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The Real Estate Client

II. The Structure Of The Deal

"Deals That Work Every Time"

James Patton, CRS

     The model deal or "arrangement" is simple in construction. Like good writing, it is usually difficult to achieve. Building the model deal is like two or more authors putting together a tight story. Authors and negotiators ideally follow sound composition rules, with negotiators focusing on a different sub-category. Writing is to negotiating what publishing is to deal formation and the handshake. We can view the negotiated deal through a number of lenses, such as those which are "simple," "right," "good," or "ideal."

     Sound negotiating principles are eternal, as those in the red list below. They are universal to the extent they are "culture-free." They are tied to the way we think and the way thinking operates (and varies) "on the ground" and in the "real" world between people and peoples. Different cultures may handle the mechanics of negotiations differently, but the ideals of each will be found in our list. Individual temperament and approach play crucial roles in how negotiations are conducted and whether or not they are successful. Courage and discretion in the personal makeup of the negotiators is of paramount importance. Because the negotiation process is blind to the morality of the result, ethics are essential to truly good deal construction

The ideal deal will generally be:

     Visualizing the structure illuminates both the process and its ability to produce an outcome. A "simple deal" is mechanical. An "ideal deal" is simple and whole. A "right deal" has fit of goal and result. A "complex deal" has a burden of parts. A "good deal" relates investment and return. In a straightforward manner, all these deals when achieving the target goal do so without judgement or a moral implication of "right" or "wrong" (although unethical or immoral behavior or result can forestall the goal or render it incorrect to have achieved). As "guns don't shoot people, people do," negotiations are neutral and their outcomes depend on the users.

     Aspects of "complex" or non-simple arrangements may get in the way (see characteristics of 'the hopeless deal' in blue below). Complex deals can, of course, close and sometimes (e.g. in nuclear disarmament or Middle East negotiations) there is no other way to reach or even attempt the goal. However, even then, a workable complex contains tightly connected subdivisions which are, in and of themselves, made to be simple (think of an internal combustion engine). The trick, as complexity increases, is to have mutually reinforcing parts.

Expanding on the above list, the structure leading to an ideal negotiated settlement will be:

1. Simple (Complex): Less goes wrong with fewer moving parts.

2. Clear (Vague): Method and intended result obvious to all parties.

3. Specific (General): Confusion avoided by focus, & precision in meaning & intent.

4. Focused (Diffused): A single situation is addressed.

5. Bounded Bounded (Boundless): Tangents avoided by self-imposed limitations.

6. Consistent (Inconsistent): Parts fit well & self-running & mutually reinforcing.

7. Measurable (Unmeasurable): Progress can be monitored (usually by both sides).

8. Realistic (Unrealistic): Achievable and makes sense on its face or examination.

     Thinking a deal needs complexity is itself a danger in negotiating and deal making. A danger in complex deals is collapse through sheer weight. There may be an element of discontent too many, or gears may not mesh or turn. The complex deal is usually put together with less skill and effort than a simple one for the same goal (beware of pseudo-negotiating). Simple deals, when they are "right deals," lead to satisfaction. Complex deals, even when "right deals," often don’t close or are hard to close. Sometimes, when they do "work," they are the "Was it worth it?" deals.

     The attainment of the simple deal is an elegant chase in a class of world proportions. It is the heart of the "ideal" deal. Getting to it is uncommon and deceptively elusive. We confuse "simple" and "easy" at our peril. As in life generally, the easy way out is an exit to miscalculation, the haphazard, and complexity. Real success is rare enough with planned arrangements worked according to a goal. We keep success in our court by embracing simplicity and the above principles in all our negotiations.

Call Today To Get The Process Started

©2003 Coco Isle Realty

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