If you want to make a deal, then you’ve got to deal. You’ve got to trade. Yes, it requires give and take. You’ve got to satisfy the other side’s legitimate needs and concerns. That’s why I’ve never understood any of the negotiating responses listed below. Some can be countered with the question, “why.” Others are just negotiation enders or merely the start of a detour about process, not substance. Even the ones that naturally lead to a “why” response are sidetracking frustrations. They wouldn’t be such if the speaker continued with “because.” After all, how can you satisfy someone’s legitimate needs or concerns if they haven’t expressed them?
Here is a working list, AND a strong invitation from Ruminations – a Retail Real Estate Law Blog to subscribers and all other readers for additions to the list. As with comments, they can be sent to www.retailrealestatelaw.com.
• The bank won’t let us do that.
• You can’t get that in an insurance policy.
• That’s our standard form.
• No one ever has raised that objection before.
• We’ve never done that before.
• Our client (or, the owner) won’t agree.
• We don’t have that in any of our leases.
• It can’t be done.
• I’ve never heard of that.
• You don’t know what you’re talking about.
• That’s not possible.
These do not move the ball forward. What we need instead, are reasoned responses.
Why do people make deals? Ruminations thinks because they want to exchange something they hold in lower regard for something they hold in higher regard at that point in time. Here’s a very simple example. A buyer has a dollar bill and she wants her dollar bill less than she wants that ice cream cone owned by the seller. The story might be different in the middle of the winter than in the middle of the summer. In the context of Retail Real Estate, a property owner may want that $20 million bank check more than it wants the property, and the buyer with the $20 million may value that money less than it covets the property.
Now, it isn’t always that clear that each negotiating party is “quite” ready to make the deal. Perhaps the $20 million needs a little enhancement; whether that is a small increase in amount or a little more certainty (such as fewer contingencies before it gets paid). Perhaps the property needs a little “extra,” such as a reallocation of some risks or a little extra investigation. The reader can think of her or his own examples when it comes to leases, loans or any other kind of “deal.” To be able to craft such enhancements, something more than “we’ve never done that before” would sure be helpful.
Again, please send your suggested additions to the list as well as your comments (even barbs) to www.retailrealestatelaw.com.