Luxury Real Estate

Courtesy of Frederick Peters, President of Warburg Realty

Last week I wrote about the values which we at Warburg have tried to embody in our culture and in the way we do business. Of course, principals are all very well in theory; it is only in action where you can judge how much sticking power principals really have. And there is no topic on which the rubber of principal more jarringly meets the road than the topic of money.

As agents, one of the most complex issues we face, again and again, is whether a handshake has a price. Once a buyer and a seller agree on a price and terms, should that be sacrosanct? In many other states, agents are empowered to draw contracts; in some of them, each offer is written up as a simple contract and the seller signifies his acceptance of the offer with a signature. Game over. No lengthy delays, no fights between lawyers about which clauses in each of their riders are objectionable to the other. The negotiation of the deal and its finalization are concurrent. That would be a beautiful world for most of us agents to live in (although, I get it, not so great for the lawyers!)

Not so in New York. While it is rare that attorneys, given time, will not resolve whatever contractual issues there are, the week or two (or these days, even three) during which the contract is being negotiated leave the property in limbo; with no signed deal, is it available or isn’t it? There are two schools of thought, both arguably valid. One is, if the buyer can change his mind with no penalty and walk away, why not the seller? The other of course is that an accepted offer is the negotiated equivalent of a handshake, and that it should bind both parties regardless of what other temptations might appear. While I understand the first perspective, I am more in sympathy with the second, although it is not much in fashion today.

For most sellers, temptation is relative. Once they have an accepted offer, they will stick with it if someone offers them $50,000 more. $250,000, however, is another story. It is really hard to leave that sort of money on the table, even if there is already an agreement with someone else.

Over the years we brokers have learned that there are a variety of dangers in switching horses. In a disproportionately high number of cases, as much as 25 or 30%, the second buyer flakes out and the first buyer is so angry that the seller is left with nothing. As brokers, we often find ourselves in the middle of the storm, blamed by the angry buyer if he loses the deal and by the angry seller if both buyers disappear. All we can do is advise that sellers stick with the deal they have, which is often not advice they want to hear with visions of sugarplums dancing in their heads when some enormous offer makes an appearance the day before they were to sign with Buyer Number One.

What rarely gets discussed is the moral question. Now I have to start by saying, in none of these cases is it MY money which is at stake. I would like to think that I would stick to my word, but a quarter million is a quarter million. Still, doing what you have promised to do IS the right thing. We increasingly live in a world in which values are relative, but in my opinion the notion that a man’s (or woman’s) word is his/her bond shouldn’t be a relative concept. It is not morality if you will stick for 50k but not 250k. That is just another sort of price negotiation.

Einstein famously said, “Not everything that counts can be counted; not everything that can be counted counts.” I’m with him. 

You can read more on www.warburgrealty.com/blog.

Courtesy of Frederick Peters, President of Warburg Realty

Little did I imagine, as a graduate student anticipating an academic career during the late 1970s, only a decade later I would be running the residential sales division of a major real estate company, or that a few years after that I would actually BUY it. Coming as I did to the business of business by the seat of my pants, it took me a while to learn the ropes and figure out my personal philosophy. But over the years I have arrived at some conclusions about what is right for Warburg:

· If you don’t have your word, you don’t have anything. Often, my agents will come to me, lay out a situation, and ask me what I think is the right thing to do. My answer usually is “You already know the right thing to do. If you are struggling enough to want my opinion, it’s because something is getting in the way of your doing the right thing.” More often than not, that “something” is money. Don’t get me wrong, I like making money as much as (and maybe more than) the next guy. But it never takes precedence over doing what’s right. It has been my experience, over and over, that doing the right rather than the expedient thing repays you 100 fold, both in how you feel and what you earn over the long haul. Always acting with integrity is the best possible business plan.

· The customer must always be respected. As the President of a real estate brokerage firm, I have two layers of customers to whom I am answerable: internal customers (my agents) and external customers (our buyers and sellers.) These constituencies have different needs, but each always deserves the fundamental respect of being listened to and taken seriously. There is no room at Warburg for denigrating attitudes or comments about either our agents or our clients. My customers may not always be right (who is?), but they are always heard and their concerns are always paramount.

