Commercial Property Negotiation Tactics - “Move the Middle”

In Commercial Real Estate Price 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.

Let me show you a technique I call "Move the Middle" that will naturally cause your negotiating counterpart to split the difference in your favor and move them in your direction ...  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 "Move 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 the gap between THEIR opening number and  yours and make your response less than halfway. Basically you NEVER split the difference and always negotiate in smaller increments than your counterpart.

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.
• BINGO - 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 Move 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
• BINGO AGAIN - 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 Move 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 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 "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 Move the Middle in your next negotiation... especially if it seems like a just too simple tactic. The results will reward you again and again.

Here's to your investing success.

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