How to Blow the Deal – Tips on How NOT to Negotiate

Over the years in the land industry, I’ve seen some very peculiar methods of negotiating the deal. I’ve even tried a few and succeeded, and tried a few and fell flat on my face. Anyone that has been around this business long will tell you the same thing, if they are honest with you. So I thought I would make a list of some of those things which you should not try when attempting to negotiate a deal.

1. Make a laundry list of everything that is wrong with a property you are trying to buy. You must like the property, or you would not have spent all that time figuring out everything this is wrong with it…duh! Plus when you impart your wealth of knowledge of all of the property’s shortcomings to the other party, you are not likely to make a friend of the Seller. Trust me, you want to become friends with anyone you are negotiating with. The adversarial plan is likely to get you the Obama-Boehner plan of negotiating…how’s that working? We can learn a great deal about how NOT to negotiate by looking at how politics plays out in our country today.

2. Create problems that are not there. I’ve seen both buyers and sellers do this to try and gain some type of advantage in negotiations. It rarely, if ever, works, and absolutely serves to drive the parties further apart.

3. Go back on something you previously committed to. Once you have committed yourself to an action, back it up. This one really gets me. This has no place in honest dealings. Your word should be your bond. Now I understand that there are time limits on things you commit to, but if you commit to a price, you should give the other party a reasonable length of time to respond to that prior to “taking it back.” If you want to drive a real estate agent nuts, this is the most effective manner of doing so. Some of us who are more seasoned will probably just kick you to the curb until you come back to your senses.

4. Play musical chairs with the terms of the deal in order to confuse. Good negotiations follow a logical path. Agree on small terms and move forward to larger aspects of the deal. Agree in principal to the big picture and then work out the details…either way works. Attaching many “if-then” conditions to negotiations does confuse the other party, but the default action of a confused party is either no action or out-right rejection. You will probably harden their position instead of softening it.

5. Fail to disclose something that should be. Oh my, this is wrong in so many ways. It’s illegal in some instances and immoral in all. There are laws that mandate disclosure of some aspects of a property and some aspects of the parties involved in the transaction. Knowing that you are an agent on the front end of the deal is not likely to torpedo the negotiations like finding that out when you are waist-deep. If you know that there is hazardous conditions on a property, tell the other party that up-front. I’ve had deals nearly fall apart AFTER closing because of issues like these. Those situations are messy ones that no one wants or makes enough to deal with. Disclose, disclose, disclose!

6. Allow the other party to believe something that is not true. I deal with this with sellers a good bit. Most of the time when I tell them that I will not represent them or participate in further negotiations this problem goes away. However I do know agents out there that just “go with the flow” on these types of issues. If you know that it will take $20,000 to put a septic system on a property, don’t let the other party think it’s a normal, garden-variety installation. They eventually find out and end up not trusting you afterwords. True, you might get to closing first…but you have to live with it.

7. Openly question the integrity of the other party. If you are done with negotiations and are ready to move on to a different deal…and possibly engage in a fist-fight, this is a sure bet. There is absolutely nothing to be gained by calling the other party a lying, no-good dog…no matter if it’s the truth. I’ve seen the time when I sure wanted to do this. If it’s really that bad, just move on to another deal. Tell them you are no longer interested in the deal at this time and leave it at that.

8. Attempt to completely box in the other party while leaving yourself free as a bird. I’m guessing I deal with this ineffective tactic as much as any. Many times buyers want to completely restrict a seller in negotiations without any type of firm commitment from them. What sense does this make? Why would a seller accept such a deal? Why would their agent let them? The old adage that you have to give up something in order to get something else certainly applies to land transactions.

I have presented some sure non-starters in negotiations. I know there are many, many more and I would like to encourage you to submit those in the comments section for this article. We will not be offended if you offer up some successful, honest negotiating procedures as well!