· A service business requires that you perform the service. How is it that so many agents, when you e-mail them for an appointment, decline by saying, “I will be there next Tuesday at 10, can you come then?” The answer is no! Similarly, how is it that the exclusive agent unlocks the door for you, takes a cell phone call, then chatters away for the next ten minutes while you are left to show the customer around the apartment, which neither of you has ever seen before? The owner hires an agent to perform a service, and two big pieces of that service are availability and courtesy. Accommodation, of buyers, of other agents, of appraisers, of managing agents, is (along with providing expert analysis and advice) what we do. An agent who thinks accommodation and/or politeness are an inconvenience is an agent who should find a different career.

· In business, you change or you die. I am not by nature an agent of transformative change, but I have had to learn! The pace of change in our business (and in every business) has accelerated since technology first swept through our sedate lives in the mid-80s. Computers, the fax machine, the Internet, handheld devices, cloud computing, social media - one after another they have resculpted our landscape such that many aspects of it are unrecognizable today. Failing to embrace the opportunities of the digital age in their ever-evolving glory leaves established companies prey to younger, hipper models as we all compete for the next generation of agents. I am proud of Warburg’s cutting edge digital and Web 2.0 focus, in which I feel we have been leaders. But this race is never over.

· In the end, it’s all about relationships. The service Warburg provides to its agents, and they provide to our clients and customers, revolves around one of the most personal, financially significant, and life-defining choices in people’s lives: the creation or change of a home. Most people need to feel a relationship with the person who will assist them in this process. Everything I have described in the four points above comes together here: great agents are trustworthy, they are attentive, they are responsive, and they are fast on their feet – all in the service of creating a genuine agent/client bond. It is my aim to create that same bond between the company and the agents who carry our card. No matter how much the world changes, a sense of personal connection remains the key to successful relationships: between me and my agents, between them and their clients, and between our brand and the world.

You can read more on www.warburgrealty.com/blog.

Courtesy of Frederick Peters, President of Warburg Realty

Every week, my agents at Warburg Realty receive calls from anxious buyers asking, “Has anything come up for me? Isn’t there anything new you can show me?” I make our buyers the following solemn promise: we are NOT hoarding these properties for family members or customers we like better. In fact, we are as frustrated by the lack of inventory as you. So I thought it would be interesting to write about the ebb and flow of inventory, both annually and over the arc of the last decade.

New inventory is more likely to arrive on the market at three major points during the year: on or about January 15th, on or about April 1^st, and on or about September 15th. These dates are somewhat variable, the latter two in particular, depending on the exact annual timing of Easter, Passover, and Rosh Hashanah. But generally speaking there is a post-New Year market, a spring market, and a fall market. Although the seasonality of our business has definitely declined over the last two decades, it is still rare for a major property to be placed onto the market in August, or the second week in December.

Of the three markets, the busiest is usually spring. Historically, the largest number of deals are consummated between April and June; prices also surge the most during these months. Mid-January, after the Christmas and New Year festivities decline, and September, at the end of the summer holidays, see less of a surge in listings than does the spring, but new offerings do often appear at these times.

The popularity of the spring market has primarily to do with the school year. For buyers with children, this is the moment to make a purchase which can then be spruced up over the summer and inhabited during the subsequent school year. And everyone’s real estate adrenaline flows a little faster in spring: daylight lasts longer, views look prettier, terraces feel more accessible.

That said, the flow of inventory has been constrained ever since the tax laws changed in the 90s. Until then capital gains from the sale of personal real estate could be rolled over from purchase to purchase over a lifetime; only when the buyer ceased owning or passed away were taxes due. When rollover was replaced with the $250,000 individual exemption and the $500,000 marital exemption on capital gains, that meant that for most of the country, whose real estate never generated a gain that large, the sale of a home became a tax free transaction. For New Yorkers, however, the new law proved onerous, especially for those who had been many years in the same home. With a low basis, and Federal, state, and city taxes amounting to over 27%, whether selling made sense was called into question. And for many owners of larger apartments and houses, that question still stands.

