Jasmine Parker states in this article that “a successful negotiation takes place when both the buyer and seller believe they have received a good price.” This is so true! Negotiations are a process, a conversation, by which all parties walk away feeling they are satisfied with the outcome, not estatic, but satisfied. This article provides some guidance on negotiating your FIRST land deal or RENEWING a land deal that you have already entered into but seek better terms. Afterwards, I give general negotiating tips that can be used for any and all negotiations.
Parker’s steps to a successful negotiation include:
1. Review the property. Simply looking at pictures of real property or taking an agent’s word about a particular property will not suffice. View the actual property and then review it’s history. The history of land sales can be researched at the county clerk’s office, usually the real estate division. It can provide owners, restrictions, emcumbrances, etc. that you need to make an informed decision about land.
2. Obtain a copy of covenants and restrictions. The last thing you need is to purchase property only to find out that pursuant to property restrictions, you cannot improve your property or do other things that are needed for your business.
3. Do a cost analysis. Will you have to improve the building? If so, by how much? Is this price reasonable? Is this price likely to increase over time? The price that you are paying for the property may not be the end story if you consider upgrades, improvements and other fees (like business association fees) attached to the property.
4. Don’t create problems. The whole point of negotiations is that not everyone gets everything they want; there is giving and taking. So don’t feel discouraged or try to unnecessarily take advantage of the other parties. Doing this will lead to longer, more expensive negotiations and make the negotiations more tense.
5. Make a fair offer. While there is an art to negotiating back and forth, try to make an offer that is fair to the otherside. Otherwise, you may find yourself without property.
My Perspective: Negotiating Tips in General
Kendrick Law Practice (www.kendricklaw.net) not only offers document drafting and document reviewing services but negotiating services. Below you will find five (5) general negotiating tips for any negotiation.
1. Know the other parties. That means knowing what they ideally want out of the deal versus what you reasonably believe they are willing to tolerate. Doing this accurately and early will put you in a position of power and leverage when the negotiations start.
2. Be ready with a counter. Just because the other side says “no” or names an alternative you disagree with doesn’t mean negotiations have to stop. Take into account the demands that are being made on the other side, take some time to think and offer a counteroffer if you feel it is satisfactory for your needs.
3. Don’t be upset if the other sides counters. Remember, the other side is trying to obtain the best deal possible for their side, just like you! When you give an offer that you think is reasonable and the other side offers a counter offer, you can either reject it or try to move your offer towards the middle. Either way, it’s a process and emotions should stay their distance during this process.
4. Be patient. Depending on the deal that you are participating in negotiations, this process could take a while depending on the stakes. It’s ok to check for updates on the other side but the lengthy wait for an answer could mean that the other side is seriously considering your offer.
5. Put your offer in writing. This includes counteroffers as well. Complicated negotiations that span over a length of time can cause memories to fail. Not to mention it’s a good idea to have written offers to reflect back upon and reference when needed. Legally speaking, putting offers and counteroffers in writing will help protect you should one party renign on an offer.