Few months ago, a client walked up to me to express his joy and excitement over his newly purchased real property, a piece of land, in Otta area area of Ogun State. It was special to him and he was filled with joy to have successful purchase of the land because of the previous failed attempts he had in the past, he has been duped severally.
Out of curiosity and to flow with the excitement, I asked how many plots of land? and he replied half a plot and he quickly added that he would start construction immediately to avoid problems of omo oniles who are still in a happy and satisfied mood with their own share of the deal and his plan was to finish construction before omo oniles fritter away their share of the deal to avoid problems or troubles of asking for additional money.
He carried out all the negotiation by himself and I was not surprised because I understand he is someone who never like the idea of involving professionals or seeking expert opinion in achieving his goals particularly real estate investing because he loves free services and never like the idea of paying experts for their service and to him it is a waste of money.
He is the type who loves to disregard the essentials required for a successful real estate investing due to the extra cost or expenses to the purchase of the real property, he always want to avoid performing due diligence, survey, appraisal etc even when he has money to pay for these professional services.
He was so impressed with his little achievement that he promised to take me there, when we got there, he showed me the piece of land he bought and I detected that he was sold a quarter of a plot and not half plot as he claimed.
I explained to him what a full plot is in square meter and what it could be depending on its division into two equal parts. He was not happy with this development and was not only ashamed of himself but also to seek redress because at the end of the transaction he felt so happy and thought he had outsmart the seller not knowing the seller had a better plan.
It was obvious the seller sold a quarter of a plot of land as half plot of land and he thought he had beaten the seller black and blue until I burst his bubble, interestingly the documentation for the purchase had in it half plot which sometimes is possible to be faced with this challenge.
The original document carries half plot but due to on going development in the area, people taking part of the land for building or making pathways or access roads can make a half plot of land turn quarter and if you ask me this best explicates why it is necessary to carry out survey before attempting to make payment for any piece of land.
I know that there are millions of people out there who find it extremely difficult making profit with real estate, many are struggling and battling with handling real estate transaction processes successfully particularly when it has to do with having official and formal discussion on real estate with the aim of reaching a mutually acceptable agreement.
I know for sure and I can tell you in clear terms that negotiation in real estate be it financing, funding, mortgage, sales, purchase, lease, dispute etc is a rarefied aspect of real estate investing enjoyed and monopolized by a few experts in the field while many struggle with negotiating deals in real estate sales or purchase transactions.
Without mincing words, this best explain why real estate investors, homeowners, occupiers and wanna be landlords often time get frustrated, disappointed, worried, dissatisfied when negotiating a real estate deal, issues and concerns due to poor, communication, networking and especially negotiation skills.
For this reason, I felt concerned and I decided to write something on this topical issue to educate and edify the general public particularly real estate investors, lenders, sellers, buyers, homeowners and occupiers on how they can improve and enhance their negotiation skills by showing them smart ways to successfully achieve this.
Patently, negotiation in real estate investing is very important and as a matter of fact it is a must have skill for all parties in real estate transactions not only to successfully invest in real estate but also to manage investment properties and occupiers efficiently and productively.
It might interest you to know that seasoned and experienced real estate investors make their profit at the point of purchase of the property and not necessarily when selling off the property, they always find a way to lock in their profit margin and some necessary expenses into the maximum purchase price they can realistically pay for the property they intend to purchase.
This approach ensure they don’t pay too much for the property, have due diligence performed and this can only be achieved with great negotiation skills which can be learnt and is hugely attributed to understanding the social psychology of the other parties involved in the negotiation process.
We all know that investors negotiate financing and funding of projects, sellers and buyers negotiate real estate sales and purchase transactions and property owners and occupiers negotiate lease as well as settle conflicts and disputes in mediation and court which also involve series of mediation and negotiation processes.
These negotiation processes can be an arduous task, burdensome and frustrating for many and sometimes it is like having a job interview which entails and requires you to prepare and list your goals and objectives in the negotiation process or having a proposal or presentation to defend as well as help you answer articulated questions in the case of seeking funds to finance a building project.
If you must successfully carry out a real estate negotiation, you must be vast in real estate investing knowledge and must of course understand the social psychology of the parties involved as stated earlier and this can be achieved by studying their attitude and behaviour but you must avoid fundamental attribution error in doing this.
Apparently, a person’s behaviour could only be passive, assertive and aggressive and you must also understand that peoples’ behaviour don’t fully represent their attitude to simply put it our attitudes as human being may not necessarily determine our behaviour except when we display excessive consciousness of our attitude with obvious vested interest.
What many people fail to suss in real estate transactions negotiation is that all parties involved came to the negotiation table with their clear and well thought out goals and objectives directed to achieving something out of the discussion, as you have your plans to outwit them, they also have their plans well thought out to outsmart you and ironically all parties came to win.
Unfortunately, If you disregard or waive this vital first step or aspect of negotiation process, that allows you to make a list of what you intend to achieve in the negotiation like in the case of my client’s story I shared earlier then you are set for real estate investing failure, bad purchase, bad investment decisions, waste and splurge.
And as a result you will not get great value for your money at the end of the transaction because without a well thought out plan emotions will easily override the investment plan especially when it comes to negotiating for great deals and making investment decisions almost immediately.
It is important for all parties to skillfully and tactfully make out plans on how to achieve a great, competitive but fair and reasonable real estate investing deals, having in mind what you can accept or let go in the discussion and what you can’t that will surely give a sign to back out of the negotiation process.