The impact of a slowdown in one segment of the market is profound. If owners of large properties decide that it is not tax-effective to sell, then those who want those larger apartments have fewer alternatives. So they renovate and make do in the homes in which they already live. A logjam develops; less selling at the top reduces the number of transactions all the way through the marketplace. This, to a greater or lesser extent, has been the reality of the co-op market for the past decade and a half. Those who have owned for many years often prefer to let their heirs pay the taxes, impeding the flow from the top of the pyramid.

And so we all wait, agents and buyers alike, for birth, death, job transfer, marriage, or divorce to create a chink in the dam through which a precious property or two flows down to those waiting in the tier below.

You can read more on www.warburgrealty.com/blog.

Courtesy of Frederick Peters, President of Warburg Realty

I polled my agents this weekend for their insights into the market and here is what they told me:

· Overall, there is a lot of showing going on. Open Houses are packed week-end after week-end in most locations. Buyers are frustrated at the rate with which new inventory is appearing on the market. Some have even ended up befriending other home shoppers they are encountering at Open Houses week-end after week-end!

· Showing these apartments is one thing, but selling them is another. There is a consensus among Warburg agents that the strong sellers in this environment are mint condition and price. Well priced mint apartments don’t stay on the market long, in any category, and they are frequently selling with multiple offers. Interestingly, the multiple offer phenomenon has spread downward into the 1- and 2-bedroom market, especially where these units are scarce. Several of our buyers have lost 1,000 or 1,500 square foot properties in competitive bidding in Chelsea, Flatiron, the West and Central Village, and the Upper West Side. These are all markets with big demand and little inventory in this size range.

· As a corollary, we are seeing an influx of renters into the first time buyer market at price levels from $500,000 into the multiple millions (although not so much above $5,000,000.) The record low vacancy rates and associated record high prices for rentals make buying, especially with today’s low interest rates, an increasingly attractive alternative.

· Those apartments which are NOT in mint condition or very well priced tend to linger on the market, be they big or small. We see a number of such listings which have been on the market for 45, 50, or even 75 weeks. Buyers tend to offer low these days on anything needing work, no matter how good the bones of these apartments are. And many sellers of these units came onto the market during the mini-boom of April and May of last year, when it seemed, briefly, as if prices were skyrocketing again. Then after Memorial Day they fell rudely back to earth, and for many it has been hard to catch up.

· At the top end of the market trading is brisk. There is VERY little inventory above $6 or $7 million. Nonetheless, the rules of price and condition still apply.

· In general, my agents believe that if a property doesn’t sell in the first month, the most successful strategy is to surgically lower the price. If the market has not responded during those first four critical weeks, it signals a price problem.

· The new condo market moves faster in every way than the co-op market, as foreign buyers compete with new West Coast Google and Facebook millionaires to buy luxurious pied-a-terres here in New York.

· Finally, throughout the marketplace, financing from the Bank of Mom and Dad is ubiquitous. We see more guarantor and co-purchaser situations (not to mention a year or two of maintenance in escrow) than ever before. And in spite of that, and the difficult economy, and the longer sale times, co-op Board turndowns are more frequent and, often, more inexplicable than ever.

The market has never been more nuanced than it is today. Each property type has its own metric and pressure points, as does each neighborhood, and each property size. Navigating these complexities is, more than ever, a full time job. 

You can read more on www.warburgrealty.com/blog.

Courtesy of Frederick Peters, President of Warburg Realty

Like other consultants, real estate agents both commercial and residential perform one function in the service of another. What we apparently do is make deals. But our real business is marketing our profound and fundamental belief in this beautiful city.

I like to say to my agents that we are the critical front line for the New York City Chamber of Commerce. And in recent years we and our colleagues in the commercial world challenged the status quo with every deal. The commercial market, so long in the doldrums, has continued to improve as more companies decide to recommit to headquarters in New York. Small businesses seek space to expand, often in boroughs other than Manhattan. Entertainment, technology and communications – New York reshuffles the deck and reinvents itself over and over again and we are on the front lines finding the spaces to make it work. On the residential side, we have traveled from a market with NO big ticket sales to a market of feverish big ticket selling – and not just to foreigners. But it isn’t just at the high end. There is competitive bidding all over Brooklyn. And now, as rentals remain so tight and so high, absorption is finally accelerating in the one bedroom markets on the East Side of Manhattan.

