I respect athletes who compete in Ironman-type events that require running and biking distances I find uncomfortable to drive. And from what I gather, most of them compete for the sheer fun and the feeling of accomplishment of simply completing the race, not for a cash price.
If I was asked to bike to Palm Springs, the blank look on my face would tell you that even though I can ride a bike, I have neither the ability nor will power to accomplish such a feat. But I know that like eating an elephant, these athletes take small daily 'training' bites until the they can finish with a smile.
When it comes to negotiation, a real estate transaction is the equivalent of a bike ride to Palm Springs. It consists of a long series of negotiable events. You will debate value, selling price, closing date, commissions, contract time frames, repair items, financing terms and a multitude of other points along the road to closing.
And this takes place over an average of 105 days from listing (60 days) to closing (45 days). Becoming a better negotiator will help you feel great at the end of the long ride and may also pay you more than completing an Ironman race.
Basics of Negotiation
Your training should begin with understanding the basics of negotiation. The study of modern negotiation began in 1979 with the Harvard Negotiation Project. The project's goal was to improve conflict resolution by understanding and improving how people negotiate. The results of the findings are detailed in the highly acclaimed "Getting to Yes: Negotiating Agreement without Giving In," by Roger Fisher and William Ury.
The study found that most people take a position and negotiate in two ways: hard and soft.
The soft negotiator's primary purpose is to avoid conflict. Their goal is find a pleasant resolution between parties and make sure everyone feels like a hug afterward. The problem with a soft negotiator is that he or she often feels like they got the raw end of the deal and that their needs were not fully met.
The hard negotiator wants to 'win' the game, often taking the most extreme path possible to assure victory. And in their pursuits, hard negotiators often sacrifice their relationships with the other sides. The HNP found that all parties can improve their outcome by 'principled negotiation'. A methodology that is summarized into four steps:
• Separate the people from the problem.
• Focus on interests, not positions.
• Invent options together for mutual gain.
• Insist that the result be based on an objective standard.
People are emotional beings and can become angry, fearful, hostile and offended. They may wrongly interpret your intentions. A misunderstanding in the transaction can reinforce the idea of "it's me against you," and then the game becomes about scoring points at the expense of both parties.
Separating the people from the problem is the step that encourages you discover who is on the other side of the negotiating table to help you better understand their position. A principled negotiator will then focus on discovering all of the interest of the parties involved, not the position.
The position of a homebuyer may be, "I will not pay a dollar over $350,000 for that house." However, the interest of the buyer may be to find a home with a turnkey home with a large yard. The principled negotiator must concentrate on discovering and understanding what is important to the other party. By understanding the true motivation of other side, you can move to the next step of creating options for mutual gain.
Fisher and Ury found that in most negotiations, there were too few options for either party. More options allow either party to overcome the 'positional' bottom line. The final step is to agree that the results are based on an agreeable standard. In real estate it's most often the most recent comparable sales.
And in the spirit of learning, I will continue the discussion of negotiation at www.LundTeam.com, where these teachings will be applied and discussed over my next four transactions.
Questions & comments, email [email protected].
If I was asked to bike to Palm Springs, the blank look on my face would tell you that even though I can ride a bike, I have neither the ability nor will power to accomplish such a feat. But I know that like eating an elephant, these athletes take small daily 'training' bites until the they can finish with a smile.
When it comes to negotiation, a real estate transaction is the equivalent of a bike ride to Palm Springs. It consists of a long series of negotiable events. You will debate value, selling price, closing date, commissions, contract time frames, repair items, financing terms and a multitude of other points along the road to closing.
And this takes place over an average of 105 days from listing (60 days) to closing (45 days). Becoming a better negotiator will help you feel great at the end of the long ride and may also pay you more than completing an Ironman race.
Basics of Negotiation
Your training should begin with understanding the basics of negotiation. The study of modern negotiation began in 1979 with the Harvard Negotiation Project. The project's goal was to improve conflict resolution by understanding and improving how people negotiate. The results of the findings are detailed in the highly acclaimed "Getting to Yes: Negotiating Agreement without Giving In," by Roger Fisher and William Ury.
The study found that most people take a position and negotiate in two ways: hard and soft.
The soft negotiator's primary purpose is to avoid conflict. Their goal is find a pleasant resolution between parties and make sure everyone feels like a hug afterward. The problem with a soft negotiator is that he or she often feels like they got the raw end of the deal and that their needs were not fully met.
The hard negotiator wants to 'win' the game, often taking the most extreme path possible to assure victory. And in their pursuits, hard negotiators often sacrifice their relationships with the other sides. The HNP found that all parties can improve their outcome by 'principled negotiation'. A methodology that is summarized into four steps:
• Separate the people from the problem.
• Focus on interests, not positions.
• Invent options together for mutual gain.
• Insist that the result be based on an objective standard.
People are emotional beings and can become angry, fearful, hostile and offended. They may wrongly interpret your intentions. A misunderstanding in the transaction can reinforce the idea of "it's me against you," and then the game becomes about scoring points at the expense of both parties.
Separating the people from the problem is the step that encourages you discover who is on the other side of the negotiating table to help you better understand their position. A principled negotiator will then focus on discovering all of the interest of the parties involved, not the position.
The position of a homebuyer may be, "I will not pay a dollar over $350,000 for that house." However, the interest of the buyer may be to find a home with a turnkey home with a large yard. The principled negotiator must concentrate on discovering and understanding what is important to the other party. By understanding the true motivation of other side, you can move to the next step of creating options for mutual gain.
Fisher and Ury found that in most negotiations, there were too few options for either party. More options allow either party to overcome the 'positional' bottom line. The final step is to agree that the results are based on an agreeable standard. In real estate it's most often the most recent comparable sales.
And in the spirit of learning, I will continue the discussion of negotiation at www.LundTeam.com, where these teachings will be applied and discussed over my next four transactions.
Questions & comments, email [email protected].