Negotiation Secrets of a Real Estate Pro

Here is a very profitable lesson in Negotiating I learned this week from my partner in Texas. It is so simple and so cool, I just have to pass it on.

Fasten your seat belt ... I call it

"Move the Middle"

There is a tendency hard-wired into humans to split-the-difference when negotiating.

When I say 10 and you say 20, our brains naturally want to meet at 15.

Some people actually use split-the-difference as a negotiating tool. They will name an outrageous number and hope that you will come half way.

There is another way...

With this Move the Middle technique you can hypnotize your negotiating partner to split the difference in your favor and move them relentlessly toward the number you need.

Here's how it works...

You just watch THEIR increments and make YOURS smaller.

This is a true example from this week...

We were Retrading a Commercial Property at the end of our Due Diligence period and absolutely needed to get a $100K credit for repairs from the seller to make the numbers work.

We made our case and asked up front for $200K.

The seller countered with $100K

- notice they came up from zero to $100K in one step - they split-the-difference ... nice start and we were only just beginning.

Our brain might have tempted us to split-the-difference again and say $150K. Instead we Moved the Middle by naming a smaller increment than this $50K drop.

We floated a request for $190K - we dropped by only $10K.

Let's see what happened...

The Seller countered with $130K

- Notice again, they moved toward us by countering our $10K increment with $30K of their own.We had successfully Moved the Middle.

We requested $180K and could feel the Middle moving our way again...

We and the Seller eventually settled on $145K and our project now works on paper ... we are proceeding to the close.

Not to shabby for a retrade and the deal is $145K sweeter in our favor.

That is how you Move the Middle

Look at the negotiation interval the other side is using and come back with a smaller one. The other side will come your direction as their natural tendency to split-the-difference takes hold.

POWER TIP:

Try this out in your next negotiation ... especially if it seems to simple to be real. You will like the results.