This past Friday, I was negotiating the terms of a 50-page lease– which isn’t unusual, except that the landlord rejected EVERY single one of our edits and refused to budge on even its most ridiculous demands. My stomach began to knot.
My stress was further compounded by the fact that I was up against a sharp lawyer who’d been in the industry longer than I’d been born. Not to mention the fact that the landlord was in a better position due to financial, location and market reasons. As these realities sunk in, the knot grew tighter. How was I going to get any leverage over this lawyer and the landlord?
This is a common question we all ask whenever we have to negotiate with someone who may have more grey hairs, more authority (i.e. a boss, Rogers cable), a fancier education or someone with a disturbingly aggressive ego. And this question is easily answered by patience. As in, your leverage is patience.
How Patience Works
The landlord didn’t have time to “deal” with the negotiation, as he wanted to get through the negotiation before his vacation. It was also revealed – after a lot of digging and listening – that the landlord needed the lease to be signed due to a refinancing requirement. Both the lawyer and landlord weren’t much interested in patience and I had plenty of it. And using it worked. I took my time during the negotiation. I allowed for many awkward pauses. I hummed and hawed, dragged out the conversation, asked lots of questions and made them sweat under the time pressure until they simply conceded to one request after the other, for reasons described below.
I wish I could claim that my patience solution came from a moment of clarity – the sea parting and a voice booming down. But, it didn’t. It was something less dramatic, but nonetheless useful: Dawson’s book, Secrets of Power Negotiating. For anyone buying, selling or negotiating anything, I urge you to read on and discover how to use the simple trick of patience and why patience works so well.
Time pressure plays a part in every negotiation […]. If you want to see how time can be used as a negotiating tool, just watch some children getting concessions from their parents. Children know all about time pressure. If they want something, they ask for it just at the last moment. They wait until you’re rushing out the door for an important meeting … that’s when they know they have the best chance of getting what they want. Why? Because they subconsciously know that under time pressure people become flexible.
Unless sellers are under time pressure, it’s hard to get good buys. However, when they are under a lot of time pressure, you can get terrific buys. And what time pressures might sellers be under? Of course, you won’t know until you have done some work gathering information and asking questions. But there are a lot of possibilities:
- Maybe they’re behind on their mortgage payments and don’t see how they can catch up.
- Perhaps they are actually in foreclosure and in danger of losing the property unless they can find a buyer.
- They might need money to pay off mounting debts.
- They might have contracted to buy another home and can’t close on it until they sell this one.
- Possibly they’re retiring soon and want to move as soon as possible.
- That’s just a partial list of the many things that put sellers under time pressure. Make your own checklist and expand it with each new situation you encounter. Keep your list in mind when you first meet with potential sellers and see if you can spot symptoms of the time pressure they may be under.
To extort time-pressure information from the seller you might ask, “Would you consider a lower offer for a fast sale?” Sellers don’t always respond truthfully, but you may get a feel from the eagerness of their response. If you are dealing with a real estate broker, have your agent call the listing agent and ask, “How long has it been listed? Have they turned down any offers? Why are they selling?” The listing agent will be more likely to share this information with another agent than with you directly.
Another aspect of time pressure that is especially germane to buying real estate is Acceptance Time. It often takes sellers time to understand that they are not going to get as much for their property as they hoped. A low offer that might horrify a seller just after they’ve put their property up for sale may look a whole lot better after the property has been on the market for three months without an offer. Never write off sellers as being hopelessly inflexible on their price. Some of the best buys are from sellers who call back weeks after they turned down the original “unacceptable” offer. They needed time to see that they weren’t going to get a better offer. Always leave the door open for sellers to reopen negotiations. Instead of pressuring them by saying, “This is my final offer,” leave the door open with a statement like, “I hope you get what you’re asking, but if you don’t, call me. I’m not saying I’ll be in a position to buy later, but we can always talk some more.”
Patience is a real virtue when negotiating. The longer you can keep sellers involved in negotiations, the better chance you have of getting what you want. Take your time inspecting the property. Ask as many questions as you can think of. Discuss things you may have in common with sellers. If you see golf clubs or a fishing rod and you golf or fish, have a conversation about it. Take a tape measure with you, measure some of the rooms, and note down the measurements. Pace off the back yard and write it down. Why do these things? For two reasons: The longer you spend with sellers, the more trust they will develop in you. And the more time they spend with you, the more flexible they will become when the negotiations start. Time spent with you will increase their flexibility on price, terms, and other considerations. Why? Because mentally, they want to recoup the time spent with you. Their mind starts to tell them, “I can’t walk away from this empty handed after all the time I have invested.”
There is a caveat here. If you aren’t careful, time can work against you in the negotiations as well. You may find yourself becoming more flexible for the same reasons sellers do. Your subconscious mind will be saying, “I don’t want to walk away from this with nothing after all the time I’ve spent on it.”