Effective Negotiation Tactics from Top Commercial Brokers Justin Fenn and Dan Yozwiak

Hello, my friend, and welcome to another exciting episode of Negotiate Anything. Thanks for joining us today. With over 10 million downloads and listeners from more than 180 different countries, it's dedicated listeners just like you who have made Negotiate Anything the number one negotiation podcast in the world. I'm your host, Kwame Christian. I'm a business lawyer, mediator, author, and the proud CEO of of the American Negotiation Institute. Now, before we get into today's insightful conversation, I have a golden opportunity for those of you who recognize the power of negotiation in your professional lives. Have you ever found yourself wishing that you could navigate those high stakes conversations with more confidence? Or perhaps you're looking to empower your team with the art of persuasion and conflict resolution? At the American Negotiation Institute, we've crafted specialized keynotes and workshops tailored for those very needs. We've transformed the negotiation skills of professionals worldwide and we're eager to do the same for you. We believe the best things in life are on the other side of difficult conversations. And our goal is to help you improve your lives and the lives of those around you one difficult conversation at a time. Don't let another challenging conversation leave you second guessing. Click the link in the description to discover how we can help you find confidence in conflict, negotiate better deals, and have stronger relationships. Because in the world of business, every conversation counts. And now, without further ado, let's jump into the interview.

So, Justin, how would you tell us a little bit about yourself and how you got into this business?

Sure. So, Dan, I are commercial brokers from Marcus and Millichap. I got into real estate pretty early on because my dad actually is a broker. Small town I'm from and you know, seeing residential real estate and talking about real estate deals at the dinner table every week, you know, it was something that I knew I always had an interest in. And I got my residential license, become a realtor when I was about 20, just about to turn 21. And I enjoyed it. But I also was intrigued by the complex nature of commercial. And one of the things I love about commercial is you can add so much more value to the client, whether it be underwriting the financials, understanding the bigger picture of what they're trying to do with their investments. And so after law school, I worked for data firm for a few years and ultimately joined Marcus and Millichev. And I've been there for over four years now.

Very nice. And what about you, Dan?

I always knew since I was little I was always involved with real estate. And I always knew it was something I'd want to get into one of my family friends, flipped houses, and he was one of my babysitters growing up. And I just have always been around it. I flipped a house when I was in high school, and then I went to Ohio State. Graduated with a degree in urban analysis and real estate and a minor in entrepreneurship. And my first job right out of college was with a local developer here in Columbus. And this was right when the market was crashing. So I started off leasing one of their developments and send. The market crashed. They had no more developments to build, so my job was no longer needed. So my boss hooked me up with one of his old college friends who worked in Marcus and Millichap, and I got into the commercial brokerage business. And there's no better time to learn at the absolute bottom of the market. And since I didn't know any better, I just thought it was a perfect fit. I love the 100% commission aspect of it. I love the harder that you work, the more money you can make. So it just seemed like a perfect fit. And I've been doing this now for about eight and a half years now here at Marcus and Millichop.

Nice. And I still can't get over the fact that your first flip was in high school. How did you even manage to do that?

Well, it's just something I've always had my eye on. And it was the perfect summer job right before going into college. And we didn't make the amount of profit that we wanted to. We came out about even. We actually had to rent the property for about a year. But it was such a good learning experience. I now own five other residential properties right now with one of my best friends. So it's something that I still do on the side. And that first project was a great learning experience.

Nice. And how long have you two been working together?

Pretty much since I came on board. I mean, you know, we've had maybe a couple other partners here, there, you know, or agents that were on the team. But, you know, I think for Dan, I. We seem to be so complimentary to each other. You know, we kind of always seem to be thinking on the same plane, but yet we have different ideas as far as analytical approach also, you know, having somebody that can say, okay, do we feel like this is the right project for us? And also, a lot of times, I feel like we're so driven by what's the best thing for the client. Would this be something where the client could really benefit from this deal? Because usually the thing that gives you true fulfillment In a job like this is knowing that you're making such a difference for whoever you're representing. You know, yeah, it's great to make money, but ultimately we have opportunity to completely change somebody's financial future. And that's the reason why I can't wait to get to work every day. And obviously very fortunate to do that.

