If you've got the time to go down a very deep rabbit hole, then the topic of how to communicate more effectively to get what you want is a very deep one indeed. It can cover everything from the words you use to your body language.
And if that's something you're passionate about, go for it! I'd rather put my time into being a successful property developer.
Having said that, though, good negotiating skills are an important part of the property development process, so it's worth at least making sure you've acquired some of the basic skills and tactics needed for more productive negotiations.
Now, I want to be really clear about one thing here. The line between having a productive negotiation with a view to both people getting what they need and using the "black arts" to manipulate someone into giving you everything you want is extremely thin. So be very aware of how you put the concepts below into practice. I've also done a couple of other Property Pulse articles about negotiation, and I'd recommend reading those as well - Negotiating: How to Be Happily Unhappy and Negotiating Styles - The Good, The Bad and The Ugly
Preparation
This is potentially one of the most overlooked tactics you can use in a negotiation. As the scouts always say - be prepared! This needs to happen on two fronts.
Firstly, thoroughly research the other party's position, interests, and potential alternatives. Are they operating within any constraints? At the most basic level, what are their objectives - what do you want to achieve from the negotiation. The more you know, the easier it is to reach agreement.
Secondly, be clear about your own priorities and objectives. Focus on what you need, rather than what you want (although if you can get what you want, that's a bonus!). Also be very clear about your other alternatives. This is sometimes referred to as your BATNA - Best Alternative to a Negotiated Agreement. This can really help you be realistic about what can be achieved from the current negotiation.
Building Rapport
Right from the beginning, aim to set a positive and collaborative atmosphere around the negotiation. There's an old saying that you catch more flies with honey than vinegar, and it's true. If you can, open the negotiation with some small talk to find common ground. That might not work in some situations, but is particularly valuable if you're negotiating directly with a vendor.
For example, if you're sitting in someone's living room and see a photo of them with a boat, then talk to them about sailing. Obviously it helps if you have the same interest, but even if you don't, ask questions about sailing. You might even be able to gain some background information that helps you, such as their desire to move closer to a dock so they can go sailing more often.
Finding common ground and establishing empathy helps to create the feeling that you're both on the same team, working together to find a solution that works for both of you. Maybe it's not always the right way to handle a negotiation, but is almost always more effective than negotiating from opposite sides of the fence.
Anchoring and Framing
Anchoring involves setting an initial offer as a reference point for further negotiations. Aim to set an anchor that is favourable to your position but still within the realm of reason. This initial anchor can influence the direction of the negotiation.
Once underway, frame the negotiation in a way that highlights the strengths of your proposal and downplays any weaknesses. This has a strong influence on how your offer is perceived by the other party. You can also try presenting limited options to help guide the other party toward choices that align with your objectives.
It's also important to focus on the benefits and value that your proposal offers to the other party. Highlighting unique selling points and demonstrating how your proposal meets their needs can strengthen your position. Going back to the sailing example, make it clear how your offer will make it easier for them to go sailing more often.
Active Listening
The skill of active listening involves paying close attention to what the other party is saying and trying to understand their perspective. This can help you identify areas of common ground and potential areas for compromise.
Active listening can help you find the basis for exploring different options and creative solutions that meet both parties' interests. Flexibility in finding alternatives can lead to innovative agreements that satisfy everyone involved.
If you need to make concessions during negotiations, you want to try to get something in return from the other party. This can help ensure that you are not giving away too much without getting anything in return. Listening carefully can help you prioritize concessions with a high perceived value to the other party but with relatively low cost to you.
Building Credibility
Highlighting examples of successful agreements with similar parties or references from satisfied customers can provide social proof of your credibility and increase the other party's confidence in your proposals.
All of the tactics listed above are quite straightforward. However there are other ways you can influence the direction of the negotiations. Some of these can potentially cross the line into manipulating people, which I'm not a fan of, but used in a positive way they can help move the negotiations along to a positive conclusion.
Closing the deal
Once an agreement has been reached, clearly summarize the key points and confirm mutual understanding. Be prepared to document the agreement in writing if necessary. A written agreement can help formalize commitments and ensures accountability. When dealing with a vendor, for example, you might write out a Heads of Agreement that both parties sign. It may not be legally binding, but it makes it clear what the intentions of both parties are.
Always keep in mind that negotiation tactics should be used ethically and with the goal of reaching a mutually beneficial agreement. Manipulative or overly aggressive tactics can damage relationships and hinder long-term success. It's essential to approach negotiations with integrity, transparency, and a focus on achieving mutually beneficial outcomes.
If you don't, you might find your career as a property developer a lot harder than it needs to be.
And if that's something you're passionate about, go for it! I'd rather put my time into being a successful property developer.
Having said that, though, good negotiating skills are an important part of the property development process, so it's worth at least making sure you've acquired some of the basic skills and tactics needed for more productive negotiations.
