More than a game, less than a war.
One of the peculiarities of real estate and, I like to believe, one of its saving graces, is that the real estate transaction is a vigorous exercise in negotiation and client representation that always leaves both sides feeling, not necessarily refreshed, and not even necessarily feeling that they've won, but at least feeling that they haven't been blown into the next county.
This may sound naive. Worse, it may sound like dereliction of the real estate agent's fiduciary duty. The agent should be ready and willing to advance his client's interests, hammer and tongs, no quarter given, much quarter asked.
Well, as Dick Nixon used to say, let me say this about that. I strongly believe that the real estate agent should be a forceful advocate for his client. That's why I warn buyers against using the listing agent.
But the problem with the total-war approach to real estate negotiation is that it doesn't work. In fact, total war is counter-productive.
There are three reasons for this.
First, the total-war agent is like a pitcher with just one pitch, or a hitter who can't hit the breaking ball even when he knows it's coming. The total-war agent is going back to the bench just as soon as other agents learn the book on her, and after that her clients are rarely if ever going to get on base. Because when word gets out in the small, local and highly-verbal real estate community that her idea of negotiation is beating agents and their clients about the face and head with a heavy blunt instrument, and that her idea of transaction management is to roll on the ground kicking and screaming until she gets her way, you had better believe that that real estate community will go out of its collective way to avoid her.
And her clients. Because the real estate community knows that the only clients who gravitate to total-war agents are generally 1) low-ballers, or 2) people looking for what's called "the unfair advantage", or 3) school-yard bullies who don't know school is over.
Second, the real estate transaction is structured to minimize the chance of one side successfully bullying the other. There's no judge or jury to compel a seller to accept a one-sided offer even though it comes from a total-war agent or is otherwise booby-trapped. And at least so far, I've never come across a seller desperate enough to knowingly get into contract with an obvious bad actor—and the only good thing about real estate's bad actors is that they step forward and inadvertently identify themselves, right from the start.
It's the same with buyers. A seller or seller's agent who comes across as venal or controlling will turn off buyers, even buyers conditioned by a hot market to absorb abuse, faster than a county health inspector nailing a quarantine sign to the seller's front door.
The third reason is somewhat related to the second, yet different enough to stress: emotion.
Emotion. Emotion. Emotion.
Emotion is the difference. Emotion is what keeps—elevates, in my view—real estate negotiation above the level of gamesmanship.
To understand why, let's briefly look at the more common forms of negotiation.
I'm no expert in the game playing that goes on either in litigation (thankfully) or in the rarer atmosphere of high-level trade talks and diplomacy. But I've picked up enough, both from clients and from other sources, to suspect that I have at least a glimmer of what professional negotiation is about.
Years ago, when I was managing homeowners associations, I had the great good fortune to see real live attorneys in combat without either 1) paying for it, or 2) having a direct stake in the outcome.
Back then one of the associations I managed was suing their builder and subs for construction defects and, as is typical in these cases, a "special master" had been assigned by a Superior Court judge to supervise a negotiated settlement through regular conferences. These settlement conferences were held in a Rotary Club luncheon-sized room crowded with the special master, the association's sole and only attorney, a few worried-looking association board members, a bored-looking me (there for moral support and mostly ignored) and an entire clanking armored battalion of defense attorneys hired by Errors & Omissions insurers to defend the multitude of insureds.
It wasn't quite as extreme as a court scene out of Bleak House, but the unmistakable stench of cynicism did linger over these conferences like a Dickensian dirty brown fog over nineteenth-century London.
Even though he was greatly outnumbered, the association's scrappy attorney dominated the proceedings. Then, one day, apparently out of a clear blue sky, one of the long-suffering defense attorneys blurted, "Mark, I'm tired of you bullying us". Obviously this comeback, modest as it was, had been nursed during previous settlement conferences, and perhaps even lovingly rehearsed during off hours.
As a ringing declaration of independence, this went over like a lead balloon. Stunned looks all around. Even on the faces of the other defense attorneys.
Innocent that I was, I guessed even then that this attorney had just committed a major professional faux pas. Today I know he did: he allowed real, genuine, embarrassingly human, all-too-human emotion to leak into the room. In the heat of battle he had forgotten that this was only a game, played by elaborate rules that every professional there knew were intended to keep the proceedings from meaning anything personally to any of them and therefore kept what happened in the room from alienating any of them professionally.
At least no one was supposed to show that it meant absolutely anything.
Not done, old boy. Bad for the sport. Riles the natives.
Since then I've occasionally run across clients who're sure real estate negotiation is "all a game". Usually they are, yes, attorneys, instinctively applying the hardnosed rules of their profession, rules every attorney understands and no attorney takes personally, to, yes, perhaps the most personal and emotional of all human endeavors, the buying and selling of a home. I can't blame them, I guess. But the other side sure can.
Not done, old boy. Bad for the sport. Riles the natives.
Every professional negotiator has had instruction, of course, and seems to believe that this delicate art form can be condensed into easily memorized tidbits. So, just for them, I've distilled real estate negotiation into what I think are its essentials:
1. Know local real estate custom and law. Know the contractual rights you can waive, and the rights you can't waive. Don't "put some teeth" in the contract or fill in the blank spaces under Other Terms and Conditions unless you represent aggrieved home buyers or defend sellers and agents against them.
2. Know local real estate etiquette. Know the rituals, honed over time. Know what's said or done and how it's said or done, as well as what's never said or done. Don't ask for things no one asks for, and don't give up things no one gives up. Know what the other side will see as legitimate negotiation tactics, and what will be seen as penny-ante game playing. Know the monetary and emotional value of each contractual term and condition, to yourself and, to the best of your ability, to the other side.
3. Know how the other side feels. Yes, you'll have to respect, or at least understand, the other guy's feelings. The way to understand the other guy's feelings is to, as Nietzsche says, "reproduce his feelings in ourselves." Note that I've mentioned "feel" or "feelings" four times in the last three sentences. I've even brought in the heavy guns, a nineteenth-century German philosopher. To you pros negotiation may be just another blood sport, just another big-game safari, but the other side isn't blessed with your cynicism and detachment. The other side will take things personally. Hit the other side with a rolling barrage of the latest and greatest negotiation techniques and the other side may walk out and never come back.
The other side won't think it's a game. The other side won't stand for a war. Use—and then listen to—a specialist who knows the turf. A skilled, experienced real estate agent.
copyright © John Fyten 2007 Site Map Home