You cannot negotiate unless you are willing to challenge the validity of the opposing position. Being assertive means asking for what you want and refusing to take “no” for an answer. Being assertive is part of negotiation consciousness.

·   Become a good listener. Negotiators are detectives. They ask probing questions and then shut up. The other negotiator will tell you everything you need to know—all you have to do is listen. Many conflicts can be resolved easily if we learn how to listen. You can become an effective listener by allowing the other person to do most of the talking.

·   Be prepared: Gather as much pertinent information prior to the negotiation. What are their needs? What pressures do they feel? What options do they have? Doing your homework is vital to successful negotiation.

·   Aim high: Successful negotiators are optimists. A proven strategy for achieving higher results is opening with an extreme position. Sellers should ask for more than they expect to receive, and buyers should offer less than they are prepared to pay.

·   Be patient: Whoever is more flexible about time has the advantage. Your patience can be devastating to the other negotiator if they are in a hurry.

·   State Your Needs: The other person needs to know what you need. It is important to state not only what you need, but also why you need it. Disagreement may exist regarding the method for solving an issue, but not about the overall goal.

·   Prepare Options Beforehand: Before entering into a negotiating session, prepare some options that you can suggest if your preferred solution is not acceptable. Anticipate why the other person may resist your suggestion, and be prepared to counter with an alternative.

·   Don’t Argue: Arguing is about trying to prove the other person wrong. Negotiating is about finding solutions. Don’t waste time arguing.

Negotiating is about finding solutions. Don’t waste time arguing. Quotation

If you disagree with something, state your disagreement in a gentle but assertive way. Don’t demean the other person or get into a power struggle.

·   Consider Timing: There are good times to negotiate and bad times. Bad times include those situations where there is a high degree of anger on either side, preoccupation with something else, or perhaps even tiredness on one side or the other. Plan negotiations to avoid these times.

·   Focus on satisfaction. Help the other negotiator feel satisfied. Satisfaction means that their basic interests have been fulfilled. Don’t confuse basic interests with positions: Their position is what they say they want; their basic interest is what they really need to get.

·   NEVER make the first move. The best way to find out if the other negotiator’s aspirations are low is to induce them to open first. They may ask for less than you think. If you open first, you may give away more than is necessary.

·   NEVER accept the first offer. If you do, the other negotiator will think they could have done better. (It was too easy.) They will be more satisfied if you reject the first offer—because when you eventually say “yes,” they will conclude that they have pushed you to your limit.

·   Don’t make unilateral concessions. Whenever you give something away, get something in return. Always tie a string: “I’ll do this—if you do that.” Otherwise, you are inviting the other negotiator to ask you for more.

·   Always be willing to walk away! Never negotiate without options. If you depend too much on the positive outcome of a negotiation, you lose your ability to say “no.”

·   Do your homework. This goes beyond intercultural negotiations to any encounter—every negotiation requires preparation.

·   Don’t rush to judgment: Negotiations that focus on the interests and needs of both parties are more appealing than sitting in judgment or having judgment laid on you when you’re negotiating.

·   No pigeonholing: Don’t pin a too-specific description on the other party, whether it is their gender, ethnicity, education, occupation, or business center—this is known as pigeonholing. The danger here is making a broad and potentially wrong assumption about someone.

·   Be flexible: Being flexible involves knowing when certain assumptions are wrong—and letting go of them.

·   Bring it with you. Come prepared with all necessary documents and agreements. This applies to various facts and figures, as well.

·   Arrive promptly. Never, ever be late to a negotiation if you can avoid it. It immediately puts the opposition on the defensive, and has loads of negative connotations associated with it.

·   Be “appropriately” polite. Maintain the formality and/or informality set by the meeting chairperson. If the CEO is informal, don’t insult her by being overly formal; and vice versa.

·   Don’t confuse formality with respect. Don’t let negotiating on a “casual Friday” make you lose your manners. Greet and treat everyone with respect, always. Always.

·   Be likeable. If the opposing side likes you, you stand a much better chance of achieving your goals within reason. However, don’t make that your primary goal.

·   Keep an open mind. It is said that an open mind is like a parachute; it must be open to be effective. Listen actively and keep an open mind rather than deal from a position of entrenched antagonism.

·   Keep your emotions in check. The other side will try to make you lose your cool to gain the controlling edge. Don’t let them.

·   Don’t browbeat, denigrate, or insult the opposing team. Remember the Golden Rule: “Do unto others as you would have them do unto you.”

·   Deflect rather than respond to personal attacks. The best way to achieve this is to remain calm. “Killing them with kindness,” is sometimes the best approach to take with an angry or abusive prospect.

·   Resist placing blame. Don’t insist that the opinions and positions of the opposing team are “wrong.” Suggest that they look at it from another perspective.

·   Don’t threaten. Most threats are empty, few can be backed up, and none are EVER an effective bargaining tool.

·   Cooperate rather than agitate. The best way to approach any negotiation is as a team effort. Not your team versus theirs, but all of you in the struggle together.

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Michael J. Lipsey, President of The Lipsey Company , is nationally and internationally recognized as the leader in training and consulting for the commercial real estate industry.

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3.21 Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."