Sam Lee
Whether you are a seller, buyer or tenant, negotiation is the key to achieving what you want in real estate.
We see a lot of different styles of negotiation. Some people approach the deal ready to lock horns and fight teeth and nail for the last dollar, whilst others come in with an open mind, asking questions in order to try and find the best solution for everybody.
We find that whilst the former finds success in certain situations, the latter often walks away with the most success.
Negotiation is a big topic that includes many variables, each case has to be considered with its unique situational merits. However, there are certain skills and techniques that will not only help you to get what you want, but also help the other party get what they want as well and therefore increase the chance of a successful conclusion.
A good place to start is with finding your BATNA.
What is a BATNA? The BATNA stands for the “Best Alternative To a Negotiated Agreement”.
As the name suggests, the BATNA is the next best thing you can resort to if the negotiation fails and an agreement cannot be reached.
Having a clear perspective of the BATNA can give you a lot of clarity and power while you negotiate and take the emotions out of the process, especially if the counterparty is very aggressive or carries a heavy information advantage over you.
If the proposed agreement is better than your BATNA, then you should accept it. If it’s not, then you could continue negotiating or simply walk away to your clearly defined BATNA.
In the best-selling book Getting to YES: Negotiating Agreement Without Giving In, the authors give 3 suggestions of how to find your BATNA:
Inventing a list of actions one might take if no agreement is reached
Converting some of the more promising ideas and transforming them into tangible and partial alternatives
Selecting the alternative that sounds best
It sounds intuitive, but a lot of people walk into a negotiation without ever clarifying their BATNA. As a result they may make a deal that doesn’t make sense or leaves money on the table.
If you are a potential buyer of a property, are there other similar properties that you can purchase if the deal doesn’t work? Is there something else you can do with the money instead of buying property? What is it? Instead of buying property A and living in it, could you buy two smaller flats C and B and rent A instead?
Also consider what your counterparty’s BATNA is.
Some open negotiators will happily let you know their BATNA, whilst some will be more secretive in which case you’ll have to take an educated guess. If you know what their BATNA is, you won’t waste time offering them something below their BATNA, and you know you’re in a good position as long as your offer beats their BATNA.
I hope that you found this information to be useful, and good luck in your next negotiation!
Sam Lee is a marketing manager and property consultant at JML Property.
JML was established in 1994 and offers Investment Property & Homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.
www.JMLProperty.com
info@JMLProperty.com
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