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The three crucial elements of real estate (and other) negotiations

Few authors have influenced my personal and professional life as much as Herb Cohen. A key member of the team that ended the US Embassy hostage crisis in Iran, Cohen distills the essence of win-win transactions in business and in life in his no-nonsense book, “You Can Negotiate Anything.”

For Cohen, negotiation is a field of knowledge and endeavor that focuses on gaining the favor of people from whom we want things. It’s as simple as that. In fact, each of us is negotiating all the time both on and off the job.  How successfully we handle these encounters determines the degree to which we prosper and the extent to which we enjoy a full, pleasurable, and satisfying life.

Interestingly, psychologists document that negotiating for yourself is one of the most difficult of all negotiations; it is very hard to negotiate for yourself and to get what you really want. Since many of us only transact property a few times in our lives it is important to have an expert working on our behalf to maximize the result of these negotiations to our favor.

After more than 30 years as a real estate broker, I have found that effective real estate brokers bring Cohen’s insights and principles to the table to negotiate successful transactions on their clients’ behalf. If your broker works for a knowledgeable and competent firm, he or she will have substantial experience from many transactions, and will understand the three crucial elements that are always present in every negotiation, from geopolitical diplomacy to getting a child to behave in a restaurant.

1. Information.  If the other side seems to know more about you and your needs than you know about them and their needs, you will be at a disadvantage. Experts have the advantage in negotiation.  Many factors are involved in marketing real estate requiring the real estate broker to be knowledgeable in many areas, but being an expert in negotiations is of primary importance. After the broker knows who has or owns the property and who wants to buy or lease it, the art of successfully negotiating the best price, terms and conditions becomes the primary role of the broker. As a rule, always collect information and don’t give it.

2. Time. If the other side doesn’t seem to be under the same kind of organizational pressure, time constraints, and restrictive deadlines you feel you’re under, you will find it more difficult to achieve your objectives. Find out the other party’s time line and time pressures, and don’t outline your own for them.

3. Power.  If the other side seems to have more power and authority than you think you have, you will be swimming upstream. Find out who the decision maker is on the other side of the transaction.  Ask yourself: does the person you are negotiating with have the power to make decisions? Are they committed to investing the time to complete a fair transaction? Do they have the right attitude, persistence and willingness to complete a transaction?

How are you positioned for your next real estate transaction? Make sure you have the advantage of expertise in your next negotiation by choosing a professional broker who will use these principles to negotiate fairly on your behalf.

Linford L. Good, Senior Vice President of Brokerage Services