How Important Is Negotiation?

How Important Is Negotiation?
18-Feb-2020 Mark Honeybone

One of the most important part of owning Investment Property is the art of Negotiation.

We negotiate every day and almost every hour of our life. We negotiate with our kids, spouses, workmates, when we cross the road, almost everything we do is a negotiation in life and many of us aren’t that good at it or admit they aren’t that good at it.

Well if you want to have a successful Property career or business that involves property you better start getting good at negotiation.

In property we negotiate with:

  • Real Estate Agents
  • Property Managers
  • Tenants
  • Tradespeople
  • Banks/Brokers
  • Solicitors and Accountants
  • Valuers
  • Insurance brokers plus many many more.

So if it’s so important, why not become damn good at it!

I changed one part of my life personally a few years ago that has made negotiation much easier for me. I was a typical kiwi that didn’t like doing the difficult tasks, that awkward phone call, or talking to someone who had this perceived power over me.

So one day I made a decision where I challenged myself to do something I didn’t want to do every day, or at least one thing that made me uncomfortable doing. By doing that regularly for a few years I found that there is virtually nothing that makes me uncomfortable anymore. It has helped many aspects of my life but in particular it has helped my negotiation skills, and my new normal is doing every hour/day what I would had perceived once as difficult, I now negotiate a good result for myself, but one that I see fair to all parties if possible, and I do it quite seamlessly, it is my new normal.

So then, here are some factors that I think helps with great negotiation:

Knowledge – This is power, the more facts or details you know the more respect you will be shown and the more powerful you have become in the negotiation. If you have no idea about a particular market or area, you can’t successfully negotiate a great price or terms, remember terms are sometimes more important than the price.

Justify – Again when you have the knowledge you can justify it to whom you are negotiating with, in any negotiation I always like to justify why I am trying to get the result I am and how I got there. If they agree or can see it, ‘how can they say NO!!!’. Well they might try, but I think you know what I am saying. It works really well.

Practice – We teach our agents this at Property Ventures, when they are going to a listing agreement or any negotiation, practice in the car on the way to it. Think of the challenges you may get and be prepared for those ‘potentially’ awkward questions you may get. NEVER hope they wont ask them as if you are thinking it, they will be as well. The smoother you are or more confident you are, again puts yourself in a strong position.

Control the Conversation – Carrying on from the last point, you want to control the conversation. However it doesn’t mean you need to do all the talking, shutting up and listening can be massively effective. Ask open questions, but also closed questions where applicable. You must be in control of the conversation.

You can get a Fair Deal (win/win) – The best negotiations sometimes are where both party wins. How good is that. That’s where knowledge, and finding out the most you can about the other party, like what are their needs, can be a great result for both.