For real estate agents, more than those involved in almost any other business, there is no moving to New Jersey or Connecticut. We ARE the city we represent. Each morning we recommit ourselves to the excitement and uniqueness of living and working here, because more even than selling or leasing bricks and mortar, we are selling the concept of New York. I remember after 9/11 talking week after week about our commitment – how we had to believe that in the wake of that shattering event New York would be perhaps different but no less great. Amidst all that fear we needed to be agents of belief. And that has been true again during and after the recession. In persuading people not to move their companies or their families out of the city, we focus on the life the client is accessing even more than the space they may want to buy. Art, music, theater, playgrounds, schools, offices – all are easily accessible and nearby. And no matter what outsiders may believe, New York extends its welcome to everyone. We are a warm vibrant mix of sub communities within which everyone has a place. During the past week I walked through Central Park, went to theater at the Brooklyn Academy of Music, heard music at Avery Fisher Hall and the Armory on 67^th Street, went to see the Rembrandt portraits at the Met, visited with friends, ate in some terrific restaurants, shopped, worked, relaxed. I didn’t once need to get in my car. It was all right there.

Every day, we live it. We love it. So every day, residential or commercial, high price point Fifth Avenue penthouse or well priced Greenpoint warehouse, we aren’t just making deals. We are selling New York.

You can read more on www.warburgrealty.com/blog.

Courtesy of Frederick Peters, President of Warburg Realty

I had a big birthday last week, and big birthdays make you think. In addition to the larger questions, I have also been contemplating my love affair with living space, and how that fascination with the ways space is organized and deployed has informed my real estate career. Furthermore, I think the way we structure our living spaces can offer substantial insight into what we value and believe to be important.

I grew up in one of those big, full floor, Upper East Side apartments designed by J.E.R.Carpenter. The staff rooms were inhabited by the staff. The kids were, mostly, supposed to stay out of the kitchen. Breakfast, lunch (on the rare occasions we were home for lunch), and dinner were eaten in the dining room. My parents entertained frequently, so the living room, with its extremely formal furniture, was often in use. When there were no guests, or only a couple of them, they sat in the library. We kids mostly stayed in our rooms, which we shared with a sibling. No one in the family had his or her own bathroom, and there was no powder room; it was a regular occurrence that some middle aged guy would walk through my room while I was doing my homework to use the bathroom. There was no family room-- had they even been thought of in the 50s? I think life had changed little, at least for our family, since the time the building was built in 1916.

Then came the 60s! The era when children were to be seen but not heard ended; my brothers and I talked, talked, talked from morning till night. And where did we subject my increasingly frazzled mother to the diatribes? The kitchen-newly liberated from its function as a place for the staff (most of whom had retired)! We sat in the kitchen, drinking endless cups of tea while deconstructing the old world order. That was the time when the EIK entered the Manhattan acronymic lexicon as a place for the FAMILY to eat. The grand old apartments were reconceived by a new generation of parents who actually wanted to interact with their kids. And suddenly these kids had needs: each of them needed a bathroom. They needed walk in closets (for what? I had a blazer, a winter jacket, a summer jacket, and a suit. I did not need to walk into anything to find THEM.)

