Recently, I had a real estate buyer client who submitted an offer on a home in the Boston suburbs. As the real estate transaction was proceeding, we came up to the home inspection. At which point Tiger Home Inspector came up with several defaults with the property. At that point, the buyer had several choices some of which could be, accept the home as-is, walk away from the real estate deal (as the home inspection was a contingency), or renegotiate the deal.
My real estate client decided she would renegotiate the sales price. The Seller’s broker at this point, probably based on emotion, was upset and told us that they needed the proceeds of this deal for the new home that they were under contract with. Mistake one, when negotiating be honest, but don’t provide the other party with too much information.
Needless to say, we used the information that the other Boston real estate broker provided us to our advantage and we were able to save over $20,000 on the sales price. (Our original goal was $15K)
While writing this Boston real estate blog post I’m reminded of this short story on the power of negotiating.
Great Garbo (1905-90), the 1930’s Swedish-born film star, demonstrated how to negotiate with a bullying adversary, and particularly the tactic of ‘walking away’. After Garbo had become established as a major star, she decided to negotiate a contract that suitably reflected her considerable box-office value to the producers. Accordingly she demanded a weekly fee of $5,000 – compared to the derisory $350 a week she’d previously been paid. When film mogul Louis Mayer heard Garbo’s demand he offered her $2,500. Garbo replied simply, in her Swedish-American accent, “I think I go home..” And off she went.
Garbo returned to her hotel and stayed there, not budging, while Mayer stewed – for seven months – at which Mayer eventually caved in and gave Garbo what she asked for.
The resonance of the words with Garbo’s real-life didn’t just extend to her negotiating style: she retired in 1941 with the world still at her feet, and lived the rest of her life an obsessive recluse in New York home after becoming a US citizen in 1951.