Recently, I wrote about how to breed success with positive thinking, and there was a section that readers wanted me to follow up on regarding how to make a good deal.
Here are my keys to making a deal when entering into any type of negotiating.
Listen
Listen not only to what the other party is saying, but look at their physical gestures as well. Often, you can find out a lot about how the other party stands on a deal by the way they communicate.
Have an alternative
Never go into a deal with only one option. Having another way to get your current deal done or a similar deal is always best before you start negotiating.
Also, don’t be afraid to walk away.
Understand your market
I don’t focus too much on fancy market studies and I would rather go off of our own instincts when working on a new development.
Always have leverage
If you make sure that you have something that the other party needs, you will be most successful in getting a deal done that benefits you the most.
Compromise
When negotiating a deal, you must be willing to achieve less than 100 percent of what you planned. A great deal is one where both parties get and give something to allow each to be successful.
When going through the zoning approval process to accommodate the municipalities, extra items are sometimes added to meet the city’s needs. For example, in our Powell Grand development we were able to put together tax increment financing to help pay for regional road improvements. This TIF also allowed the City of Powell to get a bike path extension and $1 million toward its Seldom Seen Park across from our development.
In our Mason Grand development, we were able to put together a beautification district assessment for all developers in our corridor to help enhance the common streetscapes and landscaping.
These were both compromises that led us to zoning approvals, and both cities were able to gain positive mixed-use developments.
Deliver
There is nothing more important than your reputation. It is important that you keep your word and follow through with the deal you have made, as it will help create future business for your organization.
Have fun
I don’t feel that I work a day in my life because I enjoy what I do. I even like the toughest and most complicated deals because they are the most rewarding when completed.
There isn’t a better feeling than creating a community where people are happy where they live.
Brian Schottenstein is the president of Schottenstein Real Estate Group, one of the largest developer/builders in the Midwest, focusing on residential and mixed-use developments throughout the Midwest and Southeast. It also is the only three-time Developer of the Year by the Building Industry Association.