That's awesome. And so when it came to working together, was it immediately apparent that you would be kind of the dynamic duo, or did it take a little bit of time to feel each other out?

Well, I just think it takes a little while in this line of work to feel out if you're going to be successful or not. It's a pretty tough business to get into right at the beginning. I mean, you're coming into a job where you're calling on people who've been in the business 30, 40, 50 years, or the property's been in their family their whole lives. It's their sole source of income. So as a new agent, it's really hard to get a handle on things. So that's why it's really important to pair up with someone who's been here a while. And when Justin and I paired up together, it really was a perfect fit right off the bat. We are very complementary to each other. Justin's very analytical. He likes to really think things through, and we complement each other well. And I always think it has just worked out right from the beginning.

That's awesome. So if you were able to highlight three things that you would say are like the hallmarks of a good team, based on your experience, what would it be?

For sure, trust is the number one thing. You have to be able to believe that that person is going to go to the mat for you. And also that, you know, a business like this where a deal may come forward and maybe the other partners don't know about it, there also has to be loyalty, you know, because, yeah, you could trust that the other person is going to do a good job, but.

What about if you're just looking for.

How it can only benefit you, you know? So I would say those two, and then, Dan, anything in your particular stand out to you?

I would say probably the most important thing is to have open communication, to have a goal that both of you see that you work towards every day. If, you know, somebody wants to make a million dollars, and that's all they're focused on, while the other partner is focused on solely what the client wants. And yes, money is nice, but money is not the main motivator you could have a disruption in your partnership on how you handle things. So I think it's extremely important to align yourself, a teammate, who you guys have the end goal in mind, where, you know, just. And I pride ourselves on, really focus on what's best for the client. And once you do that, everything else takes care of itself on its own.

That makes a lot of sense. And that conversation about goals, like professional goals, and then your focus within the day to day, how you approach these different situations, were those explicit conversations you had or did it just kind of become apparent as you started to work together?

I would say a little bit of both. Right up from the onset, when Justin and I were talking, hey, let's team up. You know, we set out a guideline. I set out, hey, this is how I run my business. This is what I expect in a partner.

And it really fit well with what.

Justin was looking for as a teammate as well. So right off the bat, we knew it would be a good fit. But then, as you know, partnerships are ever evolving, and with the amount of deals we get thrown, the different situations that come up, these conversations are ongoing every day.

Yeah, I mean, I think one of the biggest things is that you have to have guidelines and goals that are not only something that you can define, but they also have to be measurable. So, you know, like, I remember when Dan and I first teamed up, we said, we're going to make this number of calls each week. We're going to have this number of meetings. We're going to try to get this many listings. And what are the percentage probability that we're going to convert this many listings to closing? So if you think you have to get three listings to get one closing, say you got back it all out to realize where your true numbers are.

Lying at, and then how much are.

You going to net from each one of those deals, too? And I think one of the biggest things is that Dan and I always know he has my back. I could call him any hour of the day, and he's going to try to work on whatever it is. And also just, it's nice if you want to go on vacation or, you know, if you have a baby on the way, something like that. Yeah, you have somebody who can take care of things and be dialed in on the deal. Well, say, even if you're just, you know, sick for a day or two.

And I think to add to what Justin says, especially about the ratios part and early on when we were setting standards, you know, you got to make a certain amount of Cold calls a week to be successful. It's just plain and simple. It's a numbers game. And I would constantly be on Justin, hey, Justin, you got to get your calls up, you got to get your calls out. And he wasn't exactly seeing the correlation.

Between cold calls and proposals.

But as we continued to build our team, we took care of the back office, where we can handle a lot of the busy work. Justin's been on the phone more than he ever has, and his business has skyrocketed, really, since he's taken that approach.

