It's interesting how there are some things that get passed down through the generations.
Maybe it runs through the culture.
In the states, you get hardcore right wing bible bashers and there's something in the fact that America was colonised by first, Spanish Iberian Catholics, then by Portuguese and French missionaries, then by the puritan Calvinists…
It's no wonder religion, god and the bible still form such a strong part of their culture. Whether everyone believes in god or not, you only have to hear how much god plays a part in their politics.
Here, in Australia it's a different story.
We're a nation colonised by convicts.
And still today you can see how much disregard we have for authority…
We're a county of rebels and scallywags. Look at OUR politics!
But we are also primarily from Britain and it’s colonies… And there's the trail of that legacy as well…
Namely, we are essentially polite. We don't have the self-righteous brashness of the yanks.
We're much more likely to bite our tongues, be polite and not say anything when someone is rude or careless.
We still, to some degree have the British “I'm sorry” gene running in our systems.
It's in our culture.
And I'm not knocking it.
There's definitely a time and place for it and personally I like politeness.
But here's where I'm going with this.
There is a time and place for politeness, but commercial property isn't it.
I don't mean you have to be rude but I see people all the time scared to put in a calculated soft offer under the asking price…
I see people scared to hound their property managers to make sure they are getting what they want out of them.
I see people scared to negotiate hard because of what the vendors or the agents think.
For me, here's where I draw the line. There's no place for those fears in negotiating and managing commercial property. I often say to my students that you've got to operate with “Ice water in your veins”.
You are making a significant purchase – it's all about the numbers, and if those numbers don't work, or they could work better if you can negotiate a better deal, then you need to put aside those cultural norms and get real.
I've got a property right now for instance that has some vacancies. (It had them when I bought it – but I don't suggest you do that unless you know what you're doing).
I've got an agent trying to get me tenancies.
First of all I don't just leave it up to them – I've got other marketing streams doing the legwork to find the kind of tenants I want, but I also call them every week to see what they have been doing.
Think about it like this:
With those spots vacant I'm not only missing out on income, but since commercial value is based on rental income, it also means my property is undervalued.
As soon as I have those tenants locked in the value of that property is going to go up significantly – so I don't just want to rest on my laurels waiting for someone to come stumbling along and tyre kick for a while…
I want good quality tenants, on long term leases… And I want them now.
So I hound the agent and annoy them every week with questions.
I do my own marketing and when I find a good tenant I make sure they are good…
I grill them, I make sure they are up to the task of running a successful business out of my building.
Soft offers are another place politeness has no place.
It's not about being rude, but it is about saying “I think the vendor is ‘dreamin'” and I'm at more like this price XXXXX (whatever that is).
Again, I want to make clear that this is NOT about lowballing vendors. There are specific figures you need to have to be able to support an effective offer like this.
As long as you have those numbers then you can negotiate strongly. If they say no then you move on…
But people hate getting a “no”. Many people will avoid getting a no at all costs… To the point where they won't make the offer in the first place.
(Again – don't lowball – it wastes everyone's time)
If you've got your numbers locked in though, and you are confident that that is the right price, then stand by your convictions.
It's true that some will say no… (most even), but remember, you have got “Ice water in your veins” so getting a “no” means nothing.
All it says is you keep negotiating, or you move on to the next one.
There's no time for politeness and there's no time to waste.