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3. Manage the timing.
The passage of time works against most buyers in sellers' markets.
Why? It gives sellers the opportunity to find other potential buyers and get you bidding against each other.
Avoid this by putting relatively short deadlines on your offers and being prepared to commit and move forward quickly on deals if necessary.
4. Beware of your ego, bidding wars, and the pack mentality.
Auctions almost always favor sellers because they feed competitive buyers' egos and need to "win."
So if you end up in an auction or a bidding war, keep your ego in check and maintain your focus on your predetermined goal.
Don't get carried away by the competitive gamesmanship element of the process.
Winning may carry an unacceptably high cost.
It's also tempting to bid up when you see another investor, especially a sophisticated one, bidding up the same property. If they are bidding, many think, it must be worthwhile and a good value.
This pack mentality is no substitute for your own due diligence and your own effort to set and stick with your goals.
Others could be bidding with a completely different investment perspective and set of financial expectations than your own. For example, they may intend to commercially develop the property in a unique way, thus justifying for them a relatively high price.
Your interest and business model, on the other hand, may be shorter-term and may not justify nearly that same price. Don't bid up based on others' expectations.
Let's face it, it's not easy to be a buyer negotiating in a sellers' market. But you can help level the playing field. And even if you don't, all may not be lost. You may still end up profiting nicely if the sellers' market just keeps on going.
That's a bet many seem to be making these days.
Marty Latz, a negotiation columnist for The Business
Journal of Phoenix where this column originally appeared, is President of Latz
Negotiation Institute, a national negotiation training and consulting firm based
in Phoenix, Arizona. He has developed and taught negotiation training programs
and seminars for corporations, cities, bar associations and law firms nationwide.
Participants at his courses leave behind the intuitive and instinctive -- along
with their inherent uncertainties -- and develop the strategic mindset thatís at
the heart of successful negotiation.
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Copyright © 2004, Marty Latz
Copyright © 2004, The Negotiator Magazine