And one thing Dan's talking about is just like in any business, some of.

The biggest challenges are when you try.

To scale significantly from whatever space you initially started at or even the first year or two. So, long story short, our cost of putting together a proposal and taking a listing went down as we were able to spread across more and more deals and get more and more support staff. So I think once that happened, all the numbers started to make more sense. So rather than stressing over one $2 million deal or $3 million deal, you now have the ability to cast a wider net and take on more and more deals.

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That makes sense. And there's a lot of good stuff you all said. And I want to backtrack a little bit to what you both said about goals, because I think sometimes people make these goals and they make goals with their partners. And you see this in marriage all the time. You know, you make these goals, oh, let's have kids. And then you never talk about when you know or how many you know. Talking about the objective, the measurable data is huge. Because if you just say, my goal is to be rich, and then you say, my goal is to be rich, rich means different things for different people. So I think it was really smart that you all took the time to really come up with objective measures that you could actually quantify your goals.

And that's One of the things that really helps separate Marcus and Millichap from our competitors. There's been so many successful agents here. There's a platform and there's a way of success. We don't need to recreate the wheel. We know that if you make 250 cold calls a week, you're going to get eight proposals a month, and that's going to lead to two listings a month. And, you know, that's why it's extremely important, as you said, that really define these measurables. So really it holds you accountable, you can hold your teammate accountable. And more importantly, we know that these ratios are proven to help allow someone to be a successful real estate agent.

And one of the things that stood out to me was when I joined the company, my main focus was office and some retail. Dan's background was in single tenant, net lease, so drugstores, discount stores, things like that. So the question is, how do I marry? Our different product types are working in with the fact that we have incredible symmetry and synergy when working together. And so like any business, if you had the ability to anticipate where things were heading and where there was an underserved area and where you could provide the most value to clients, you would have a tremendous advantage over the guys who aren't thinking that way. And so we just saw that his knowledge and power in single tenant and my knowledge of office would lead to me doing what I do now, which is a lot of the government or GSA product, which many of which is single tenant office. And we also do my multi tenant as well, because we have that background. And for Dan, he's built this infrastructure with drug stores and discount stores where we're able to service those clients and I think provide way more service, intelligence and comps and data that nobody else has.

Wow. I love it. I love it. And Dan, one thing you said earlier was that there was a time when Justin wasn't making as many calls as you would have liked, but you had that conversation. And I'm assuming there are other times in your relationship where there were disagreements, but it seems as though you've been able to work together and communicate well to get over that. So what are some of your keys to success when it comes to resolving disputes within the team?

It's very important for any teammate and it especially works well within our partnership is Justin and I are not afraid to have honest conversations. And I'm not going to yell at Justin, I'm not going to get mad at him.

We just lay it out.

Justin we're not making enough numbers here. Neither of us are doing what we need to do to be successful. How can we change it? And then once I say it, but I don't beat it to death, you say out there. And then I let Justin kind of go back. Justin likes to do things. He likes to figure it out. You know, is his way gonna work or should I do it this way? And then a lot of times, I mean, Justin's extremely smart guy. A lot of times his way is the right way. And then he tells me that. So we have a real open relationship where we can handle not just constructive criticism, but more just advice. Because we both have different backgrounds, we've seen things. I've handled transactions this way, he's handled it this way. So it really helps to have a diverse environment and a background to help each other.

