By the very nature of the job, property professionals need negotiation skills. A successful negotiation process happens when two or more people, or a group of people, come to an agreement through compromise and both parties are satisfied with the outcome.
Property professionals use negotiation skills in a variety of situations. For example, with prospective tenants looking to get the best rental terms, with vendors to get the best prices, with owners to get the best management fees and even sometimes with another property management firm looking to merge organizations. In your daily life, you may find yourself at work in salary negotiations. Make no mistake, negotiations skills even come into play in your personal life, as anyone who has ever had a teenager is all too aware.
Steps to Successful Negotiation
While there are many ways to approach a negotiation, there are five common steps that most effective property management negotiators follow to achieve a successful outcome.
1. Do Your Research
Doing your homework is a vital first step. Before you sit down to talk to a new owner, vendor, or commercial tenant, know as much about them and their situation as you can. If you are talking to an owner, bring to the table all data about your local market rents and know what other property management companies in your market charge. If you are trying to get a better deal with your landscape or maintenance vendors, take some time to research their competitors and get a sense of price and quality comparisons.
2. Be Prepared to Make Concessions
Good negotiators understand the need for both sides to be happy, rather than a “winner take all” approach. Know your goals ahead of time and identify any possible trade-offs. It’s easy to lose sight of the end game in the heat of the moment, so take the time to recognize your motivations, needs, priorities and goals, as well as those of the other party you are negotiating with. This will help you stay focused on your own objectives while maintaining a realistic outlook.
Walk into the negotiation discussion knowing exactly what concessions you’re willing to make, and where you draw the line. Have a Plan B. Roger Fisher and William Ury, the authors of Getting to Yes, call this your "BATNA,” your best alternative to a negotiated agreement.
3. Don’t Just Focus on Price
In any negotiation, it can be easy to zero in on price and overlook the other factors that influence a deal’s overall value. These can include things like payment terms, contract duration, the comprehensiveness of services, and possible incentives. While driving down the price of a vendor’s contract may seem like a win, maintenance still needs to be done in a timely and correct way. Too much cost cutting can produce undesirable outcomes. To negotiate with the best value in mind, assess price within the context of the offering (what you’re getting for the money) and the market (how much competitors charge.)
4. Stay Curious
Negotiations are not just about putting forth your best presentation (although this helps immensely!) or defending your position. You also need to actively listen to the other party and stay curious. Be aware of body language like gestures, facial expression, eye contact, tone of voice, and nods of the head to key points.
Ask questions. If you are negotiating with an owner, you will need to know about their goals, their budgets and how much input they want on day-to-day operations. The more you listen, the more you can pinpoint areas of common ground, see where they might be flexible and explore ways to bring the negotiation closer to resolution.
5. Be Persist
Often times, it can take asking for what you want several times in different ways before reaching an agreement. Rookie negotiators walk away or concede to a deal after the first “no.” If you do this, you miss important opportunities for your company. Complex negotiations require a high level of concentration over an extended period. During the preparing stage of negotiation, no doubt you’ve identified what you want and the various forms of what that looks like.
Whether it’s for negotiating for a raise or bargaining with an owner of multiple buildings, these tactics work for every kind of negotiation.