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Real estate negotiation is a process that has less to do with what you say on the phone or in a conference room and more with keeping quiet and paying attention.
This was the advice of Robert Nahigian, CRE, SIOR, principal with Auburndale Realty in Newton, Mass. And Nahigian is in a position to know. Throughout his 41-year career in commercial real estate, he has negotiated a combined $5.1 billion in real estate deals for a total of 40 million square feet.
Nahigian, who is also an SIOR award-winning instructor specializing in negotiation skills, spoke Saturday at the 2021 REALTORS® Conference & Expo in San Diego at the session “The Art of Negotiating; Hold ’Em or Fold ’Em.” He offered his top three tips for negotiating:
Listen. When you’re at the negotiating table, it’s important to ask a lot of questions and listen carefully to the responses. You want to learn as much as you can about the other side, and research, while necessary and important, can’t replace what you learn about the wants, needs, and personality of the person you’re negotiating with. “Listen, take notes, repeat back what the other person said,” said Nahigian. “Listening is the number one key trait to becoming a successful negotiator. You want to gather information so you can learn and leverage,” he added.
Be specific. You also need to establish for yourself what you want out of the transaction, which may require some reflection on your part before the negotiation begins. This doesn’t mean that you will get everything you ask for, but it will help you to have a clear objective going in. “It’s important to have a goal and a plan prior to negotiations,” said Nahigian.
“No” is only the beginning. When the other side says no, it doesn’t mean that negotiations are ending. The experienced negotiator knows that a negative response can lead to genuinely substantive negotiations. It’s important to probe into the reasons for the no response; you may be able to offer something that can turn that “no” into “yes.”
“Sometimes people have reasons you don’t know about,” said Nahigian. “A person who says he won’t pay $30 a square foot may not be able to afford it. But if you offer him $28 per square foot that gradually moves up to $30 over five years, he may be able to do that. If you jump to a conclusion, you can’t get creative and come up with a proposal.”
And sometimes, no matter how good a negotiator you are, the deal just doesn’t work out. Nahigian advised that when that happens, it’s important to remain respectful. He recounted the story of a deal that fell through for him early in his career when he needed the money. The prospective tenant—a tech startup company—couldn’t afford a 5-year lease, and Nahigian was bitterly disappointed. But he kept his composure and asked the company representative to let him know if their situation changed.
A month later, the rep reached out to Nahigian to ask if the deal was still on offer; because Nahigian had been respectful to them when their finances were low, they were still interested in working with him now that they were flush with cash. “It’s easy to get heated when you’re trying to make a deal,” said Nahigian. “But you should always leave gracefully. Remember that negotiation is a long game, and you never know what can happen.”