The Art of the Negotiation

Randal:
How important is winning? Stay tuned. Let's talk a little bit about negotiation.

Erik:
Real estate transactions are one of the biggest transactions most people will make in their lifetime.

Randal:
Yep. It's a big financial decision and there's a lot of baggage attached to making those kinds of commitments, decisions and financial obligations for the future.

Erik:
Exactly.

Randal:
And one of the things that we really try to counsel our buyers on is, I have to say, to create a little bit of a win-win for both the parties, because one of the things that we know for sure is we are not done. We are not done with that initial negotiation. There are many more negotiations that are yet to come. And some of them that you don't even have a clue are coming down the road, but-

Erik:
You might put it under agreement for a certain price, but there is a lot more to a transaction besides the initial price.

Randal:
What happens when we go to home inspection, right?

Erik:
So additional negotiating.

Randal:
Right? What happens when... Now this doesn't happen very often and not in every transaction, but what happens if there's difficulty with an appraisal? What happens if the bank makes a mistake and we have to renegotiate a closing date? Again, these things don't happen in every transaction. In fact, they almost rarely ever happen, but when they do, it's really nice to have something in your back pocket to be able to say, "Well, I gave here, I gave already."

Erik:
I showed some understanding, I showed-

Randal:
And there's goodwill in a transaction.

Erik:
There were some compromise. I now need something. Let's compromise that. And it's true with the seller too. Sellers may want a little higher price. Maybe they get a little less, but they're going to get a little bit more, the buyer will go easier on the home inspection, give them a date or be flexible on a date that they need for something else, closing or something. That could mean also thousands of dollars to the party who's asking for it in the end.

Randal:
So really when it comes down to it, it is having goodwill through a transaction really helps lubricate the process for everybody all the way to closing. When we start out a transaction and there is no goodwill, it creates-

Erik:
Or you lose it.

Randal:
Or you lose it-

Erik:
During negotiation or at some point.

Randal:
During negotiation. It really can make for a difficult transaction. We've seen it before. We've certainly represented both parties, buyers and sellers, where we lost that goodwill based on winning a battle and not having our sights on the war. Maybe this is giving a little too much away, but really this is the kind of business that we work. We work a business where we have goodwill in transactions. We will go to bat for our clients every single time. But we also realize that sometimes you have to be cognizant of the entire forest or the trees.

Erik:
So real estate transactions, they are a business transaction, a business negotiation, but they're also personal.

Randal:
Yeah. Yeah. And we don't take that lightly. And we want to make sure that we keep people focused on those elements of a transaction. Well, thanks for letting us rant again on your computer again today. If you have any questions about this or anything else that we can help you with, feel free to comment below or private message us. And until next time, stay tuned and stay focused.

Erik:
Stay tuned and stay focused. Enjoy the journey of the transaction, it's not just the destination.