12 Keys To Negotiate The Best Deal Ever - Part 3

In this article, we address the next four keys... the remaining four will follow in the fourth article.

5. Build a relationship. To get what you want or more you should not try to squeeze and intimidate some incredible terms out of your opponent. That defeats the very purpose of the craft of negotiation. Instead, look for the Win-Win situation, where both parties can work together to solve the others needs. Be cooperative with people; we all respond well to positive human behavior.

In 1981, one of my European investors hired a lawyer who went in for the kill in a water bottling project long before bottled water was popular in CA with the city of Palm Springs and the Indian tribes. The lawyer forced their hand to get the most he could. Although my client got his permit, his lawyer alienated all parties involved.

My client ended up with severe restrictions on what could have been a mutually-prosperous water bottling plant. The lawyer blew it and my investor ended up losing a lot of money and abandoned the project.

Negotiation is a highly efficient form of communication and requires trust. Good business and personal relations will make it mutually beneficial. Most people with whom you negotiate, you will see and negotiate with again.

This key came into play when I wanted to purchase a foreclosure property from a bank. The banker needed to get a price out of an apartment building and not lose face with the regulators. They had already agreed to sell below market price. Although I could have driven harder for another $20,000 decrease, I put myself in their shoes. Because I played fair, they offered me a loan with lower interest and a lower down payment. That saved me $80,000. It was a win-win deal.

Remember, good negotiations make repeat performances. The bank had other problem properties and they gave me the first right of refusal at below market value. We each got a fair deal consistently. Together, we negotiated on 15 other properties that earned me over a half-million dollar profit.

When I enter the room for the negotiations, I never sit across from the other person like an opponent. Instead, I sit next to him/her and have both of us look at a white board where we list the give-and-takes we need to solve.

6. Use the K.I.S.S. rule. Let me see if I understand your offer, said the nervous property owner. You want to buy my property using a double-crank, triple-wrap, nothing-down, cash-back-at-closing technique you learned at a get rich quick seminar... because it will be best for me.

I see rookies and sometimes seasoned investors continue to make complicated creative offers that confuse sellers and make them suspicious. I have seen offers that contained every power clause, secret phrase and technique there is. Let me ask you, what will you do if you receive this kind of offer? I do not know about you, but this kind of offer will make me run in the opposite direction.

My advice is to use the K.I.S.S. rule, keep it short and simple. In my negotiations and offers, I only use words and phrases that are easily understood. However, make sure you specify on the offer who is going to pay for what: i.e., title company, escrow, surveys, home owner warranties, appraisals, termite, repairs and preparing the unit for move-in, etc.

Whatever you do, keep it short and simple, but at the same time keep it clear and specific. And yes there should be contingencies: inspection of books and records, thorough physical, termite, toxics as well as your ability to obtain reasonable financing.

Unless the seller is carrying the mortgage, make sure you qualify for a loan at reasonable terms.

However, if you can and are willing to buy the property for all cash, come and see me.

7. Exercise patience. Never lose your temper. Take your time. Whoever negotiates in a hurry will make the most concessions. Focus on terms instead of peoples manias. Wait out their anger, intimidation, impressive jargon, guilt trips, and tendency to fake it just to manipulate you. Mind your temper; let the numbers decide not the emotions. If the other party will not budge, I can always postpone the negotiation until the next day, or I can walk away.

Do not accept the first offer and don't make one concession without asking something in return. Make sure your initial proposal includes a few terms you can willingly sacrifice, that will not affect the bottom line. Negotiate value, but not price.

Getting angry in a negotiation only closes the doors of communication, and impairs your judgment. In a few rare cases, I have been in negotiations with people who have really made me mad. They have been unreasonable, rude and offensive. I have felt like turning the table on its end, and storming out the door. I have had to train myself to stay cool in these situations, to keep thinking clearly. If you can stay calm when the other party is angry, you get the upper hand.

8. Turn a conflict into a conflict resolution. Negotiations are not one-time deals or competition events, but a process to work out agreeable terms. Instead of turning it into a conflict, turn it into a conflict resolution. Watch how non-verbal cues reveal the other partys interest. Wait for them to make the first move; never negotiate against yourself by proposing a concession you are willing to make.

Use open-ended questions that stimulate solutions. For example, Could you help me see what you need to feel good about this? Listen actively for the answers about the others concerns. What I do is rephrase their important points; add in my own position; ask another question; and then, shut up. Follow these steps and you'll learn your and their best alternative to negotiating agreement. Beyond arguing for what you each want, you can settle for what you both realistically need.