I can argue that the way people buy products and services often time is the same as the way they sell products and services. Let me expatiate on this, If you are the type who make use of professionals for your real estate purchases, you would likely make use of professionals when selling the real estate property.
Conversely, people who do it differently certainly have a way they act, react and respond to sales of products and services and I believe or my conjecture is that they will act, react and respond similarly to purchase of products and services because our behaviour and attitude determines all of these traits.
Hence if you pay attention and watch out for specific attitude and behaviour involved in a real estate transactions negotiation or dispute mediation, you could easily, smartly and tactfully help yourself out by noticing some of these traits in the parties to help you deal successfully with the situation.
It is highly important to look for traits that can help you prepare for the negotiation and usually some of these attitude and behaviour are always feel expressed and brought to the table along side the parties involved in the negotiation all you need to do is to study and observe them to help you find answers to questions that can give you a edge over them.
If you are home and dry with your goals and what you want in the negotiation then it is necessary to find out and understand exactly what the parties want in the negotiation, find out there ability to take or make decisions, level of professionalism and education, get to know if they are introverted or extroverted and of course determine how much they cherish or how important the personal or business relationship you have or about to have mean to them.
If you can successfully do this, to figure out all these qualities in their behaviour and attitude during negotiation then you can now find a way to relate with them by adjusting your own negotiation personality and approach to fit into any of these garment of characters you are up with.
However, it is very important to first understand the situation from your perspectives by clarifying and asserting your goals in the negotiation, also from the other parties’ point of view to understand their goals, needs, objectives, issues of concerns as well as the circumstances surrounding the negotiation process to help you make the best investment, mortgage, lease, conflict resolution decisions with remarkable aplomb prior to negotiation day.
The great news is that you can achieve a smooth, hitch free and successful negotiation, If you sift through the information you have gathered and by applying the highlighted points discussed above to help you understand as well as determine what is useful and what is important to achieving your set goals and objectives in the negotiation.
If the negotiation process or the discussion veers away from your own stand points, you must smartly find a way to swerve it back to what you think are vital to accomplishing your goals and harp on it.
I want to reiterate and strongly advice that to take time out to prepare yourself for the negotiation especially on articulated questions that can be asked by the other parties, this gives you the much needed confidence and an opportunity to have a well thought out plans and approach in handling the negotiation.
The element of surprise is that it often time helps prevent impulsive decisions and reactions during negotiation and of course it is a great way to avoid passivity because you already have enough activities going up on your mind, brain and on your head directed toward achieving you goals, which you have a burning desire to divulge with the parties.
To this end enhancing your communication and networking skills with other real estate investors, professionals, home owners contractors, suppliers by establishing, building, maintaining and sustaining a very good business relationship with them is key and will greatly help increase and improve your negotiation skills because the bitter truth is, in negotiation process it is not what you say that matters but how you say it.
Real estate investors, professionals, home owners, sellers, buyers and occupiers who have great personal and business relationship always have access to information and are kept updated on happenings and trending events in the market and the industry in general which make real estate transaction negotiation easier because they have access to market analysis and readily answers to most questions at their finger tips especially as it affects prices in the real estate market.
Learning how to survive tasking questions is one of the jealously guarded secrets of experienced negotiators, they exude great confidence in their presentation, answer questions intelligently by paying attention during negotiation and they always look forward to facing a rapt audience of bank representatives, business people, investors especially when negotiating for funding of a development project.
I urge you to learn how to overcome rejection and never ever exhibit any sign of being befuddle or any bemused expression, be free to ask question, understand their objections, respect their views but try as much as possible not to compromise or let go of the essentials, that is what you desperately desire or need in the real estate transactions, mortgage, lease, dispute or contract negotiation.
If you let go of what you desperately want it may leave you unfulfilled, dissatisfied, unhappy and you may live the rest of your life regretting and fretting about what you could have possibly done right. Be smart enough to to compromise on what you truly want.
I understand making investment decisions can be tough but when well thought out and it is time to take decisions avoid shilly-shallying, quickly evaluate the situation to help you make informed decisions.
It is also important for me to let you know that negotiation is not a sport, where participants are only out to compete in order to prove their superiority over the other party, it must not be a win or lose situation but rather it is about all the parties being happy and being satisfied with the agreement and make plans to accomplish it.
Hence if you approach negotiation with a clear set of goals, objectives and a workable plan in mind, it will give you the opportunity to pick solutions that best satisfies all parties involved in the negotiation and you will be amazed at how successful negotiation process will always turn out for you.
Always ensure you switch on your brightest mood, put up a happy face and be ecstatic about the negotiation process, to be honest with you as you are trying to understand who you are dealing with, the other parties are doing the same on you, it is important not to underestimate and overestimate the other parties. in the discussion.
If everything is not really working in your favour and the negotiation is heading toward a disappointing snafu or all your plans and presentation had gone awry do yourself the favour of being calm to avoid unnecessary display of vehemence. At this point in the process I would suggest you find a way to reposition yourself and ensconce yourself in a decent and still favourable position by reconsidering your options and what losses you can take that would be best for you and acceptable to the other parties but as I have mentioned earlier never compromise what you desperately want or need in a contract.
Finally before I round off this topic, I want to firmly state that if you can adopt and apply some of this instructions and advice; learn and conceptualize all these great negotiation skills as well as these smart ways to improve and enhance your negotiation skills and of course with a great deal of originality, verisimilitude in your approach to customize and owning your approach to position you as a expert negotiator particularly in real estate sales and purchase transactions.
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