During the 50s, apartment house architecture was pretty much at a nadir. White brick was ubiquitous, as was “efficiency.” Apartments were tight: low ceilings, smallish rooms and bathrooms, minimal foyer and hallway space. The 60s weren’t much better, and then in the 70s the city was broke, nearly went into bankruptcy, and there was a big overstock of housing no one wanted to buy or rent, since the common perception was that the city was dying. However, it didn’t die, and in the 80s apartment house construction came back, And, little by little, the changed priorities which I had dimly begun to perceive sitting around the kitchen table as a teenager became architecturally codified. Foyers came back in the new condos of the 80s and 90s, as a symbol of grace and a recognition of the importance of a sense of entry. Every bedroom got a bathroom, and master bathrooms became larger and more opulent, a reflection of the new consumer’s taste for high end materials and a sense of pampering. Bedrooms remained small however-- a place to sleep. The locus of family life (which I would have to say was probably the dining room when I was growing up) became the kitchen. Being a good cook became important, even if you HAD a cook. And even if you DIDN’T cook, you still had to have a fancy kitchen with expensive name brand appliances. A family room, perhaps made out of those now obsolete maids’ rooms off the kitchen or the increasingly obsolete dining room, was the new place to hang out and watch TV.

The high end new condos of today try to emulate the prewar ideal in an updated manner. Most of them still have small secondary bedrooms, but each one has a bath. There is ALWAYS a powder room. Master baths are huge marble clad affairs, often putting to relative shame the bedrooms which they serve. Kitchens are large and as tricked out as possible with name brands: Gaggenau cooktop, Miele dishwasher, SubZero fridge. There may be a servant’s room, rarely two, never more. These homes are clearly designed for a far more democratic life than that which I lived as a child. Today, everyone hangs out together. The stratification of my life as a child was reflected in the architecture we inhabited: the service area of the apartment reserved for servants, the bedroom wing where most of the lives of the children took place, and the grand public spaces designed for the adults. Luxury today tends to be reflected less in room size (although there are some big big living rooms in some of the new condos) or the way functions are divided. Open, loft like spaces, in which everyone is happily interacting with everyone else, are very popular. High end finishes, multiple bathrooms, spacious kitchens and family rooms-these are the markers for today’s affluent but far more casual user. 

You can read more on www.warburgrealty.com/blog.

Courtesy of Frederick Peters, President of Warburg Realty

In the last ten years, the meaning of running a company has changed, as has every job within Warburg Realty. At every level, the Internet, the faster pace of life, and the changeover in generations has radically altered how we manage our business and how we interface with those around us. Our agent/client interaction is different. Our marketing is radically different. Our brand extension strategies are different. And how we manage agents is different. I want to look at a few of these changes and assess what they add up to.

· Our agent/client interaction is different. I have written extensively about this before. Pretty much every real estate shopper now lets his or her fingers do the walking (or clicking.) Our job is to provide market knowledge and expertise to enhance and focus the search, create a successful negotiation, and consummate a deal. More often than not, the buyers find most of what they want to see themselves, online. And while our business was always SORT OF a 24/7 business, now it is TRULY a 24/7 business. Clients e-mail us at all hours, and we had better reply fast. Ever since the introduction of fax machines, everything is urgent.

· Marketing has been transformed not only by the change from print to online, but equally by the shift from Boomer to Gen X and Gen Y. Flashier content, greater ease of use, and speed of response time define success in today’s on line marketing environment. Building a core brand value proposition while constantly updating content is the key to capturing the fickle on-line public. While brand loyalty is still significant to boomers, younger consumers are more interested in a cool, constantly evolving presentation.

· Our branding strategies have changed to try to accommodate the need to be both established and up to the minute at the same time. We are working all the time to convey both the solidity of an established brand and the zip of a forward-thinking brand. Our strategy involves print for the former, while we use social media and our platform on the HGTV show “Selling New York’ for the latter. Our print ads are meant to create a feeling of history and reliability, while our website, social media and TV attempt to create intimacy (though not TOO much.) It is always a balancing act!

· Sales managers everywhere, in every industry, confront a brave new world. In addition to the old ways of obtaining and managing customers, there are a host of new ones, which come with new problems. How much on Facebook is too much? Social media is personal, but it can be a little too personal.( Co-op buyers need to make sure their social media, AND those of their kids, are scrubbed before they complete their application. ) How do you teach people not to forward chain e-mails, lest a disparaging comment be hidden seven messages down the e-mail chain? How can an agent tell if a client with whom she has dealt entirely on line is for real? What comes up when you do a Google search on yourself? On the company? On a client?

