In Commercial Real Estate negotiations, a natural response is to try and “meet in the middle”, once an opening price has been established. If I say 10 and you say 20, both sides expect a middle position response, in this case 15, as a reasonable compromise to begin to lower the price.
The Shift the Middle technique can maneuver your negotiating partner to split the difference in your favor and move them toward the number you need.
It begins with a traditional “meet half-way” or “meet in the middle” basis for bargaining. I add a little twist I call “Shift the Middle”, that benefits you in any negotiation. This is a simple negotiation technique that provides consistent profitable results for you in any transaction. It has enormous value and it is a tactic you can use again and again when bargaining.
Here’s the technique:
You just make note of THEIR opening number and make YOUR response smaller than halfway.
The following is a true example of a commercial property re-trade I negotiated:
The negotiation took place at the end of the Due Diligence period on a Commercial Property I eventually acquired. My calculations indicated I needed a $100,000 credit for repairs from the seller to make the numbers work. I began with a request for a $200,000 concession from the seller up front.
The seller countered with $100,000.
- notice he came up from zero to $100,000 in one step - he automatically split-the-difference . . . a response I expected when I made the request.
An impulse response for me might have been to split-the-difference again and say $150,000.
Instead I used Shift the Middle and named a smaller amount than the expected $50,000 drop. I floated a request for $190,000 - and dropped by only $10,000.
The Seller countered with $130K
- Notice again, he moved toward my offer by countering with $30,000 above his initial $100,000. I moved $10,000, he moved $30,000. I successfully applied the Shift the Middle technique.
I requested $180K next and the Middle moved my way again . . .
The Seller and I eventually settled on $145,000, a $45,000 increase above the $100,000 I actually needed, and the acquisition now worked on paper. After this technique got me what I wanted, I proceeded with the close of the transaction. The re-trade worked and the deal was $145,000 in our favor.
That is how you Shift 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 “meet in the middle”.
Learn and profit from this bargaining tactic:
I really love this, once you get used to it, you just learn to rely on it. Try to Shift the Middle in your next negotiation . . . especially if it seems like a just too simple tactic. The results will reward you again and again.
Learn more from a proven Investor Education Resource:
Investor Tours University is a dedicated resource helping investors build wealth and achieve their defined level of success. We offer state-of-the-art commercial real estate investing education, tailored to meet the needs of investors with varied backgrounds and experience levels. Our faculty consists of a network of national experts in legal, tax, investment strategy, property management, acquisition and sales professionals who practice what they teach investors, which is how to achieve generational wealth using commercial real estate.
Monte Lee-Wen is an author, CEO and the Founder of Investor Tours University. His website is http://www.investortours.com
ITU is a subsidiary of the Partnered Property Acquisitions Group, The PPA Group, of Austin, Texas. The PPA Group has holdings of over $40 million in commercial real estate with a projected target of over $100 million in commercial real estate acquisitions by the close of the forth quarter of 2007. Visit http://www.theppagroup.com
The PPA Group does business in all 50 states. Monte may be contacted at (512) 651-0513. ITU is the #1 educational resource for in depth commercial real estate investment education offering a proprietary investment system taught by Monte Lee-Wen.
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Tags: Commercial Real Estate, investing, Investor Tours, Momte Lee-Wen, negotiation, PPA Group
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