REAL ESTATE AND NEGOTIATING SKILLS.

Do you want to be a real estate investor? If you do you had better learn to negotiate. The more complex the transaction, the more your negotiating skills come into play. As an example, consider the recent offer I received on a property I badly need to sell. The offer was for full price and I accepted the deal with few changes. No need to negotiate there, right? I wish. Obtaining a meeting of minds from buyer and seller is only the beginning. There are several major hurdles in a transaction even after the contract is signed. Perhaps the most critical of these is the inspection. Since it can be expensive to obtain a professional inspection, few buyers will bear this expense without first making sure they can agree with the seller on price and terms. In the example I cited, the buyer spent several hundred dollars for a professional inspection which took about five hours to complete. The result was that the inspector thought the building needed a new roof and the buyer wanted a substantial price reduction in order to replace the roof. I was able to produce a document that showed the roof had been replaced within two years. So much for the competency of the "certified inspector". Deal over, I won. Right? I wish it were that simple. I question the competency of the inspector and the buyer questions the competency of the roofing contractor who did the job. What was the outcome? Negotiations still in process. In a complex real estate transaction, you don't know the deal is done until you sign the final papers and cash the checks. Even then, there is the possibility of lawsuits for such things as misrepresentation and withholding material facts. The main point of this post is to let you know that some of what you read and see on TV about the huge profits in real estate investing don't tell the whole story. If you enter into this investing arena, you will need negotiating skills beyond those required for other types of investments. You also need to make sure you are willing and able to handle the stress involved. I could make several posts with examples of some of the negotiating problems I've encountered over the past 30 years. If you would like to see others, send me an e-mail or give me a call.