Tips and Traps When Negotiating Real Estate: Remember That Some Deals Can’t Be Made – No Matter What

Walk Away a Winner – Remember That Some Deals Can’t Be Made – No Matter What

I’ve been asked why I included this in a list of rules for successful negotiations. The reason is that unless you recognize in the back of your mind that sometimes the deal can’t be made, you will miss out on some good deals.

Sometimes, but only after extensive, intensive, and forthright negotiation, it becomes clear that no matter what you do, you can’t make a deal with the other party. You’ve been careful and have not offended the other side; you’re dealing with a person who has the power to negotiate; you’ve made lists; you’ve disarmed psychological attacks. You’ve done it all. And after all of it, the deal just can’t seem to be made. You’re too far apart in price or in terms. You’ve tried to compromise. You realize the other side has tried to compromise.
The awful truth is that there just isn’t a deal to be made here.

Once you realize this, the mistake is to continue negotiating. If you continue, you may give up something you can’t afford to lose and may end up with a deal you’re better off without.

TRAP

What’s worse than not making a deal? It’s making a deal in which you lose.

What you do is announce that you’ve tried your best. You’ve given it every bit of creative effort you have and you just don’t see how any deal can be made between the two of you. So, you’re ending nego­tiations. If you’re a buyer, you’ll look for another house. If you’re a seller, you’ll look for another buyer.

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At this point, the other side has a decision to make. Either he or she can concur with you, shake hands, say there’s no hard feelings, and leave, each of you to go your separate ways.

Or, he or she can make concessions that will make the deal more appealing to you.

Why would a buyer or seller do this?

One reason may be that this person has been giving you only the posture, the negotiating “position,” and that he or she really does want to make this work very badly. By walking away from the table, you’ve forced it out into the open.

Another reason may be that this person has never read this book and simply doesn’t know that sometimes it’s better not to make the deal. He or she is determined to make the deal no matter what, even if it’s at a disadvantage.

TRAP

Sometimes people will walk away from negotiations as a ploy. It’s not that they believe no deal can be made. They think they can pressure the other side into making concessions. However, if you walk away before concluding there is no deal possible—if you do it as a ploy—how do you come back if the other side recog­nizes what you’re doing and simply says, “Bye-bye”? If you still want the deal, now you have to come back, eat humble pie, and try again from an obviously weaker position.

The ultimate test of the other side is to conclude that there’s no deal to be made and walk away. If they let you go, then you know that your assessment was correct. If, however, they rush after you urging you to come back to the table, then you now know that they’ve only been posturing, not really being fully open.

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When you’re called back, it’s time to play hardball. You can say the obvious, “I walked away because I assumed there was nothing more to say or do. But your calling me back suggests that my understanding of what you have to offer was incorrect. What are you now bringing to this deal that is new and will cause me to continue with the negotiations?”

Often the other side will now present some new concession or creative plan. However, 1 have been in this position and had the opposite side simply reiterate their old position. As soon as it became apparent that nothing new was offered, I walked away again. When they came after me once more, I simply said, “Put it in writing and I’ll consider it,” and left.

TRAP

You can’t negotiate successfully with people whose main hope of “winning” is simply to wear you down by keeping you at the table.

TIP

If the other side is a “wear ’em out” negotiator, do it at a distance. Get them to write it down on paper and submit it to you at your home or work. You can then accept, reject, or modify. By maintaining distance you have avoided having the other side gain an advantage by wearing you out.