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When you hear about someone’s success in a real estate negotiation, it’s natural to assume they got a lower price for their property. Pricing is, undoubtedly, a big part of negotiation, but other aspects of investing can benefit from keen negotiation skills.
Negotiation is considered an art, a skill, and a science all rolled into one. Some people have a natural affinity for it, while others have to practice their form for years before they feel confident. That said, there are strategies and techniques you can practice with to hone your negotiation abilities.
Tactics for Masterful Commercial Real Estate Negotiation
No single approach to negotiation will work for every seller every time. It’s ideal to have several different tactics under your belt if you plan on long-term investment success.
If you feel uncomfortable using a certain method, then simply don’t! Maintaining an air of confidence is half the battle in a negotiation, which means resorting to tactics that make you feel uneasy or unsure may sink your chances of coming out on top.
In any case, some of the most important negotiation tactics to work with include the following:
Stay Calm
Don’t boast, shout, or inflate your value when negotiating. These behaviors will mark you as a novice or someone who lets their emotions rule over rationality.
Be friendly and polite, but listen more than you speak. A pause here and there can make your opponent feel concerned that they are losing your interest and may prompt them to work harder to close the deal.
Be Honest
Dishonesty may get you a great deal today, but it will spoil future negotiations once peers get the word that you can’t be trusted. Lies will always be uncovered, so conduct yourself in a way that projects trustworthiness. Let your actions show people that you are a person they want to be in business with.
Expand Your Knowledge Base
If you plan on being a successful real estate investor, take the time to build relationships with peers, bankers, city planners, contractors, and others in the same field. In doing so, you will learn more about the real estate business and forge professional relationships that may help you negotiate in the future.
Never Appear Desperate
You’ve likely heard the saying, “Never let them see you sweat,” and that adage is never more accurate than it is in negotiation. If a seller senses that you are desperate to make a deal, you are already putting yourself at a disadvantage. Don’t be nonchalant as if you don’t care, but don’t behave as if these negotiations are the most important ones of your career, either (even if they are). There will always be another deal, after all.
Take the Win
A common mistake among inexperienced negotiators is viewing the negotiation table as a battlefield. Negotiating is about coming to a win-win agreement, not crushing your opponent, and it is highly unlikely that you’ll get everything you want in a negotiation. Be happy to leave something on the table for the other side. The next time you conduct business with that person or company, you’ll find it even easier to find a middle ground.
It’s Okay to Walk Away
Not every deal is yours to make. If the price isn’t right or the limitations are too restricting, the deal may not be a good investment for you. Resist the urge to make every conversation end in a contract. Sometimes, you’ll learn something from a negotiation that proves more valuable than a piece of property.
Consult With a Real Estate Attorney
Perhaps the best tip for negotiating is to speak with a commercial real estate attorney before making a major investment. The experts at Merlino & Gonzalez in Staten Island, NY, can advise you on all facets of real estate planning, including negotiating for commercial real estate.