Never Split the Difference: Negotiating as if Your Life Depended on It

The broker then told him that he had been in the market
for more than fifteen years, so he was well informed. At this
point, my student pivoted to calibrated “How” and
“What” questions in order to gather information and judge
the broker’s skills.
“Great,” my student said. “First and foremost, how has
Charleston been affected by the economic downturn?”
The broker replied with a detailed answer, citing specific
examples of market improvement. In the process, he
showed my student that he was very knowledgeable.
“It sounds like I’m in good hands!” he said, using a
label to build empathy. “Next question: What sort of cap
rate can be expected in this type of building?”
Through the ensuing back-and-forth, my student learned
that owners could expect rates of 6 to 7 percent because
buildings like this were popular with students at the local
university, a growing school where 60 percent of the student
body lived off campus.
He also learned that it would be prohibitively expensive
—if not physically impossible—to buy land nearby and
build a similar building. In the last five years no one had
built on the street because of historic preservation rules.
Even if they could buy land, the broker said a similar
building would cost $2.5 million just in construction.
“The building is in great shape, especially compared to
the other options available to students,” the broker said.
“It seems like this building functions more as a glorified
dormitory than a classic multifamily building,” my student