I picked up this book in the airport called “Winning Negotiations” from the Harvard Business Review and I thought it could help with my real estate negotiations. The first chapter is about investigative negotiation and there are 5 principles:
1) Don’t just discuss what your counterparts want, find out ‘why’ they want it;
Finding the other side’s motivations often will tell you whether they are concerned about sales price, timing or terms of the deal. It’s always good to ask the other agent ‘why?’
2) Seek to understand the other side’s constraints;
Often sellers are reluctant to do a deal because they haven’t found a replacement home. In many cases, having a rent back provision or a contingency on finding a replacement home will help get the contract signed.
3) Interpret demands as opportunities;
Often if there is a demand for something the other side will concede something else to get it, in real estate it could be personal furniture, washers and dryer to negotiate in or out of the transaction if other terms are less flexible.
4) Create common ground with adversaries;
Buyers and Sellers naturally demonize each other for seeming insincere or overly pushy. I always remind my clients that the other party is acting just the same way they would act. If things seem to be breaking down I look for things they have in common to make them seem normal or relatable.
5) Continue to negotiate even when the deal seems to be dead;
How many times does a contract fall apart in real estate because neither side can agree to the deal and then a few days later one party comes back to the table and the deal is done. It’s always good to encourage a discussion even after things seem over.
If you have any questions about negotiations in real estate just give me a call at 720.203.9624.