PB-187 Key Negotiating Strategies - Property Inc

[ Podcast Transcription ]

I’m Peter Boyd McNess, and he is Chris Lane, and welcome to another of these regular property briefings.

And a warm welcome to you, Chris. Well, once again, it’s really great to be here. A couple of months ago, there was a request for you to take our listeners. Behind the scenes and explore what really goes on during a negotiation. Well, following on from that earlier query, it looks as though someone would like to know what your key negotiation strategies are.

So, where would you like to start? Well, I guess what most people don’t realize is that negotiation is something that we all do every day, whether it’s at work or at home or in our personal lives. And so, hopefully, these key strategies we’ll cover today will provide our listeners with some handy tools designed to help you catch a…

The an advantage whenever you need it. So let’s start with the first one, which I think is very important, and that’s setting your boundaries. Now the best approach is to let the other party know upfront which items are off the table, rather than create any misunderstandings or disappointments. Down the track, and yet sometimes these can change as the negotiation unfolds, in which case you need to convey any boundary changes straight away.

The next key strategy is what’s called reference to a higher authority. So this can occur after you appear to have reached an agreement and suddenly the, the other party claims that they will need to just confirm it with someone else being the higher authority. Now, in most cases, this will be a legitimate strategy or appeal.

It’s, sometimes though, it’s simply a ploy to gain a strategic advantage. Now, to counter this, you should suggest negotiating directly with that higher authority to ensure that the deal is properly presented by you. Next, reaching your limit. Sometimes. You or the other party might claim to have reached the limit and can’t progress things any further.

As such, you’ve done your best, the best you can do anyway, and the deal needs to be concluded on the current terms or not at all. Now, as you’ll appreciate, every commercial property deal has a number of variables. Things like price. The deposit, the settlement terms, due diligence, and so on. And so, you would claim to have reached your limit when no further concessions or variations are possible on your part.

In other words, you’ve reached your bottom line, or what you call your take it or leave it position. And if the other party chooses to leave it. You then say that you need to refer to your higher authority to see if you can plead for a change in the stated limits. And what about making concessions? Well, you need to know how to make concessions.

The secret here is to make them clearly, along with some drama, ensuring the other party realizes that you are making a concession. And what you expect in return. Sometimes, you can frame the concession with certain conditions attached and if the other party balks at those conditions, well then you simply withdraw the concession being offered.

If it’s done well, the process can help you build trust and mutual respect. As you move towards a win win outcome, it’s simply something you need to do as part of reaching an agreement. From memory, using silence strategically is one of your favorite strategies. Well, yes it is. And you need to use silence strategically.

There are times during a negotiation when you need to ask a question. The answer to which will commit the other party to a specific issue. And after doing so, you simply shut up. You see, silence creates space the other party needs or feels compelled to fill, usually contributing something useful to help resolve the issue.

And from my experience, the longer the silence, the more likely you are to have them respond positively. And when this strategy is used on you, Recognize it for what it is, ignore the focusing question, and immediately reply with your own question to regain control. I gather some people often appear to be in a hurry to conclude a negotiation.

Is that really a good approach? Not really. You see, negotiating is a process, not an event. Remember, you don’t need to finalize everything during the first meeting. In fact, it can sometimes be to your best advantage to slow things down, especially if you’re not making the progress you would like. By respectfully seeking a deferral, the other party’s circumstances might change and maybe some new information could emerge to help resolve any likely impasse.

However, you may feel the other party is using this as a delaying tactic, simply putting off the inevitable, which may well be a failed negotiation. In which case, ask what further concessions or changes are required for them to reach agreement. And then you need to make a judgment call on whether you feel a deal can actually be reached.

How do you handle things when someone actually says no? Well, that’s an interesting one because no is rarely a refusal. When someone responds with no, it doesn’t mean that they’re taking a formal position. Generally, all they’re saying is that. I don’t yet have enough information to reach the decision you’re asking me to make.

Now often, simply by asking why, will often reveal things that you’re unaware of and could easily accommodate. And so with gentle persistence in providing the information required, you’re more likely to change a no into a maybe, and usually change it into a yes. A yes. Look, once again, the insights you’ve given us today are invaluable.

So on behalf of our listeners, I just want to thank you. Well, perhaps the most important thing you could take away from what we’ve just covered is that negotiating is a teachable skill. It’s something that you can easily learn and with practice you’ll soon become rather good at it. Well, that’s very encouraging.

Thank you, Chris. As always, it was my pleasure.