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Why should you sometimes go slow when negotiating real estate deals? It’s all about the power of time investment. Let me explain with a story.
One of my less-pleasant experiences selling real estate was when I sold a home for a real decent guy, and the buyer was a lawyer. I was new to real estate, and this lawyer knew all the angles. Without getting into all the dirty tricks he used, I’ll just say that the buyer had everyone involved angry, frustrated and worn down.
As a final blow, he arbitrarily decided that he wanted the price lowered by another $5,000. Now that’s hardball negotiating. The seller was almost ready to throw away the whole deal, but he had been trying to sell the home for two years, and we had been working with this buyer for months. None of the agents or brokers involved wanted to see all their effort go for nothing.
There were three agents under two brokers involved in the sale. We all agreed that suing the buyer wasn’t worth it. Instead, we gave in. The seller had enough of the buyers tricks, so each of the other five parties to the sale (3 agents, 2 brokers) agreed to each forfeit a $1,000 of the commission, just to make the deal close.
This is an extreme example of using “time investment” to your advantage. After investing so much time, none of us wanted to lose everything. The lawyer knew that, and used it. In this case, there was nothing in the contract that allowed him to renegotiate the price, making it unethical in my mind. Still, it was effective.
Negotiating Real Estate Deals – Ethically
In other cases, it is just good negotiating. If you want to get the best price on a car, do you think you’ll get it after spending two minutes with a salesman? Let him invest two hours showing you cars, and he’ll be begging the manager to let the car go for your low offer. The same is true with real estate negotiation.
Remind the seller about time, to let him remember the time he has already invested. To do this politely, say something like “Look, neither of us wants to lose the time we’ve spent on this and start all over, so why don’t I…” Then offer some small concession.
He is subtly warned that he could lose his whole time investment with nothing to show for it. The words “start all over” may even scare him. You set the scene, and then you offer a way out. This is non-offensive too, if done right. You say “Neither of us…” to let them know you’re both in the same situation, and it’s not just you threatening them.
This is, of course just one technique of many for negotiating real estate deals. Take the time to learn several, at least.
Now that you have come to the end of ViaGuru – Orange: Infrastructure Projects Consulting, Buy and Sell Real Estate, Hotels, Commercial and Residential in Delhi, NCR – India, I hope all the doubts that you had have all been cleared. Wish you are satisfied!
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