Today, I was thinking about a recent negotiation and deal that I'm in the midst of, and was wondering to myself how the other party got the upper hand. The deal isn't done yet, by any means, but I'm sitting there contemplating to myself how it is that I am on the down side of this deal.
Save heart faithful reader, the deal isn't done yet, and we're far from the end, but I'm thinking to myself - how did I get to this point?
And then I started thinking, who in Real Estate has the upper hand more often than not? And I was reminded that it is me. It's me the buyer. The buyer usually has the upper hand. Under normal circumstances, the buyer doesn't need to buy. The seller usually has the motivation to sell, but the buyer, unless constrained by a 1031, usually doesn't "need" to buy.
Don't get me wrong, I've heard "I don't need to sell" about a thousand times. Maybe a million times. If only I had a dollar for every time I've heard that statement. However, it usually is the seller who is already committed to selling, and they're looking at spending that money and their emotion (key word) is already attached to selling the property. The buyer really is holding the cards, aren't they?
There are details about this (potential) sale that I'm not enthusiastic about. I may be able to negotiate around them. Maybe. Let me see what I can do, and I'll fill you in on more details later. It's not about the price. The price is sooooo insignificant in this negotiation. It's the other terms. My mentor once told me this: The part of the system that has the most flexibility has the most control. Think about the heating system. What has the most flexibility? it's the thermostat. The thermostat controls the entire system. So stay flexible.
