06 Dec Knowledge is Power
Touring a sausage factory is the only time knowledge is dangerous. If you actually see how sausage is made, you likely won’t be inclined to eat it again. Other than that, knowledge is tremendously powerful. Knowledge is the primary goal of negotiation strategy; and for good reason. When you have knowledge of the other side’s situation and motivation(s), you can craft your strategy accordingly. Knowledge might even alert you early in negotiations that you are wasting your time.
Spend a little time finding out what motivates the other party. Is it pain or pleasure? While greed is a powerful motivator, it rarely is as strong a driver as pain. In real estate, parties to a negotiation are most often Tenants and Landlords or Buyers and Sellers. As a Tenant or Buyer, invest a little time learning about the Landlord or Seller’s stressors. Are they under financial pressure? Is timing of a transaction critical to them? Could they be using you to negotiate a better deal with someone else?
As well as knowing the other side’s motivations, you should know you own. It is assumed you know what they are. Remember, they always fall into two categories: 1) pleasure, or 2) pain (avoidance). One of the most powerful of motivations for Tenants and Buyers is Ego. Though it might not rise to the top of your list, it hovers around in the background nonetheless. Real Estate transactions tend to be high profile – a sign of success and achievement. It’s the perfect Petri dish to grow some giant sized Ego. And, guess who knows a lot about Tenant and Buyer egos? Landlords and Sellers of course!
Having a savy, insightful broker on your side will improve your negotiations odds. The right representative will help you make smarter, financially prudent real estate deals. A broker with finely honed negotiation skills will help you understand the Landlord or Seller’s motivations, and help you to keep your motivations concealed from the other side. In the end, it’s up to you. You can pad your Ego, or pad your wallet.
To learn more about real estate negotiation strategies and tactics, contact Gibson Company today.