Real Estate Negotiations
November 02, 2015 01:20
Last week I had the great pleasure to take the 3rd course in the Master Certified Negotiation Expert training program, and this weekend, I had the opportunity to put my training to work.
I am currently working with an out of town buyer who is interested in buying a duplex. We identified 2 duplexes that were close to the buyer’s criteria, and she decided to write an offer on the better of the two.
The seller was concerned about working with an out of town buyer because the offer was going to be “sight unseen”. We addressed the seller’s concern by having the buyer’s son preview the property.
We were in a competitive bidding situation on the listing because there were 4 offers. We “won” the bidding war even though our offer was not the highest offer. By asking a few questions, I was able to ascertain that a rent back would be of value to the seller because they had not found a new place to live. We helped add value to our offer by respecting the seller’s needs.
I went into the negotiation program with some preconceived notions about winning the negotiation game. The truth of the matter is that negotiation is not about crushing the other party, it is about finding a way to add “bandwidth” or value to the negotiation process so that price isn’t the only issue.
It is also about creating a Win/Win environment, where our side gets the things we need most, and the other side is also satisfied with the outcome.
The closest thing to Jedi Mind Tricks that I learned in the class was the concept of BATNA. This is an acronym for your “Best Alternative To the Negotiated Agreement”. In other words, your backup plan, or the other parties backup plan. Think about the power that your side would have if you knew the other person’s backup plan? How much more power would you have, if you have a viable backup plan in place?
We talked about getting to the core of the emotional drivers that cause people to take a firm stand in a negotiation. If we know why people are taking a stand, and what emotions are under the surface, then we can find a work around. Both parties are better off when we get beyond the “stand”.
The methodology taught in the Certified Negotiation Expert training emphasizes accumulating information that will assist your side. This can be done by doing your homework and by asking a lot of questions. If you do your homework and you understand the market data and the other parties needs, you can craft an offer that is more like to be accepted.
It took six days of class time to complete the Master Certified Negotiation training program, but the knowledge that I gained will last a lifetime… and by the way, the class has already paid for itself :-)