If you’re interested in investing in commercial real estate, it’s time to bone up on your negotiating skills. Whether you’re buying, selling, leasing or financing, negotiation is an integral part of any deal -- and that’s true even if you’re surrounded by a great brokerage and legal team.
Here’s how to be a better negotiator:
- Do your due diligence upfront. Learn about the market, the property and, perhaps most importantly, about the other party to the transaction. Focus on his or her needs and weaknesses. Knowledge is power, and the more you know, the stronger your bargaining position.
- Plan ahead. Have a goal in mind, whether it’s a bottom-line price, the drop-dead closing date or lease concession. Also, determine which terms are not important and can be negotiated away.
- Never make the first offer. The other party’s offer might be better than the one you were planning to make.
- Leave thorny issues to the end. Establish rapport by working out the easier points first. Find common ground. Give up small issues that don’t really matter to you. Then, by the time you get to the more difficult ones, your opponent might be more likely to make concessions as well.
- Go for the win/win. If you think the goal of negotiation is “winner take all,” you’re less likely to be successful than if you seek a win/win resolution.