In every area, at every level of our company, every associate faces the question of how to be PROactive rather than REactive. In selling, in marketing, in managing, and in leading, each new internet or media advance creates more rather than fewer opportunities, more rather than fewer possible outcomes, more rather than fewer possible solutions. Needs and options swarm around us in greater numbers than ever before. So we all need to be better, more efficient decision makers. And to do that, we need to know what is important. Only by analyzing and understanding our priorities in the marketplace and mapping a path to achieve them can we succeed amidst the shifting demands of those we serve and the never ending buzz of the information superhighway.

You can read more on www.warburgrealty.com/blog.

Courtesy of Frederick Peters, President of Warburg Realty

My friend Jeff Appel, as smart a mortgage banker as you are likely to meet, has been talking a lot lately about Dodd Frank and how it is remaking the mortgage business. This legislation, intended to save us from future financial meltdowns, is likely in the meantime to cause a meltdown of its own. In addition to imposing onerous regulation which render mortgage brokerage increasingly challenging, it also creates such severe consequences for failure to adhere to its literally thousands of points that even the most sanguine of mortgage originators are now trimming their sails (and sales!)

Why is it that, as the pendulum swings between extremes of behavior, the legislative cure is often worse than the disease? First the free-for-all: the Glass Steagall Act is repealed, taking down the Chinese wall between commercial banks and investment banks, the SEC takes a LONG nap, and in the meantime the Gordon Gekko ethic seemingly sweeps every corner of the finance, lending, rating, and real estate development industries. Then everything goes kaflooey because greed perhaps wasn’t so good after all. So now, instead of actually attempting to enforce the laws which are already on the books, Congress creates a whole set of new ones, no doubt vastly more complex than most of them even grasp, to save us from ourselves.

Don’t get me wrong: it seems pretty clear that we needed some saving. Our unfettered getting and spending DID lay waste our powers (with apologies to Wordsworth.) But now we have erected substantial barriers to the very recovery we are longing for. How is the national housing market to bounce back when getting a loan is so very difficult, and the secondary mortgage market so constrained in the loans it can buy? How are small businesses, the oft vaunted engine of our past recoveries, to expand and hire if their two main sources of cash – small business loans and home equity loans – are unavailable to them? An article in this week’s New York Times described the plight of one small entrepreneur after another whose ideas and companies are starving due to the unavailability of cash. Dodd Frank, well intentioned though it may be, is choking the feed tube for recovery.

I wait in vain for honest political discourse on this topic and a host of others. Why did the legislators who approved TARP pretend that money was going to be lent out when they knew banks were going to use it to stabilize their own balance sheets? Banking and commerce may have been unpopular in the wake of the financial meltdown, but they are necessary if the country is to function. But instead legislators got on the populist treadmill and were shocked, shocked, to discover that these funds hadn’t gone to ease the pain of the 99% (with apologies to “Casablanca.”) So we get hugely complex and probably unenforceable legislation to hyper-regulate what we allowed to go almost completely unregulated during the years when It looked like the “new economy” would make everyone a real estate millionaire.

The crisis in the global economy is deep and complex and there is no quick fix, legislative or otherwise. Unfunded government and pension liabilities alone could sink many of the economies of Western countries, not to mention some of our states. Entrepreneurship, and a rebound in housing, still have the potential to ameliorate if not cure these ills. So for God’s sake let’s get out of their way!

You can read more on www.warburgrealty.com/blog.

Courtesy of Frederick Peters, President of Warburg Realty

I had numerous phone conversations today with Warburg agents who are negotiating multi-million dollar deals (and a couple of multi-multi-million dollar deals.) In contemplating the strategies we discussed, I was struck by the uniqueness of the environment in which we New York City real estate agents are privileged to live. Three years after the nadir of the real estate crash and its attendant financial collapse, our high-end co-op market is healthy and vibrant, with multiple expressions of interest for many ultra expensive properties. And I am talking the co-op market, which by definition does not include foreign buyers. So this is (for the most part) home grown money.

