Originally posted by Danny Johnson:
The attorney proceeded to try and negotiate everything, including price, which of course had already been agreed upon.
This reminds me of a "negotiation" I had yesterday...
I'll occasional pimp out my project manager and crew to do rehabs for other investors, for a fee. There is an investor we work with, and all his deals are handled by his right-hand man. Well, this investor has a rehab coming up, and I negotiated a price with his right-hand man. As usual, it's was a very good price for them, as I'm just interested in getting my PM some extra cash on the side and keeping my crew extra busy...we don't need the work and it would probably be easier for me personally if I didn't have my guys do it...
Anyway, I meet the actual investor at the property, and while he knows that we already have an agreement on price (at $4000 for the whole job), he tells me that he thinks $3000 is more fair for this particular project.
I basically replied with, "I already agreed on a price with your guy, and I've already starting getting contractor bids, so it's a little late to start renegotiating now."
He replied with, "We don't have a signed contract yet, so it's definitely not too late to renegotiate."
I replied with, "Good point. I hadn't considered that. Okay, I now want $4500 for this job. It's non-negotiable. Take it or leave it." (I often do this when someone tries to renegotiate after an agreement has been reached, even if it means spiting myself)
He started balking that I was being ridiculous, and I walked out. I told him to call me if he wanted to move forward for $4500.
His right-hand guy called me today and said, "How about if we just stick with the $4000 we originally agreed on? I think that's fair."
I told him that I thought $4000 was fair also, but that there was a surcharge of $500 for having to deal with this guy who didn't want to honor an agreement. I then told him to call me if he decides to pay $4500.
We'll see if I hear from him...I'm guessing I will...
Moral of the story #1: He who needs the deal the least will often get the better deal. I personally don't care if he ever calls me back or not, but I know he wants this house done in about 2 weeks, and if he has to switch gears now, he'll never make it.
Moral of the story #2: If you don't negotiate in good faith (in this case, sticking to a previously agreed upon price), you deserve to get screwed.
Moral of the story #3: Sometimes you have to act a little irrational during a negotiation to keep the other party on his toes and keep him from trying to negotiate too much in the future. It comes with risks, but can definitely be worth it.