Negotiation is an intricate subject matter, which is why many courses, websites, and books provide guidance on navigating the process. These resources are fantastic for an individual negotiator. What is typically missing or rarely addressed are the challenges confronting a team during a negotiation. In addition, and most importantly, how does a team achieve success during a negotiation? Let’s examine the team dynamics of negotiation and how to achieve success.
One must remember that a negotiation becomes more complex when two or more negotiators represent one side. This complexity can be positive or negative, depending on the individual member’s preparation and knowledge of negotiation.
For example, when there are only single negotiators on each side representing a buyer or seller, the individuals do not have to concern themselves with the final agreement reflecting the views of any other person except their client. It becomes more complicated when team members attempt to incorporate their own preferences and priorities.
Negotiating with a team significantly changes the dynamics and influences what happens at the table. According to Lewicki, Saunders, and Barry (2006), a team must consider five factors to conduct an effective and successful negotiation.
Key Takeaways
- Team negotiations are inherently more complex than individual negotiations. Additional challenges arise from differing perspectives, personalities, and the need for coordinated strategies.
- Teams must account for several factors to ensure success: the number of members involved, informational and social complexity, procedural details, and strategic oversight.
- A well-prepared team with clearly defined roles and goals is crucial for a successful negotiation. This preparation includes researching the opposing side and aligning team objectives.
- Maintaining a unified front during negotiations and assigning specific roles, like a lead negotiator, ensures effective communication and better outcomes. Attention to detail in the agreement phase is key to avoiding future disputes.
5 Factors to Consider When Negotiating as Part of a Team
Team negotiations, like what you may experience when closing a commercial real estate deal, require a different set of tools than negotiating with an individual. Here are factors to consider during team negotiations.
1. Number of team members involved
When a team is involved in a negotiation, the primary concern is that each party has adequate time to speak and be heard. When adding a team, these questions arise: Do teams behave differently than individuals? How does the presence of a team change the way parties interact with the other side? Does each member of the team have an equal say?
2. Informational complexity
More parties involved in a negotiation bring additional issues, positions, and perspectives, making it more challenging to incorporate and discuss all the contract parameters.
3. Social complexity
Personalities can affect negotiations. Is one member a distributive (competitive) bargainer and the other integrative (cooperative)? Team members may attempt to utilize their style to persuade others toward their own point of view, causing friction among them.
4. Procedural complexity
Presenting an offer is more complex when working with a team. Team members may have to discuss how to manage the process, such as opening statements and presentation of offers. Otherwise, they may display a lack of cohesiveness to the opposing side.
5. Strategic complexity
The team must monitor the moves and actions internally and externally regarding what will happen next in the negotiation.
Related Article: Should I Work Solo or With a Real Estate Team?
Team Management of Negotiations
Given the increased complexity of team negotiations, what is the most effective way for a real estate team to proceed? Lewicki et al. (2006) outlined three key management stages for achieving success: the pre-negotiation stage, the formal negotiation stage, and the agreement phase.
Pre-negotiation stage
In the pre-negotiation stage, team members prepare for the actual negotiation. This involves setting objectives, assigning roles, and conducting research. A successful real estate team must ensure that every member understands their responsibilities and the overall strategy.
This stage is crucial for aligning the team’s goals and ensuring they are well-informed on the key issues to negotiate, such as property prices, buyer preferences, or seller expectations.
Teams must also conduct a thorough analysis of the other party’s position. This could mean studying market conditions, understanding client motivations, and anticipating potential obstacles. A well-prepared team enters negotiations confidently, increasing the likelihood of reaching favorable outcomes.
Formal negotiation stage
In the formal negotiation stage, the team presents its case and engages with the opposing party. Effective communication, coordination, and adaptability are essential during this phase. Each team member must contribute according to their expertise while maintaining a unified front. Whether discussing contract terms or addressing buyer concerns, team cohesion is critical to maintaining leverage.
Real estate teams can also benefit from having a designated lead negotiator. In contrast, other team members can focus on observing body language, asking clarifying questions, or providing technical insights when necessary. This division of roles ensures every detail is noticed, and the team can pivot swiftly if needed.
Agreement phase
Once terms have been agreed upon, the team moves into the agreement phase, where finalizing the contract is the main priority. At this stage, attention to detail is paramount, as any ambiguities in the agreement can lead to future disputes. The team should carefully review the terms to ensure they reflect the negotiated outcomes and that all parties are satisfied.
In real estate transactions, this often involves drafting or reviewing contracts, finalizing inspections, or securing financing. The team must remain vigilant and proactive, ensuring that any final hurdles are cleared smoothly and the deal closes successfully.
In summary, one theme that runs predominantly through a negotiation involving a team is the need to monitor and manage the negotiation process because of the increased complexity. Becoming knowledgeable in the five factors outlined by Lewicki et al. dramatically improves the overall effectiveness and success of the negotiation process.
Whether you will be negotiating as part of a team or as an individual, consider getting additional negotiation training through the Real Estate Negotiation Institute (RENI). RENI will teach you negotiation techniques to help you secure the best deals, close transactions swiftly, and deliver exceptional value to your clients.
Learn more about RENI certification options and enroll today.
Sources:
Kolb, D. M., & Williams, J. (2003). Everyday Negotiation: Navigating the Hidden Agendas in Bargaining. San Francisco, CA: Jossey-Bass.
Lewicki, R. J., Saunder, D.M., & Barry, B. (2006). Negotiation. New York, NY: McGraw-Hill.
Shapiro, D. (2016). Negotiating the Nonnegotiable: How to Resolve Your Most Emotionally Charged Conflicts. New York, NY: Viking.
