Let the Common Enemy Negotiate for You.
"Settle down or I'm going to bring Nancy Schulman in to talk to you". This
simple statement helped my daughter get through nursery school. Mrs.
Schulman was the Director of her school, an outside leverage point in
classroom negotiations. It was easier for her teacher to blame the rules on
someone from outside of the classroom than to rationalize with an unruly
group of pre-schoolers. Needless to say, it worked.
Negotiations are emotional, but in order to be effective negotiators, we
must quickly move out of the emotional realm by convincing ourselves
and our negotiating partner that a negotiation is an effort to obtain a fair trade for both
sides, not a competition.
At Signature Community we are buying property once again and
negotiating many deals across the country, but in an economy that bears
no resemblance to the heyday that helped us to grow to where we are
today. We are still dealing with a market in fluctuation and an economy
that is in a shaky recovery at best, so we cannot reenter our acquisitions
pursuits with the same speculative attitude that we did 3 years ago. For ten
years before the economic downturn, the properties we pursued traded in
a very efficient matter almost on a daily basis. Intellectually we all know
that we are in a different world today. Our challenge now is to overcome
the emotions that result from telling a seller that a property that was trading
at $40,000 a door three years ago is now only worth $12,000 per door. It's
reality vs. nostalgia. The NEW economy is the Common Enemy.
The properties we buy are typically distressed, vacant, and/or in
foreclosure. They have substantial deferred maintenance with lots of
hidden problems and unknowns. We deal with a resident base that is
still dealing with high unemployment and increasing expenses. These
variables make for uncertain profit margins and warrant caution in our
negotiations. We must beware of the Common Enemy ourselves.
The Common Enemy or "the Nancy Shulman story" (Forgive me Nancy.
She's actually a very nice person.) is one of the most efficient ways to start
any negotiation. It is easy for a seller to take a lower than expected offer
personally, but in reality it is external forces driving it. The efficient market
that allowed them to trade at high premiums is gone and the economy that
drove them (5% unemployment) is no longer there nor will it be anytime
soon.
We all negotiate everyday with residents, vendors, lenders, business
partners, kids, spouses, etc. The key point I make here is make sure
you move the focus from one on one competitive combat and into the
realm of objective rational negotiation on a common goal. If you need
a Nancy Schulman she is there for the taking such as the tax-man, bad
economy, cold weather, snow, rain, unemployment, etc.
The first point of
business is to let each party voice their hostility, which sometimes takes
weeks, and then move on and focus on the present and future - not the
past. Successful negotiators allow the emotions to flow in the beginning
of the talks, but make sure they are fully out on the table before moving
to the productive work of peace planning. You cannot negotiate from an
emotional state.
Please share your stories of win-win negotiations.
-- Nickolas Jekogian
CEO
Signature Community
917-763-3500
www.ASignatureCommunity.com
Blog -http://www.nwjceommm.blogspot.com/
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