The art of negotiating: Compromise is key to success - by Heidi Burkhart

As the founder and president of an affordable housing brokerage in New York City, my business revolves around negotiations. As pretty much anyone can attest, negotiations are not easy, particularly in business. In closing over 11,000 units of affordable housing, I have dealt with every aspect of negotiation – from negotiating the sale to negotiating with city and state agencies. I’ve also had to manage negotiations in which there are curve balls, like environmental issues. From my experience, I’ve found that the key to a successful negotiation, despite any curve balls, is compromise. Although it may be near impossible, it is imperative to find a win-win solution for all parties involved.

Having mediated as many transactions as I have, I’ve found that the only way to successfully close a deal is to keep everyone at the table on track and focused on the negotiation at hand. This means that all parties need to stay clear and unbiased, and not berate each other or take a position of reclusion or pity. When all sides are focused and willing to leave something on the table, each party will come away successful. 

Throughout my career, I’ve found that brokers do not receive the same respect that many other origination fields in real estate do. With that said, I’m not arguing the necessity of originators – you absolutely need them to procure opportunities and in turn successfully close transactions to make your returns. However, great brokers really can become the “secret weapon” for funds, investors and companies. Great brokers have not only mastered the art of negotiating, but they do so while building and maintaining relationships that will be beneficial over the long term.

Within the current model, brokers are negotiating on many levels during the course of a deal’s life—from origination to closing. Many of the transactions I work on take well over five years to complete, which is par for the course in affordable housing brokerage. However, when working with fair parties who are willing to negotiate, deals tend to close more quickly. The deal that I like to use as an example is an 88-unit town home project-based Section 8 deal in Tennessee. It took approximately two years from the canvas call to originate a potential opportunity to secure a successful closing. Although this was one of the less contentious deals I have worked on, it still included twenty-one points of contact of negotiation for the deal to close. 

Alternatively, several deals that I currently have in contract and others that I have closed took well over seven years to come to fruition. The number of negotiations a broker will handle throughout one deal is remarkable. Once mastered, this process becomes an art, particularly if the goal is truly about achieving a win-win arrangement for all.

As a broker, when you’re passionate about a deal and respectful of the relationships of all parties involved, you will be successful. A truly good negotiation will lead to a win-win arrangement in which your relationships will become more solid than they were before. By maintaining and building stronger relationships, you will see more deals come to you in the future. I firmly believe the best way to find more opportunities is to maintain and nurture a solid client base —it is not always about hunting for something new. In brokerage, we win some, we lose some; however, with the right relationships, the wins will always come out on top.

Heidi Burkhart is the president of Dane Real Estate, New York, N.Y.