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Real estate law made simple: The art of negotiation
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Negotiating in the real estate market of 2007 and earlier was fairly easy. There really wasn’t any. Sellers named a price, buyers placed multiple bids, the highest offer won. I remember getting a new construction contract from a seller’s counsel where the cover letter said “no negotiations will be considered on this contract, either sign it as is or return it unsigned and we will move on to the next deal.”
While that made my life easier, it was a bit frustrating. “Can we ask for the sponsor to pay their own transfer taxes?” “Sure,” I would reply to my buyer, “we can ask for anything. But there are three other full price offers on the table, why would they give us that?”
Today, however, all that has changed. And success in this market requires us to dust off our negotiating techniques manuals and return to basics Everything, these days, is negotiable, and careful thinking about the transaction before signing avoids problems down the road.
But negotiating is not about winning, and forgetting that fundamental can derail an otherwise successful transaction. Take an example from a recent deal. I represented the seller in a difficult sale where the apartment had been on the market for many months without any real offers. The seller was unhappy, financially strapped, and accepting a price that was well below what they hoped for. That set the mood. The seller started off resenting the buyer for the offer. Instead of respecting the offer, albeit low, and appreciating that they finally had a real buyer, the seller viewed the buyer as the enemy, and a bottom feeder who was taking advantage of their misfortune. The contract negotiations were difficult, but we finally reached an agreement, except on one item. The seller wanted to remove 4 wall-mounted speakers that he had installed in the living room. The buyer wanted them to remain, and signed the contract with those items written in to remain and delivered the contract with a down payment check to my office.
Today, however, all that has changed. And success in this market requires us to dust off our negotiating techniques manuals and return to basics Everything, these days, is negotiable, and careful thinking about the transaction before signing avoids problems down the road.
But negotiating is not about winning, and forgetting that fundamental can derail an otherwise successful transaction. Take an example from a recent deal. I represented the seller in a difficult sale where the apartment had been on the market for many months without any real offers. The seller was unhappy, financially strapped, and accepting a price that was well below what they hoped for. That set the mood. The seller started off resenting the buyer for the offer. Instead of respecting the offer, albeit low, and appreciating that they finally had a real buyer, the seller viewed the buyer as the enemy, and a bottom feeder who was taking advantage of their misfortune. The contract negotiations were difficult, but we finally reached an agreement, except on one item. The seller wanted to remove 4 wall-mounted speakers that he had installed in the living room. The buyer wanted them to remain, and signed the contract with those items written in to remain and delivered the contract with a down payment check to my office.
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