The Book on Negotiating Real Estate - Review
Book review
The Book on Negotiating Real Estate by J Scott, Mark Ferguson and Carol Scott
Negotiation is a topic I have a lot of interest in. I’ve read a lot of books on negotiation and persuasion. In general, most tend to follow a standard format. This book breaks the mold in a couple ways. First, it’s specific to buying and selling (mostly buying) real estate. Second, it doesn’t follow the conventional format of negotiating books.
Full disclosure, I’m a fan of J Scott and have read some of his other books. He has a no-nonsense style and always gives complete transparency into what he’s doing. His wife Carol has not previously participated in book writing, to my knowledge, but is a licensed real estate broker and as such she undoubtedly has a lot to offer on this topic.
I haven’t read any of Mark Ferguson’s other books but he is a popular figure online and has written several books.
One of the key’s to successful negotiation that is often overlooked or under estimated by amateurs is the importance of preparation. The authors spend the first section on the importance of preparation and what information the negotiator should try to get prior to making an offer. This information is then used to construct a Minimal Acceptable Offer. The authors do a good job of developing the technique for how to construct offering and negotiating prices and providing a tool that the negotiator can use to visualize the relative positions of the parties involved. I’ve seen tables and charts used to construct the various price points involved in a negotiation, but the number line technique used by the authors is a great way for negotiators to visualize the back and forth of the negotiation.
Another area stressed by the authors is the importance of relationships and rapport. It’s a well-known fact that people do business with people they like. Even though a real estate purchase is a one off transaction that will not likely be repeated with the same parties again, building rapport can be a powerful tool. Since most real estate investors have ongoing business transactions in a particular market, the authors also focus on protecting your reputation and ensuring that the balance of power doesn’t get too out of whack during a negotiation. In particular they recommend making concessions simply to avoid the other party becoming demoralized and therefore putting the deal at risk. I’m not sure I agree with this strategy, but I understand why they offer it.
Books on negotiation often have lists of tactics and examples of how to use them in a negotiation. This book does not. Many of the common techniques found in other books are discussed here, but they are woven throughout the narrative and in the real world examples. This makes the book easier to read, but more difficult to refer back to if you are looking for a specific technique.
This book is focused on negotiating real estate deals, which is an important aspect of becoming a successful real estate investor. For a future edition or new book, I’d like to see the authors focus more broadly on deal making. Concepts like information asymmetry, staying power, discipline and deal flow will help good negotiators become good deal makers.
One final note, this book was self-published. Congratulations to the authors for doing that. However, I found a couple grammatical and spelling errors. Not a big deal, it just caught my attention.
Overall, this is a great book and I recommend it to anyone involved in negotiating real estate transactions. The authors bring experience from thousands of deals and present a practical, easy to understand technique that anyone can use.
This review was originally published on my blog: www.rentmoney.biz
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