Life’s Experiences, Lessons learned, Classes taken, Books and Articles read, and then summarized for your viewing pleasure in the following article on Commercial Real Estate Negotiating tips
- Don’t let contract negotiations go back and forth more than twice – the more back and forth, the harder it is to get a deal done. Round 1 and both are focused on the sale. Round 2 and the focus changes to money. When you get past Round 2 parties can begin to nitpick, start to resent each other and lose focus. Issues can then become personal.
- Focus on completing the sale. Don’t get sidetracked by emotions, unimportant details, unforeseen challenges or difficult situations that arise.
- Endeavor to put all contract offers and subsequent pertinent details in writing. This avoids the misunderstandings, misrepresentations and omissions that typically accompany verbal communications and lead to a breakdown in the process.
- When you give a concession, ask for something in return. You might not always get it but the fact that you’ve given in on an issue ought to give you the standing to ask for and often times receive something in return. Just by asking and not receiving you avoid the other side continuing to ask concessions of you and your Client.
- It’s best to not take the first offer too quickly or too easily. Wait at least a few hours. When talking about it with the other Agent don’t talk about the ease of getting the property under contract. The other side will immediately think they made a bad deal and from that point forward the closing process can become more difficult than it should be.
- If you get to an impasse, change the focus and resolve less complicated issues. Then go back to the difficult ones. The process will go smoother and once you have worked through the easy ones, momentum will help get things finished.
- If you aren’t sure how to reply to a request or if you know the answer but want to soften the blow, use the “limited authority” approach. “I’m not sure, let me check with my Partner”, or “Let me take a look at such and such data” so that you can better provide a more meaningful reply.
- In order to support your position, rely on precedent. Suggest that this is the way that issues like these are typically addressed or that you’ve done such and such before with great success.
- Ask the other side for something that isn’t critical to making the deal so that perhaps you can trade this item away for something more important to you.
- Negotiations are a process. It doesn’t matter how quickly you want things to move, the process will move based upon the comfort level of your Client. Maintain focus, but keep in mind that the process will most likely not move as fast as you want it to.
- Stay away from high pressure tactics including ultimatums, demands or anything that sounds final and/or threatening. Most of the time it doesn’t help and it can lead directly to emotional responses that then creates animosity.
- Work towards a win / win. In order to have a successful negotiation, both sides need to win on some points. Give and take. Strive to achieve most of your goals understanding that the other party is trying to do the same.
- Present all of the facts to your Client. It’s your fiduciary duty as a Realtor to apprise the Client of all related facts to the negotiations – good and bad. Don’t push for the higher dollar offer if other terms of the offer put the Client at undue risk.
- Remember who you are negotiating with. Sooner or later you’ll be back at the table again with the same Agent. Don’t burn any bridges by transacting in a less than professional manner.