By Haley M. Hwang, REALTOR® Magazine
Done Deal: Insights from Interviews with the World’s Best Negotiators By Michael Benoliel (Platinum Press, 2005)
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You need to master the art of negotiation in order to truly succeed in real estate. From submitting an offer and coming to terms on the purchase price to working out the contingencies of a contract and home inspection findings, negotiation is a crucial part of any successful real estate transaction. And your ability to do it well ensures that your clients get the best deal and transactions move along smoothly. The author of this intriguing book contends that the basic strategies for negotiating successfully are the same—regardless of what you’re negotiating for. Each chapter highlights an essential negotiation strategy and provides valuable insights from the world’s top negotiators, such as James A. Baker III, former secretary of state; Hassan Basajja, a leading East African businessman and entrepreneur; Kenneth Feinberg, a Washington attorney and an expert on mediation and dispute resolution; Christie Hefner, chairwoman and CEO of Playboy Enterprises; and Robert L. Johnson, founder and CEO of Black Entertainment Television, among others. Learn these strategies and you’ll get everything you and your clients want in your dealings.
Tips From the Book:
- Negotiate from both sides of the table. To be a master negotiator, you need to come to the table with a clear understanding of not only what your objectives are, but also the other side’s interests and goals. Have the attitude that you are going to work with, not against, the other side, and your objectives will be easier to accomplish. Try to find similarities in your end goals.
- Map out your strategy. Before entering any negotiation, be aware of all the possibilities that exist. Examine all the options and determine which ones are most likely to help you reach your overall goal. When Robert L. Johnson wanted to buy an NBA franchise, he analyzed who can influence the true decision-maker within the NBA, allied with that person, and took his cues from that person. Another proven strategy: Come up with a great idea and let the other side “steal it,” or think that the idea was theirs. Former U.S. Sen. Bill Bradley, a Democrat from New Jersey, said that’s how he got a lot of things done in a Republican-controlled Congress during his 18 years in the U.S. Senate.
- Increase your negotiating power. The outcome of any negotiation will not be determined by who has the most totalpower, but who has the most power that is specifically relevant to the negotiation at hand. Increase your negotiating power through three key elements: 1) Your resources, which can be tangible (financial, human, technological) or intangible (information, reputation, motivation); 2) Your capabilities, or skills, which is about how effectively you manage your resources; and 3) Distinctive competency, which comes from the combination of having both resources and capabilities. The more unique your resources, the more difficult it is for others to match them, and the better you manage them, the more distinctive your competency is. You can enhance your power by acquiring and controlling resources, developing access to resources that you don’t control directly, building a coalition of supporters, increasing the size of your coalition, or splitting the other side’s coalition to shift the power balance in your favor.
By Barbara Ballinger, REALTOR® Magazine
Real Estate Riches: How to Become Rich Using Your Banker’s Money by Dolf de Roos (John Wiley & Sons Inc., 2005)
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Dolf de Roos isn’t the type of real estate investor to keep all the riches to himself. Rather, de Roos, who owns hundreds of investment properties, shares his success tips and encourages others to invest. In his latest book, he offers the best tips from his 31 years of experience, walking both new and seasoned investors through the process—and encourages salespeople to invest, too. “You can still find good bargain properties, buy them using mostly other people’s money, and obtain returns of 30 percent to 100 percent,” de Roos says. But before diving in, you need to do your homework, he stresses. Know the best markets, be prepared to look at many properties before buying, and hang on to solid investments, especially if you’ve made smart improvements. But you also should be ready to unload poorly performing investments, he says. This is the first book in a series of products recommended by the NATIONAL ASSOCIATION OF REALTORS® that focus on real estate investment; the REALTOR® logo appears on the book’s cover.
Tips From the Book:
- Don’t overlook the classifieds. When searching for a great deal, don’t forget about classified ads in the local newspaper—often the advertising method of choice for owner-sellers who aren’t using a real estate salesperson. These properties are sometimes offered way below market value, and there is less competition because the property wasn’t marketed as widely as it would have been through a real estate practitioner.
- Make a seductive offer. To boost the chances that your offer will be accepted, staple a check for the deposit to the contract. It makes no difference to your cash flow; if the seller doesn’t countersign he can’t bank the check, and if he does countersign, you would have to write the check out anyway. The seller will know you’re serious, and psychological power is phenomenal.
- Use other people’s money. When you do, you are using other people’s money for your own profit. It sounds as though it should be forbidden, but it’s perfectly legal—and the people whose money you use even encourage you to do so. Because banks are so willing to lend money for real estate, you don’t need most of the money required for the purchase, and that gives you the opportunity to earn great returns on the capital you invested.