Who are these buyers, and why are they acting this way? Let’s address part one of the question first, and let’s answer it backwards. Here’s who they are NOT: men and women with jobs at the big Wall Street firms. With bonus sizes plunging from last year, and cash compensation a negligible part of the bonuses, even the Wall Street hotshots are not getting paid anything resembling the fabulous sums which drove the markets in 2005, 2006, and 2007. We still see some private equity guys. And there is definitely a strong contingent of hedge funders - either the smart ones or the lucky ones, as so many of their brethren have gone out of business. We see some global manufacturers. We see real estate investors, and REIT owners. Actually, today’s high end buyers run the gamut of professions, EXCEPT that not so many of them work for large Wall Street firms.

As to why this market is so vibrant, I think there are several answers. First, good property is scarce. There is little new condominium inventory, and there are never too many large co-op apartments on the market. With local capital gains taxes at 27%, older people would often rather redecorate than move. So demand tends to exceed supply. Second, the local high end real estate market has recovered much if not all of its value over the past few years, bolstered in substantial part by the international money boosting condo sales. It looks increasingly attractive to home buyers exasperated by the unpredictable rapid cycling of the stock and bond markets. Real estate is, in the truest sense of the word, concrete.

And finally there is the sense of new beginning which always accompanies the purchase of a new home. As the economy slowly improves, those who can afford the luxury of change want to embody the return of (guarded) optimism with an investment in the future. New real estate always represents the possibility of new beginnings, of a clean slate. And who isn’t excited by that?

You can read more on www.warburgrealty.com/blog.

Courtesy of Frederick Peters, President of Warburg Realty

Life is a negotiation. Whether it is with our partner, our children, our extended families, or our co-workers, we are engaged in the give and take of negotiation every day. But the degree to which our personalities and engagement styles inform HOW we negotiate is something we rarely consider. Take me, for example. I have a big personality and a lot of opinions, but at heart I am much more bark than bite. I want everyone to be happy. I want consensus. So I have to be on guard all the time in my business life lest this desire to make people happy compel me to give away too much too soon.

Over the years I have both observed and participated in thousands of sales and rental negotiations. Here are a few things that I have learned about how personality shapes negotiation:

· You must figure out your own style and learn both how to use it and how to control it. For me, that has meant harnessing my enthusiasm in order to generate excitement and good will while at the same time knowing that much of the time I just need to shut up.

· In the same way, you have to be aware of the negotiating style of your customer or client (or broker, or partner, or boss, or mother). The CEO, who is always in a hurry and views every decision from 30,000 feet, needs accurate facts and an overview NOW. He will make a quick decision if you are on hand with what he needs. The CFO, on the other hand, may need to come back and measure everything a few times and will be extremely deliberate. He probably will NOT make a quick decision. And the scorched earth negotiator needs to be met, calmly, with the countervailing facts.

· Silence is golden. Biting your tongue will both stop you from giving too much away and at the same time create an environment in which your counterpart, for the same reason, may be tempted to over-speak. One cardinal rule of negotiation is that less is more when it comes to talking.

· If your clients or customers are a couple, watch THEIR interaction carefully. It will be up to you to understand how they make decisions, and it is rarely as straightforward as it appears at first. The talky one with the big opinions (in my marriage, ME!) is not necessarily the one whose desires will carry the day. Once again, silence is golden. If you stay quiet and observe, you can develop a perception of their negotiating style as a couple which will help you sort their priorities and make the right deal.

· It is NEVER strategic to lose your cool. Your frustration is your problem. Buyers and sellers can easily become emotionally involved in the transaction, so as agents it is our job not to let those emotions hijack the interaction. The best decisions are always made by cool heads. Maintaining a friendly professional demeanor will create good will no matter what your part in the deal. Having a tantrum will do the opposite. It is always your choice.

Managing a negotiation never involves just the price, the closing date, the terms. Managing a negotiation involves addressing all the subtle ways in which each participant either helps or hinders the issues and personalities to coalesce into a successful transaction. And the more conscious we all are of the psychological and stylistic issues which shape our responses, the more effective we are likely to be.

You can read more on www.warburgrealty.com/blog.