"Never enter a negotiation until you have a clearly defined outcome in mind. Be sure to write it down concisely, and then make it the focal point of your prep work."
Fourteen questions to ask yourself before you begin a negotiation in commercial property
Every negotiation can be very easily broken down into its component parts once you understand what is really going on.
Over the next few weeks, I'll be posing 20 questions, which (when taken together) are intended to help you fully grasp everything involved.
These questions will ensure you are thoroughly prepared, as they will also serve to remind you of the key things you should watch out for "at the table".
Both before (and during) any negotiation, here is what you need to be asking yourself. Are you:
1. Pursuing what you really Want?
Never enter a negotiation until you have a clearly defined outcome in mind. Be sure to write it down concisely, and then make it the focal point of your prep work.
2. Researching your opposition?
This is very important. Learn as much as you can about whom you're up against. Try to discover what it is they want, their strengths and weaknesses, even their likes and dislikes.
3. Preparing thoroughly?
And that means point by point.
It's important to do your homework on the property, the market and the neighbourhood. You do not want to be fumbling for papers, looking for statistics or sales evidence. Instead, you need to focus on the deal and have everything at your fingertips.
4. Considering method and timing?
Wherever possible, start your negotiation face to face. It's always easier for them to say no over the phone or by letter. Furthermore, master negotiators will always initiate the "process" to gain the advantage of both preparation and timing.
5. Achieving early agreement?
Try to get minor agreement on one or two point, early in the negotiation, even if it's just the recognition of a potential problem.
For example: “I think we can agree we have an issue with _________, so let's find a way to resolve that.”
6. Exploring constraints and flexibilities?
Discovering the cards held by the other side can be invaluable. Some of their constraints may be immovable, but you may find some issues to be reasonably flexible.
Likewise, examine and understand your own constraints and flexibilities.
7. Adopting a reasonable attitude?
In many negotiations, you end up forming a relationship with the other side, and this needs to be mutually beneficial. Therefore, recognise and acknowledge their constraints and desires, just as you expect them to recognise yours.
8. Listening carefully?
As you can appreciate, listening is actually quite different from merely hearing, whenever someone speaks to you. Make sure that you fully understand what is actually being said, but more importantly, why it's being said.
9. Offering solutions?
You need to understand that it's certainly not one-way traffic. Part of your role is to come up with solutions.
In every negotiation, you ought to try making a guess as to what objections, issues, and problems the other party is going to come up with. Once you do that, you can propose alternatives, solutions, and flexible outcomes that they may well not have even considered.
10. Properly anticipating?
What you're trying to anticipate here are the other party's reactions, objections, and responses.
For each possible objection or reaction, list what you might be able to use as a response. Try and come up with alternatives and examples, to counter the other party's potential negatives.
11. Seeking out win-win resolutions?
When it's all said and done, Negotiating is really nothing more than give and take by both parties.
What you're seeking to do is trade your least important items for those that will really help you achieve your desired outcome.
12. Proposing options, not ultimatums?
You should only use an ultimatum as a last resort — only when you can back it up and carry it through, and the other side knows that. Even then, you are probably better to seek options and alternatives, which will lead to a positive outcome for both parties.
Whenever the only answer simply is yes or no, someone has to lose.
13. Staying with the big picture?
Don't allow yourself to end up debating just one point or issue. To resolve that single issue will again require someone to lose.
To achieve your desired outcome, always make sure you have a number of variables under negotiation, all at the same time.
That way, you can float “trial balloons” simultaneously in an attempt to trade what are minor issues for you.
14. Adopting persuasive rationale?
Think about what you need to do (or say) to logically convince the other side — without the need for confrontation.
You might not necessarily win every point, but they will have difficulty finding flaws in your logic. Whenever they are ambivalent on a point that's important to you, your logic will win the day.
Bottom line: You're now about 70% of the way through your prep-work for a successful negotiation. And after next week, will have the complete framework to refer to.
Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, his-best.biz, which he updates regularly about the best way to get the most out of your commercial property investment.