A person who sells a home for $100,000 more than they paid for it may obviously have improved their position. However that same person may also have improved their position if they sold it for $100,000 less than they purchased it for. There are a number of things that dictate the situation of the individual. Your ability to understand these factors will impact on your ability to gain value in the negotiation.

B.A.T.N.A Best Alternative To Negotiated Agreement. What would you do if this agreement did not come together? The stronger your BATNA the stronger your negotiation position. For example the star athlete who has multiple teams presenting offers to him has a strong BATNA because if he fails to reach an agreement with one he has others to turn to. A home owner trying to sell who is facing a mortgagee sale does not have such a strong BATNA.

In negotiation your understanding of not only your BATNA but also the other parties can influence your strategy

In property negotiation we want to secure value, get the ideal property for a great price and on the terms that suit us. By that standard the stronger our base position the stronger our negotiating position. When negotiating the purchase of a  property your first step should be to do all you can to improve your BATNA and your second should be to learn as much as you can about the sellers BATNA.

If you are renting property now one way to improve your BATNA could be to negotiate a better rental agreement with your landlord so that should you decide not to purchase there will be less stress in your current environment. Another way to improve your BATNA could be to find more than one property to negotiate to purchase. This way you are creating a BATNA while you work.

On the other side of the equation if you are able to learn that the seller of the property is wanting to sell in a particular time frame due to external circumstances, therefore the timing of the deal is critical you may be able to get the property for a good price by giving him the timing he needs. Also if you learn that the seller’s BATNA is to renovate the house and re-market the property again at a higher price you may save them to time and cost of renovation by purchasing now or you may decide to pay more and get them to renovate according to your taste.

Understanding as much as you can is key.

Communicate and prosper,

Tim Dow

Negotiation is the art of influence and the art of understanding. Great negotiators start with the understanding that everything is negotiable. They also start every negotiation by seeking to understand as much as possible about all sides of the negotiation. That means learning as much as possible about all the parties involved. What are the driving factors what has lead them to the position they are in today. What makes them happiest what would be a dream result for them. There is always more going on than the obvious heckling over price.

A workman wastes no time sharpening his tools. The more you are able to learn the more influence you will hold in the negotiation. Your goal is to gain value in the transaction. The purchase of property is generally seen as a battle between two parties on looking to get a higher price and one looking for a lower price. However often the terms are just as important if not more important than the price, when will the settlement and possession dates be? how much will the deposit be? will the owner finance some of the transaction costs?

Seek to understand before you seek to influence, that is our first key in property negotiation.

Until next time, communicate and prosper.

The property negotiator 2010