In all my years negotiating leases, I have to say that the one biggest fear I hear with leasing professionals is simply the fear of the unknown. If the property owner, listing agent, or even property manager is not familiar with a certain type of lease scenario or rental structure, it can be a nerve racking experience for some. But it doesn't have to be this way. By using a few simple methods and trusting these methods, you should come through the process with a spring in your step and a pat on the back. At least that's the plan.
ORGANIZE
By organizing your methods in a manner that can be repeated, you are on your way to jumping this very hurdle. For example, in a previous post titled, How to Write an Effective Letter of Intent, I went over the details needed to effectively negotiate a deal that will result in few to any changes on the main body of the lease. In this LOI, most of the basic information needed to handle the lease will be disclosed by both parties. If there is something specific to the tenant, the tenant could then add the necessary language to the LOI and take it from there. You then have time to research and make sure you understand what is being asked.
TIME
Another factor that is forgotten is simply time. Remember, negotiations take time. You're the leasing manager, so you set the time frame. Tenants may try to rush you because they have to move in in the next two days, but that's not your doing. Be mindful of time constraints, but remember, you're the one that will have to deal with this tenant for the next 3 to 5 years if not longer. Mistakes on a lease can be costly in many ways, so make sure that you set the pace and expectations for a reasonable time to draft the lease and respond to inquiries.
QUESTIONS
Don't be afraid of asking questions if you're not sure about what they're talking about. This is another issue that many landlords or leasing agents face. They are afraid to look inexperienced, or incompetent so crucial terminology affecting the lease is sometimes glossed over only to bite them later on. Remember, not everyone uses the same terms the same way and not everyone carries with them the same definition of a particular term. It's fine to say "I'm used to working these other kinds of deals, but I haven't worked a deal like this or a tenant with your particular needs, etc, etc.. What exactly do you mean by _______?"
CONFIDENCE
If there is one thing that can make this scenario worse, is dealing with that Realtor or Broker that knows everything about everything that there is to know about everything and has more experience than all the experience of every agent in the field combined to the 10th power. You'll know this because they will let you know within the first 5 minutes of your conversation. It's a tactic used to intimidate so the deal will go in their favor. We've ALL encountered this person. Don't worry, your system works the same with this person as with any other. First, you compliment them on their experience, second, you remain assured and confident in your system that will take you through this experience without a hitch. Many times I've come across the urge to go through my own resume in response, but at the end of the day, it's best to show what you know through negotiations, not bragging.
KNOWLEDGE
Finally, a great confidence booster is knowing your market. Take the time to research the market, not only for rents, but other properties as well. Information is key when negotiating a deal. How many times have you heard these questions? Why is your rent so high? Why don't you include this in your lease? Are you going to make any improvements to the building? All of the other properties are offering this, why aren't you? The more you know, the easier you will glide through these questions and come out on top.
In summary, keep in mind that there is not one person that knows everything. Don't allow yourself to be intimidated by the know it all agent. It's ok to ask questions and slow down the process to give yourself time to think and process the information given to you. Use the LOI template to help organize your lease and lease negotiations. And remember, breathe.....it's only real estate.
www.allrealtymanagement.com
ORGANIZE
By organizing your methods in a manner that can be repeated, you are on your way to jumping this very hurdle. For example, in a previous post titled, How to Write an Effective Letter of Intent, I went over the details needed to effectively negotiate a deal that will result in few to any changes on the main body of the lease. In this LOI, most of the basic information needed to handle the lease will be disclosed by both parties. If there is something specific to the tenant, the tenant could then add the necessary language to the LOI and take it from there. You then have time to research and make sure you understand what is being asked.
TIME
Another factor that is forgotten is simply time. Remember, negotiations take time. You're the leasing manager, so you set the time frame. Tenants may try to rush you because they have to move in in the next two days, but that's not your doing. Be mindful of time constraints, but remember, you're the one that will have to deal with this tenant for the next 3 to 5 years if not longer. Mistakes on a lease can be costly in many ways, so make sure that you set the pace and expectations for a reasonable time to draft the lease and respond to inquiries.
QUESTIONS
Don't be afraid of asking questions if you're not sure about what they're talking about. This is another issue that many landlords or leasing agents face. They are afraid to look inexperienced, or incompetent so crucial terminology affecting the lease is sometimes glossed over only to bite them later on. Remember, not everyone uses the same terms the same way and not everyone carries with them the same definition of a particular term. It's fine to say "I'm used to working these other kinds of deals, but I haven't worked a deal like this or a tenant with your particular needs, etc, etc.. What exactly do you mean by _______?"
CONFIDENCE
If there is one thing that can make this scenario worse, is dealing with that Realtor or Broker that knows everything about everything that there is to know about everything and has more experience than all the experience of every agent in the field combined to the 10th power. You'll know this because they will let you know within the first 5 minutes of your conversation. It's a tactic used to intimidate so the deal will go in their favor. We've ALL encountered this person. Don't worry, your system works the same with this person as with any other. First, you compliment them on their experience, second, you remain assured and confident in your system that will take you through this experience without a hitch. Many times I've come across the urge to go through my own resume in response, but at the end of the day, it's best to show what you know through negotiations, not bragging.
KNOWLEDGE
Finally, a great confidence booster is knowing your market. Take the time to research the market, not only for rents, but other properties as well. Information is key when negotiating a deal. How many times have you heard these questions? Why is your rent so high? Why don't you include this in your lease? Are you going to make any improvements to the building? All of the other properties are offering this, why aren't you? The more you know, the easier you will glide through these questions and come out on top.
In summary, keep in mind that there is not one person that knows everything. Don't allow yourself to be intimidated by the know it all agent. It's ok to ask questions and slow down the process to give yourself time to think and process the information given to you. Use the LOI template to help organize your lease and lease negotiations. And remember, breathe.....it's only real estate.
www.allrealtymanagement.com
written by: Victor A. Abreu