There are so many technical and scientific definitions of negotiation but for me the one by Mark H. McCormack stands tall; “Negotiation is the process of getting the best terms once the other side starts to act on their interests.” It’s very important to remember that from this definition negotiation is a process, a means to an end. The end being of-course to close the deal and earn yourself commission. In most cases agents are motivated by the commission to the extent that they start to budget and plan on the commission before the deal is concluded, counting their chickens before they hatch. Nothing really bad in this kind of behaviour but it’s not encouraged where it makes people pay less attention on the journey, pay less attention on how to arrive at the destination and all energies are focused on the destination itself – the commission.
Below is a small lecture on negotiation:
- NEGOTIATION CRITERIA
- Its paramount for parties to focus on reaching a settlement before embarking on the negotiation process. Thus the agent must be guided by this as (s) he embarks on the negotiation journey.
- Make the process as efficient and effective as possible. In my four years of existence in the property market, both local and abroad, I have learnt that the longer the process takes the lower the chance of successfully concluding the deal. But as you pursue this, don’t forget Robert Green’s 35th Law of Power, “master the art of timing.”
- The negotiation process must never damage the relations between the parties involved, otherwise aim to improve their relations through the successful conclusion of the deal. One way is make the seller feel that they are selling to the best buyer, not only in terms of the financial aspect but also in terms of the emotional attachment each seller has to their property.
- POSITIONS MUST BE DISCOURAGED
- Discourage any of the parties from taking positions as that is You as the driver of the process must remain calm and free of emotions. This will arm you with an open-mind that is objective rather than subjective.
- Encourage each part to state its position in clear and an ambiguous This will invite commitment from either part and if there is no deal, you can get the message early and save your time and other resources. For example if tenant can’t pay rent on the 1st because he gets his salary on the 5th encourage this to be made known to the lessor.
- Always remind the parties that the final agreement will be determined not by their positions but by the market. If lessor is adamant to get $20/sqm for a property that ordinarily would get $8/sqm then tell them they won’t realise their position.
KEY ISSUES TO REMEMBER WHEN NEGOTIATING A TRANSACTION
- The people or parties are different from the task at hand. Thus the seller and purchaser are not the same as the property. You are negotiating the property not the seller.
- Forget about each party’s position but focus on the interests of each part. Therefore you need to understand a lot of information pertaining to the deal. Understand why the seller is selling and why the purchaser wants to buy. Knowing this information will help you think beyond each part’s position.
- Don’t rush into accepting either part’s option. Think deed and consider a lot more options or possibilities before presenting to other part, otherwise you will appear stupid, unprofessional and unknowledgeable. A good example is accepting a mandate whose price is way beyond market. You will lose serious buyers that way.
- Always be guided by market and professional standards.