How important is negotiation?
The ability to negotiate is crucial to success - Mark Honeybone gives his top tips on how to master it.
1 March 2020
One of the most important parts 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, and when we cross the road. Almost everything we do in life is a negotiation and many of us aren’t that good at it or admit we 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
• solicitors and accountants
• insurance brokers, and many more.
So, if it’s so important, why not become damn good at it? Personally, I changed one part of my life a few years ago and it has made negotiation much easier for me. I was a typical Kiwi who didn’t like doing the difficult tasks, that awkward phone call, or talking to someone who had 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 what I would have once perceived difficult.
‘I was a typical Kiwi who didn’t like doing the difficult tasks, that awkward phone call, or talking to someone who had perceived power over me’
I negotiate a good result for myself, but also one that I see is fair to all parties if possible, and I now do it quite seamlessly.
Here are some factors that I think helps with great negotiation:
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.
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 a specific result 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.
At Property Ventures we teach our agents, when they are going to a listing agreement or any negotiation, to 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 won’t ask them, as if you are thinking it, they will be as well. The smoother you are or more confident you are, puts you in a stronger 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.
A Fair Deal
The best negotiations are when both parties win. How good is that? Finding out the most you can about the other party’s needs, means you can achieve great results for both parties.