The Nature of Negotiation

Last Monday night I taught a negotiating class to a group of senior agents at The Real Estate Board of New York with a banker friend with decades of negotiating experience. What we have both learned over the years is that negotiating is a complicated and intricate dance best performed by cool heads who are able to remain non-adversarial. Emotion, unless judiciously and sparingly deployed, tends to be the enemy of successful outcomes over time. Keeping the conversation rational is one of the most significant reasons principals are drawn to agents. As I say to my agents at Warburg, the buyers and sellers are capable of being emotional all by themselves.  If that is how YOU are going to behave, what value are you adding? This is the purchase or sale of their home; they’re ALREADY emotional.

And here are a few other ideas we discussed during the session:

– Most agents imagine that negotiating takes place between a buyer and a seller to arrive at a deal. While of course this is true, it is merely the LAST in a series of negotiations which have taken place to bring the parties to that place.  Every step of the way involves negotiations: they begin with the first meeting between agent and seller. What will the commission be? What will the price be?

– Frequently the most complicated negotiations are those between the members of a couple. Agents are always trying to figure out who the “decision maker “ is. In my experience it is usually more complicated than that. Both members of a couple are usually involved, although often one is the spokesperson. Complications arise when the members of the couple want different things. In those situations the agent requires a full complement of psychological as well as business skills to reconcile the factions.

– It is crucial to know when to speak and when to remain silent. It’s remarkable what you can learn if you do not talk too much. As a culture we tend to be uncomfortable with silence: we like to fill it. A skilled negotiator always uses this fact to leave silences hanging, waiting for the other side to fill them, sometimes with unexpectedly useful information. 

– Time management can determine the success or failure of any negotiation. Especially in the last stages, when the parties are close but unable to bridge a final gap, a breather can open the way to a solution. I urge my agents to walk away for a day when the need to win overcomes the desire to be reasonable. It is remarkable what a breather can do in restoring everyone’s focus on the actual goal – consummating the deal so the buyer gets the property and the seller gets paid.

Every skilled professional has his or her store of wisdom about what makes negotiations flow to a successful conclusion.  The process is endlessly fascinating to me; each deal is distinct and in negotiating each I learn so much about myself, my clients, the people on the other side, and the ever refracting  face of human nature.