Learn How to Package the Deal
If you’re intending to purchase real estate, you have to realise that there will be some one-to-one negotiations. Therefore, you need a good knowledge, and preferably gain some expertise, as a negotiator.
You may not be aware of it, but there are basically three key elements to every negotiation: Information, Time and Power.
Gathering Your Information
You would have heard it said: “To be forewarned is to be forearmed”. And so, by gathering information … you are forearming yourself.
Find out everything you can about the property you want to buy — especially, about the person (or firm) from whom you want to buy it — and also, about their selling agent.
Most investors assume that their “Agenda” in a negotiation will be exactly the same as the vendor’s. But in all my years of acting for investors, I can’t recall when both parties ever had identical issues.
There may have be some similar items; but never in the same order.
Herb Cohen wrote in You Can Negotiate Anything: “What you want to know going into the negotiation process are … the real limits on the other side — in other words, the extent beyond which they will not go.”
Time Will Change Things
Cohen wrote further:
“Don’t be surprised when you receive the initial rejection to your proposal. No is a reaction … not a position.
With the passage of sufficient time and repeated effort on your part … every no can be transformed into a maybe and, perhaps, eventually, even a yes“.
Quite often … by grasping an unexpected opportunity, quickly … you can pull off an excellent deal.
If you have fast access to money, you can sometimes snatch a property that comes on the market without warning — perhaps one being offered by a vendor, who urgently needs to sell at a reduced price.
But that is more likely to be the exception.
When you negotiate, it’s a real plus to have a fair amount of patience. More often than not, deadlines are fictitious. They are themselves products of the negotiating process … “Let’s get this deal wrapped up by Friday.” And generally, they are far more flexible than you realise.
In most negotiations, you’ll find 80 per cent of all concessions are made in the last 20 per cent of the allocated time.
This is a key point. Because, it means that as soon as you know the other person’s deadline, you also know when most of the concessions will start to flow from their side.
Therefore, always seek to discover their deadline. And don’t begin making any serious concessions (or try to conclude a deal), until you start to enter that last 20 per cent of time available.
The Perception of Power
It was Henry Ford, who once said:
“Power is based on perception. If you think you’ve got it, then you’ve got it.
If you think you don’t have it (even if you’ve got it), then you don’t have it.”
Some people believe …
“Power corrupts. And absolute power, corrupts absolutely”.
However, what they’re referring to is the misuse of power. Power is neither good, nor bad. It is simply a vehicle for moving somebody from one point of view to another.
So, let’s take a quick look at some of the sources of power available to you.
Power of Competition
It’s quite simple really: You’re talking to one bank and you say to your partner, who banks with another: “Look, I’m not sure whether we should get the loan here, or perhaps from your bank?”
Chances are good that the first bank won’t let you out of the door. When you then ask for the amount of money you need, they’re going to find it very hard to turn you down.
Power of Legitimacy
This relates to the power of the “printed word”.
If you think about it, our lives are ruled by written messages: “Keep off the grass” … “Wet paint” (mind you in Australia we seem to be somewhat cynical — we want to touch it first to check) … “No cash refunds” … and so on.
What you need to realise is that all standard contracts evolve by negotiation over time. As such, they are negotiable; and they should be challenged, if inconsistent with the agreement you’ve made.
Power of Involvement
The more time and money you can have somebody invest into a negotiation, the greater the chance you have of them coming around to your point of view. So you never try to conclude the deal at your first meeting. Always find a reason to at least defer the need for a decision, until the next time that you agree to meet.
Quite often, it’s useful to ask the other party how they would like to structure the deal.
Surprisingly, you’ll find that you can live with much of what they’ll propose. So, when you frame your offer (in their format), the other party will find it difficult to reject what they themselves have helped to create.
Negotiating Tools & Outcomes
You basically have four ways in which you can approach your Negotiations.
For even more information, ideas and tips … you can download the FREE eBook: How to Win at the Table.
And just one final thought: Simply having the Expertise can be your most important negotiating tool in itself.
You’ll find the other party will tend to respect you, when you clearly know what you are on about.
For this reason alone (although there are many others) … it’s worth your while quickly learning all you can about Commercial property — so you, too, can take on the mantle of a professional.
Hopefully, you have enjoyed this short introductory course about the ins and outs of Commercial property. However …
This is really just the beginning for you
For only a short period of time, I have a $97 DVD explaining the 8 Secrets for Commercial Property Success — where effectively, all I’m asking you to cover is the cost shipping & handling.
But first, just go across now and watch a short FREE Video … where I’ll walk you through my #1 Secret for Success. Then, you can decide if you want to grab a copy of the DVD.
And if you would also like to learn more about Negotiating … I’ll let you trial the first week of my Master Class, also for FREE as well.
Anyway, I’ll look forward to seeing you across there in a moment.
All the best …
What you covered in the previous RULES …