Now, I want to be really clear about one thing here. The line between having a productive negotiation with a view to both people getting what they need and using the "black arts" to manipulate someone into giving you everything you want is extremely thin. So be very aware of how you put the concepts below into practice. I've also done a couple of other Property Pulse articles about negotiation, and I'd recommend reading those as well - Negotiating: How to Be Happily Unhappy and Negotiating Styles - The Good, The Bad and The Ugly
Preparation
This is potentially one of the most overlooked tactics you can use in a negotiation. As the scouts always say - be prepared! This needs to happen on two fronts.
Firstly, thoroughly research the other party's position, interests, and potential alternatives. Are they operating within any constraints? At the most basic level, what are their objectives - what do you want to achieve from the negotiation. The more you know, the easier it is to reach agreement.
Secondly, be clear about your own priorities and objectives. Focus on what you need, rather than what you want (although if you can get what you want, that's a bonus!). Also be very clear about your other alternatives. This is sometimes referred to as your BATNA - Best Alternative to a Negotiated Agreement. This can really help you be realistic about what can be achieved from the current negotiation.
Building Rapport
Right from the beginning, aim to set a positive and collaborative atmosphere around the negotiation. There's an old saying that you catch more flies with honey than vinegar, and it's true. If you can, open the negotiation with some small talk to find common ground. That might not work in some situations, but is particularly valuable if you're negotiating directly with a vendor.
For example, if you're sitting in someone's living room and see a photo of them with a boat, then talk to them about sailing. Obviously it helps if you have the same interest, but even if you don't, ask questions about sailing. You might even be able to gain some background information that helps you, such as their desire to move closer to a dock so they can go sailing more often.
Finding common ground and establishing empathy helps to create the feeling that you're both on the same team, working together to find a solution that works for both of you. Maybe it's not always the right way to handle a negotiation, but is almost always more effective than negotiating from opposite sides of the fence.
Anchoring and Framing
Anchoring involves setting an initial offer as a reference point for further negotiations. Aim to set an anchor that is favourable to your position but still within the realm of reason. This initial anchor can influence the direction of the negotiation.
Once underway, frame the negotiation in a way that highlights the strengths of your proposal and downplays any weaknesses. This has a strong influence on how your offer is perceived by the other party. You can also try presenting limited options to help guide the other party toward choices that align with your objectives.
It's also important to focus on the benefits and value that your proposal offers to the other party. Highlighting unique selling points and demonstrating how your proposal meets their needs can strengthen your position. Going back to the sailing example, make it clear how your offer will make it easier for them to go sailing more often.
Active Listening
The skill of active listening involves paying close attention to what the other party is saying and trying to understand their perspective. This can help you identify areas of common ground and potential areas for compromise.
Active listening can help you find the basis for exploring different options and creative solutions that meet both parties' interests. Flexibility in finding alternatives can lead to innovative agreements that satisfy everyone involved.
If you need to make concessions during negotiations, you want to try to get something in return from the other party. This can help ensure that you are not giving away too much without getting anything in return. Listening carefully can help you prioritize concessions with a high perceived value to the other party but with relatively low cost to you.
Building Credibility
Highlighting examples of successful agreements with similar parties or references from satisfied customers can provide social proof of your credibility and increase the other party's confidence in your proposals.
All of the tactics listed above are quite straightforward. However there are other ways you can influence the direction of the negotiations. Some of these can potentially cross the line into manipulating people, which I'm not a fan of, but used in a positive way they can help move the negotiations along to a positive conclusion.
- Silence: Strategic use of silence can encourage the other party to reveal more information or make concessions. Pausing after making an offer or asking a question can create a sense of discomfort that prompts the other party to speak. Avoid rushing to fill gaps in conversation and be patient.
- Emotional Manipulation: This strategy involves using emotional appeals, guilt, or other psychological tactics to influence the other party's decisions. It can be effective in some situations but should be used ethically.
- Deadlines: Introducing artificial deadlines or time pressure can create a sense of urgency that motivates the other party to make decisions more quickly or agree to your terms to avoid missing out on an opportunity.
- Mirroring: Subtle mirroring of the other party's behaviour or language can establish rapport and create a sense of alignment. Additionally, incorporating subtle behavioural nudges, such as nodding or maintaining eye contact, can subtly influence their perceptions.
- Managing Information Flow: Control the flow of information during negotiations to maintain an advantageous position. Disclosing information strategically while withholding nonessential details can shape the other party's perceptions and decision-making process.
Closing the deal
Once an agreement has been reached, clearly summarize the key points and confirm mutual understanding. Be prepared to document the agreement in writing if necessary. A written agreement can help formalize commitments and ensures accountability. When dealing with a vendor, for example, you might write out a Heads of Agreement that both parties sign. It may not be legally binding, but it makes it clear what the intentions of both parties are.
Always keep in mind that negotiation tactics should be used ethically and with the goal of reaching a mutually beneficial agreement. Manipulative or overly aggressive tactics can damage relationships and hinder long-term success. It's essential to approach negotiations with integrity, transparency, and a focus on achieving mutually beneficial outcomes.
If you don't, you might find your career as a property developer a lot harder than it needs to be.
