I just returned from our CORFAC International conference in Minneapolis, MN. One of the session topics was “The Art of Negotiating.” In an earlier blog post, The Psychology of the Negotiation, I focused on just four strategies. Since I find this part of my business so fascinating I wanted to share a few more techniques that can be very effective.
Power of Competition
BATNA is an acronym for “best alternative to a negotiated agreement.” Before beginning the negotiation it is critical to know the best option available if an agreement cannot be reached. The other party has to know that I do not have to do this deal. It must be established that if favorable terms cannot be achieved I will simply move on to the next option. The better the BATNA, the more power I have.
Power of Risk Taking
Going into the negotiation, I must be willing to lose, to be comfortable with walking away. I have to demonstrate emotional intelligence and never take a risk out of pride or impatience. This is critical to the personality of a professional negotiator.
Power of Investment
Knowledge is power. As a commercial real estate broker, before entering a negotiation, I need comprehensive market statistics, comparable lease and/or sale data as well as up to date knowledge of the current competition. I also need to know as much as possible about the asset I am negotiating on. Factors such as location, environmental condition, deferred maintenance and property amenities to name a few can all impact the value.
Power of Precedent
We’ve all heard (and we’ve all said) “that’s the way it’s always done in this market, I’ve never seen it done differently”. Most people will believe their experience is the only experience there is and if they have not seen it done, it has not been done.
The reality is that just because it may be common practice in one geographical area, it does not mean it can’t be changed. People are naturally creatures of habit and typically resist change.
There are many more powerful negotiating techniques that I will share with you at another time. Do you have a favorite?
Posted by Barry Stuart