Negotiations can be one of the most stressful aspects of closing a commercial real estate deal. Here are 10 insider tactics from our in-house expert who concentrates on the practice areas of commercial real estate acquisitions and development.
1. Focus on the end game. Don’t get sidetracked by emotions, unimportant details, unforeseen challenges or difficult situations that may delay you being able to close the deal.
2. Put it in writing. Make sure that you have all contract offers and pertinent details in writing. This avoids the misunderstandings, misrepresentations and omissions that typically accompany verbal communication, and usually lead to a breakdown in the process.
3. Ask for something in return. When you give a concession, it gives you the upper hand. Take advantage of it. You might not always get what you ask for, but now is your chance.
4. Remember it’s a marathon, not a sprint. If you get to an roadblock, change the focus and resolve less complicated issues. Then go back to the difficult ones. The process will go smoother once you have worked through the easy negotiations, and momentum will help get things across the finish line.
5. Master the art of the trade. Ask the other side for something that isn’t critical to making the deal, so that perhaps you can trade this item away for something more important to you.
6. Be patient. The process will proceed based upon the comfort level of all the parties involved. Maintain focus, but keep in mind that everyone doesn’t always move at the same pace.
7. Stay away from high-pressure tactics. This includes ultimatums, aggressive demands or anything that sounds final or threatening. Most of the time it can lead directly to emotional responses that creates animosity.
8. Work towards a win / win. In order to have a successful negotiation, both sides need to win on some points. Give and take. Strive to achieve most of your goals, but understand that the other party is trying to do the same.
9. Present all of the facts to your client. It’s your fiduciary duty to inform the client of all related facts to the negotiations – good and bad. Don’t push for the higher dollar offer if other terms put the client at risk.
10. Remember who you are negotiating with. Sooner or later, you’ll be back at the table again with the same agent. Don’t burn any bridges by working in a less than professional manner.