Compromise may be a necessary day to day reality with your children, between your children or your with your spouse, but is it really a good idea in real estate? If the ‘perfect property’ is found directly next to an interstate, is that compromise okay? For some, yes, and others, no. So is it really a compromise at all?
Compromise usually is found in the settlement of disputes (which most likely should have been avoided in the first place). Those disputes being resolved by each side making concessions. But, is the acceptance of lower standards really worth it? What if an arbitrator announced that everyone today would be a looser?
Many people are skilled at listening to two sides of a dispute, and devising a compromise acceptable to both, but that is not real negotiation. It is a “we compromised” situation. When the story is later told, the sound of “bummer” is in the air.
“I’ll just throw myself off this cliff if I don’t get everything I want!” might be a thought process that needs to inject some ‘compromise’ in order to survive at least and be a little happier at best.
But, when it comes to a negotiating strategy compromise is nothing more than capitulation, failure and foolishness when the original terms were thoughtfully assembled and good objective thinking was applied.
Why in the world would the various parties in a transaction all choose to loose? A much better strategy would be to continue the search for the right property or the right buyer.
In residential real estate often there is a dance around the offer where the buyer will come in low, the seller counters higher and they meet in the middle somewhere and call it a day. Was that compromise or just the expected moves in what can be perceived as a typical transaction?
Upon closer examination the methodology of testing the waters (on both sides) can be sound advice when one party or the other is looking for advantage. This should not be confused with compromise.
A seller back in ‘the crash’ may have had a number or other terms (such as a time schedule) to meet, and looking to move on, would willingly accept a lower number from a ‘paper high’ which was still an overall gain from the original acquisition. Did the seller loose? Still walked away with cash in the pocket…
A buyer with a great rate lock of 3.85% finds a property and is will to ‘pay-up’ a bit to get that home with everything one could imagine, understanding that in the next weeks interest rates are forecast to rise. If the numbers were run with care the long-term savings would far out weigh ‘the compromise’.
The commercial world of real estate functions without the emotional factors seen in the residential market place. The numbers speak above all. A range is defined well before acquisition or sale. The deal does not get done when it does not fall within the pre determined criteria. No compromises are made, just deals that are passed on or walked away from regardless of transaction side.
Yes, everyone is looking for position, advantage or gain, but not with compromise as their negotiating tool. More often these negotiations will find the players offering terms to make the transaction a good deal for all, finding solutions to objections allowing the deal to move forward.
A concession may be made, but on the other side of that concession may be the term that is just what a party is looking for realizing a big ‘win’. “Beauty is in the eye of the beholder” and so are the private perceptions of the parties and their negotiated terms in a deal.
Some might say this is nothing more than semantics, but negotiation is not a semantic exercise. Clear criteria, goals, objectivity and position coupled with the attitude brought in to any negotiation will define whether or not there is strategy or just chance and compromise.
Success is more easily achieved when one side can understand what the other is looking for or what is needed to complete the deal. There is nothing better than when everybody walks away a ‘winner’, and that is not compromise!