After some days if not weeks you have as the professional real estate agent been trying to sell the property to your prospect, and you thought things were going well. However the problems really started when you asked the key questions and tried to move them to a close. They backed off and then gave you a problem you had not heard of earlier in the discussions. Everything you have been working towards now grinds to a halt.
What does a negotiation hurdle in commercial real estate look and feel like? It is when the prospect gets angry, anxious, frustrated, irrational, confused, closed, and the list goes on. It is when they do not seem to be on the ‘same page’ as you and the client. It is when they do not want to listen to you until you solve their problem.
When negotiating in commercial real estate you will strike many points about the property or listing which your prospects regard hurdles or problems. Sometimes the hurdle is simply a ‘try-on’ so that they can get more from the deal. Human nature pushes us Types Of Real Estate Partnerships to gain benefit rather than simply say ‘yes’. The prospect wants to have a win and you are the channel by which they will try it on. Small wins are generally fine, but the bigger problems in commercial real estate really do take some work to resolve.
In this property market the power of negotiation is firmly with the buyer given that the market is slower and buyers are fewer. This creates procrastination in those that can act. They take much more time to make a decision and will ask many more questions. There is no urgency in doing a property deal. Heard this story before haven’t you?
In many cases it will have taken some time to get to the point that the hurdle arises. It may have come from ‘left field’ and given you an issue that you hadn’t considered until then. The first stage in handling the problem is in fully Selling And Buying A House At The Same Time understanding it. Most particularly you should be asking good questions around and about the hurdle so you can get the fullest appreciation of what troubles the prospect. Understand what they are saying and seeing as their problem.
Importantly deal with the prospects issue in a positive way; after all you are the negotiator and the industry specialist (you are the problem solver). Never loose your ‘cool’ in a negotiation; always talk reason and logic. If the pressure rises in a negotiation it is better to step back and give people time. Commercial real estate is built around logic and that will give you leverage. You just need to have enough logical situations and alternatives to use as you negotiate.
The more logic you can bring to the problem the more chance you have to resolve the matter. Telling stories of how other people resolved similar problems can sometime help the prospect think more clearly.
I like to also use the ‘What if’ approach to logic and negotiation when hurdles arise. The ‘What if’ approach should only happen when and if you have fully questioned and understood the problem that the client has. Take each problem individually and pose it back to the client in a ‘What if’ way.
This ‘What if’ approach uses ‘closed questions’ and will push the prospect towards a ‘yes’ or ‘no’ answer. Try these:
What if the settlement were delayed, would that help with your finance approval?
What if the property owner gave you a rental guarantee for the next two years, would that help with your concerns about tenant stability?
What if the tenant leases were renegotiated for longer lease periods would that get you better income stability for the lender to proceed?
What if the vacancy was leased now or prior to settlement, would that resolve your concerns with the vacant space?
What if the property was given the once over by an engineer, would that help with your questions on structural integrity?
The list of questions is infinite but the strategy is powerful. Develop a skill in using ‘What if’ questions to move the negotiation forward. Remember you are the expert negotiator. Do not expect to win every deal but do know and expect that you will do your best in the process.