Six Tactics for Winning Real Estate Negotiations

 by Derek A Smith aka Doctor Negotiator

A question I get quite often is …I hate to negotiate. But I’m a real estate investor so, I have to negotiate. How does a conflict averse real estate investor not only negotiate…but negotiate to win?

The answer is simple.

A very rich man once told me that getting wealthy isn’t very hard complex. There are just a handful of basics I need to master to get there.

This is also true when it comes to negotiations. Master these six rules of negotiations and you’ll get win-win agreements nearly every time.

1. Start with a Fair Price and Offer

There’s no question that significantly overpricing a home will turn off your buyers. Likewise, making a very lowball offer that’s far lower than the asking price will almost guarantee that you will alienate sellers. It might seem obvious but asking and offering prices should be based on recent sales prices of comparable homes. To win more often than not you need to make your offers reasonable and make them fair.

2. Respect the Sellers Priorities

Knowing what’s most important to the seller or buyer can help you avoid pushing too hard on hot or sensitive issues. For example, a seller who won’t budge on the sales price might be willing to pay more of the transaction costs or make more repairs to the home, while a buyer with an urgent closing date might be willing to pay a higher portion of the transaction costs or forgo some major repairs.

3. Be Prepared to Compromise

“Win-win” doesn’t mean both the buyer and the seller will get everything they want. It means both sides will win some and give some. Rather than approaching negotiations from an adversarial winner-take-all perspective, focus on your top priorities and don’t let your emotions overrule your better judgment.

4. Meet in the Middle

Can’t decide who will pay the recording fee? Can’t agree on a close-of-escrow date? Arguing over cosmetic repairs? Splitting the difference is a time-honored and often successful negotiation strategy. Pay half the fee. Count off half the days. Fix half the blemishes.

5. Leave it Aside

Politicians and corporate executives are famous for their “for future discussion” agreements. If you have a major sticking point that’s not material to the overall contract (e.g., the purchase of furniture or fixtures), finish the main agreement, then resolve the other difficulties in a side agreement or amendment.

This technique allows both sides to recognize and solidify basic areas of agreement, then move ahead toward a fair compromise on other terms and conditions.

Summarizing the points of agreement in writing is another helpful strategy.

6. Ask for Advice

Successful investors tend to be experienced negotiators. They’ve seen what works and what doesn’t in countless real estate transactions, and they’ve established a track-record of bringing buyers and sellers together. Consult a trainer or mentor about negotiating strategies, win-win compromises and creative alternatives.

Derek A. Smith is an expert at negotiations.  He has completed doctorial work in organizational leadership and conflict resolution and has eight degrees including three master’s degrees, one an MBA and one in project management.   Derek has taught negotiating and persuasion skills for over 20 years to thousands of individuals while teaching graduate and undergraduate business students at a number of universities, colleges, and private institutions. In the Air Force and Army  he honed his negotiation and persuasion skills as an undercover narcotics agent, counterintelligence agent, and Army interrogator.   His successful military career led to his becoming a senior special agent for four government agencies, including the Defense Intelligence Agency, US Treasury, and Postal Service.  He has perfected his skills working as  a Principle Senior Consultant for such companies as Booz Allen Hamilton, Computer Sciences Corporation, and Robert Half Technology.  Derek is currently building a successful real estate investing and success coaching businesses.

 To learn more or to contact Derek go to http://massiveactionsuccesscoaching.com/