Price Is One Term

A negotiation about price alone is a straight line: every dollar one side gains, the other loses. Most real deals have more dimensions than that. When I look back through the ones I have done, the moves that mattered most were rarely the number.

Lease or buy

In December 2012 I was looking for office space in Naples. The owner proposed a lease: a rate per square foot, annual increases of 3%, a five-to-seven-year term, an allowance for improvements. I did not argue about the rate. I changed the question:

Leasing is looking very difficult at those rates and terms. Can you be aggressive on the purchase option?

Nine days later there was a draft sale contract on my desk, and the business went on to operate from that building as owner rather than tenant. The negotiation that followed was about a purchase, not about shaving a dollar off a lease.

The credit at closing

In 2013, buying another property, the contract gave me a credit at closing equal to three months of the association fees. Small terms like that are easy to win and easy to lose: the closing statement does not always reflect what the contract says. When the bills arrived I wrote to the title company:

I was to get 3 months worth of credit on my closing equal to three months of regular assessments per the clause below. Can you please advise if that was processed?

It had been, and the title company pointed me to the line. But the only reason I knew to look was that I had negotiated the term in the first place.

Five terms in one email

In June 2022, buying two residences in a development in Bangkok, I sent the developer a list after a call. Only one item was about the headline price, and even that was framed as a trade, a higher floor at a lower floor’s price:

Would you be willing to offer Floor 42 at the price of Floor 38? If so, I am interested in moving forward.

The rest were terms. The same instalment schedule offered to other buyers: “I would want to be treated equally to others.” A standard penalty if construction ran late. An exit if a redesign proved too expensive: “What occurs if the redesign fee/construction cost is too high and I need to revert the transaction?” A designer coordinating with theirs. And, since I am a realtor in the US, a referral fee on my own purchase, deducted from the price.

The purchase was signed that August. I will not claim every request was granted. The point is that the conversation was about five things, and a developer can say yes to some of them more easily than to a straight discount.

The term I asked about too late

The counter-example is mine as well. In 2023 I bought a presale condominium in Mexico. In February 2024 the agent wrote to buyers that parts of the project were delayed waiting for permits. I asked what the penalty was for late delivery. The answer was that if the delay passed a grace period, the buyer could terminate and receive the money back plus a fixed compensation. My reply:

That’s not protection. You could now take 10 years to build this and our money could be tied up unless we want the unappreciated funds back, which is not how real estate deals are done. There is no incentive for you folks to finish on time. None.

All of that was true, and none of it mattered by then. The time to negotiate a delay penalty is before you sign, when the developer wants your deposit. After signing, you are asking for a favour.

Where the value usually is

Looking across these and the other negotiations on this site, the terms that carried the most weight were:

• Structure: lease or buy, cash or financed, lump sum or instalments. See the seller-financing offer in When the Deal Gets Large.
• Exit: the right and the cost of leaving. See The Clause About Leaving.
• Time: an option period before committing, as in The 90 Days I Asked For, or a penalty if the other side is late.
• Equal treatment: the same terms everyone else gets.
• Credits and offsets: fees, assessments, referral payments, the small numbers that add up.

Price still matters. It is just one term among several, and usually not the one with the most room in it.

Mapping the terms before the first conversation is the preparation behind the negotiation work I take on.