Power Negotiating for Realtors

By Brian Madigan LL.B.

Sometimes, too much is too much! A realtor’s ability to negotiate a particular transaction is often based upon the client’s bargaining position. Often, this is overlooked.

Naturally, if the client is in a very strong position, then few, if any, concessions will be granted. A client in a weaker position will have to offer some concessions in order to get the deal done.

The problem most commonly encountered is the failure on the part of the negotiator to realize and appreciate their own client’s bargaining position.

Let’s assume that the client wishes to rent a small storefront of about 300 square feet in a good location in a rather large and thriving commercial plaza to sell newspapers and various confectionary items.

The location is right across the hall from one of the anchor tenants, so traffic is virtually guaranteed. The landlord, a major owner of commercial retail space has a standard form lease which has been drafted to suit its circumstances.

The difficulty from the perspective of the newspaper stand operator will be to have any serious changes made to the landlord’s standard form lease. Possibly, an anchor tenant might be able to negotiate, but not someone looking for 300 square feet.

However, day after day, agents will seek to negotiate substantial terms contained in the standard lease form. This is usually undertaken recognizing that some of the provisions are rather one sided, which is of course true. But, it’s still not negotiable. It’s not in the best interest of the landlord, and it’s often foolhardy. It would be far better to review the document carefully, and determine whether the document in its entirety is acceptable.

So, what happens? The agent spends countless hours drafting significant concessions. Finally, the offer is submitted. Time passes and the agent inquires about the status. Actually, there is no status. The landlord will not sign it back. The landlord will not even incur the expense of having their lawyer’s look at it.

The deal dies! It didn’t have to, but the newsstand operator is now off to another location. Facing similar circumstances, the client will likely have similar results. No deal.

Finally, the client either fires the agent, or they both “give in” and sign something that a landlord will accept.

The problem at the outset was an inability to determine the client’s bargaining position. This happens to many new agents who are inexperienced. Rarely, does it happen to a seasoned professional. And while they may get good marks on an exam, they are not getting good marks from their clients.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Coldwell Banker Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com

Resolving Matrimonial Disputes

By Brian Madigan LL.B.

Gas Shortage again!

By Brian Madigan LL.B.

What is that going to mean for real estate?

As this is published thousands of motorists in the GTA line up for gas. They are the lucky ones, others just stay home. They likely passed several stations that had closed because they ran dry.

Briefly, there is a concerning that hurricane IKE may damage some oil refineries, or keep them closed for a few days.

What is that going to mean for real estate?

In the very short term, probably nothing. It’s just a small inconvenience. Longer term, it will definitely have an impact.The question however is where? The most vulnerable segment of the market is recreational properties within reasonable commuting distance of major urban areas. Basically, that means downtown Toronto.

The time limit for travel seems to be about 3 hours. Beyond that, most people are prepared to reconsider the issue of ownership. Sure, they’ll visit friends on a long weekend, but they won’t buy themselves.The recreational market is vulnerable since it is a luxury, and in bad times, that’s the first thing to go.

Let’s assume that gas prices are still within reach of the average consumer. At the moment, that will take us up to about $1.35/litre. Beyond that, consumers will balk, and defer driving to distant locations. Work comes first, and there’s not a lot of money leftover.The next issue is availability. If there are substantial shortages, it is going to be difficult to get people to line up for an hour or so before they embark on their 3 hour journey.

Once they are on the highway they’ll all be going at the limit of 100 km/hour or less. It will simply to too expensive, and use up far too much gas to travel any faster. This will add another 30 minutes to 45 minutes to the 3 hour trip. Now, we are pushing close to 5 hours from the time you left your house.However, we didn’t talk about traffic congestion. If we simply have the same number of cars heading out of the City at about the same time, we are going to add to the congestion.

The reason is that on a Friday afternoon, many people leave at about 3 o’clock in the afternoon. That really won’t get any earlier. They still have to get their work done. It will simply mean that fewer people will be able to “get away early”, basically adding to the already overloaded streets and highways.

Then, the PROMBLEM: that past weekend wasn’t fun! Five hours to get to the cottage battling traffic with everyone going 85 km/hr, and 5 hours back on Sunday. But the saving grace on Sunday was that you left first thing on Sunday morning to avoid the rush.

So, now the question: is it worthwhile to own a cottage or should you just visit some friends? The more people who say “No” to that question, the worse it becomes for the recreational property market which depends so much upon:

• Cheap gas

• 3 hour commutes

• moderate traffic

If that changes, so will the market! And, that will be good for some, and not so good for others.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Coldwell Banker Innovators Realty

905-796-8888

http://www.ontariorealestatesource.com/