Negotiating during commercial real estate transactions can be tough, but when you’re negotiating with someone who has a huge ego on the other side of the transaction, things can get even tougher.
Sometimes when people negotiate, their goal can seem to be to extract a pound of flesh out of you, so when you’re dealing with someone like this, you need to stay focused on what’s really important to you. Because oftentimes it’s the ego of one or both of the principals who are involved in negotiating during a transaction, that keeps the transaction from being consummated, rather than the problem being about the total amount of money being paid. So whenever this happens, you may see the principals being just $10,000.00 apart on a $1,000,000.00 to $2,000,000.00 transaction, and neither side will then budge from their position. Then because of this, they’ll both walk away from making the deal, because neither one wants to give in to the other side, and this has now become their primary goal during the negotiations.
With this in mind, from your own perspective, you want to make the deal happen if it’s a good, fair transaction for you, and sometimes you may need to pay just a little bit more than you had intended to if the deal will make good sense for you in the long run. For example, if you’ve been looking for a building to run your business out of, and what you’re looking for is very difficult to find, when you finally do locate the ideal building you definitely don’t want to let this opportunity get away from you.
There is tremendous value for you in finally having located the ideal building for you to run your business out of, you’ll be able to expand and have your ideal layout, and you’ll be making more money out of the new building because of all this, and this all needs to be factored into your final decision. In addition, when you finally decide to sell the building years down the road, it will be in high demand, because of how hard it will still be to locate something similar on the market once again at that time, and you’ll do very well for yourself financially when selling it.
So don’t let your ego get in the way of you seeing the big picture, and seeing just how much owning a specific property will mean to you because of spending just a few extra dollars on it. Think long term, and recognize that 10-20 years down the road, you’ll be thrilled that you bought the property at the exact same price that you paid for it, and you’ll laugh at the idea of being concerned that 10-20 years ago, you thought that maybe you might have paid just a few dollars extra for it!