And one of the things that stood out the most to me was, I think it's funny, like what most of your listeners are probably trying to get out of these podcasts are, how can I build my business and better engineer my negotiations, whether I'm an attorney, whether I'm a small business owner, whether I'm venture capital. The real takeaway is that we can't be arguing over whose idea won. It's very similar to. You had Jim Trestle on recently, and Trestle was talking about how when they go into game plan for the next contest, they can't get caught up with, hey, whose idea won last week, or, you know, you wanted to come up with more of a run balance game. But we think against this defense, we're going to have to pass more. You can't then be sour grapes and be resistant to going all in on whatever plan everybody ultimately agrees to. And, you know, the other one I listened to recently stood out to me was with the former head of the FBI interrogation unit, who then is a professor at Harvard. He was talking about how it's so much more effective to let people arrive at their own conclusion rather than just directly be into their head. So, you know, a while back, Dan and I were debating about whether or not to take this listing, and I was all gung ho by it. Dan was kind of reserved. And we end up with the conclusion that if you're going to take it, it better be one that we can get at the right number with the proper fee, and we can be able to turn it into other listings and properly serve that client. We don't want to take a listing that we can't do every possible to maximize the value and so, you know, I kind of thought about it for a little bit and then we came back and it ended up being the best conclusion because not only did we get the listing that I really wanted, we had done the way that ultimately was the best. It happened to be the way that Dan decided. I don't care whose idea it was. I just care that we're on the same page as the best for us and best for the client.

I love this because you all are essentially interviewing yourself. These points you're making are so great that I can just sit back and just listen. This is really cool. And Dan, I want to go back to one of the things you said when it comes to dealing with these conversations, because it mirrors what Justin just said. You ask questions and you listen and you take the time to show you appreciate the person by giving them time to talk. And so in the example you gave Dan, you said, you gave advice, you said, this is the problem that I'm seeing. And then the question was, brilliant. How can we be more successful? Open ended gives Justin the time to process it. And earlier you said that Justin's really analytical. So you said, essentially you said to yourself, I trust in Justin as a partner and I trust in his business intelligence. He's going to figure it out. I don't need to micromanage him. And I'm assuming you probably appreciated that approach, Justin.

That's exactly the approach I took. And it's part of our training here at Marcus and Millichap. I mean, number one, we learn to ask open ended questions. And just like one of your other podcasts, don't be afraid of silence. That's a key thing we do every day, especially when we're in negotiations, when we're on a cold call, you got to get the client talking, you got to get the other person talking. And that really let them come to the conclusion. And then it works out best for everyone.

Because, you know, one of the things that we always have to keep in mind is that we don't convince anyone to sell, nor do we convince anyone to buy. We present all the information and say, look, given the timing in the market, given when this lease is going to be up, given where the market is heading with interest rates with this product type, with this tenant, Mr. And Mrs. Seller, or it may be private equity, it may be institutional, it may be a reit, whatever the focus is, whatever that type of audience is, we let them understand that today is the best time for you sell. And oftentimes it's not.

And that's what we're going to tell.

Them in that scenario as well. So it's all about being client focused. You take care of the client, the client will always take care of you.

I love it. And this segues really great into talking about some negotiation techniques because. And for the audience, the reason, actually Justin and I, we met before at a friend's birthday party. But we reconnected because Justin reached out to me to help a client on a deal. And so I got to see their negotiation style firsthand and that's how they ended up here on the show. And so I think it would be great if you all could just break down some of your favorite negotiation techniques and tips that you use in building this successful commercial real estate business.

One of the most important negotiations we have, and this goes before we try to sell a property, it's with the client when we're discussing our commission. And that's the first negotiation where the client gets to see who they're hiring. So you really set the standard of what you're going to be like when you're out there working for your client. So one of our favorite things, we go through our evaluation, you get to the net proceeds page. Hey, Dan and Dustin, what's the commission? I say 6% or you know, depending.

On whatever type of product is, but.

Usually for our standard it's 6%. Then I shut up, first one to talk loses. Then you know, if I say it's 6%, but if I find the buyer, I'll do it for 5%.

Or the more you talk there, all.

You'Re going to do is end up lowering your commission. That's the first standard right there. So that's one of the most important negotiation tactics is say what you need to and don't over talk because the more you talk, the more stuff can come out that you didn't mean to say.

That's so smart. And you hit the nail on the head because people often just, they end up negotiating against themselves because we just think about the worst possible things that could be going through that person's head. And sometimes they might just be thinking, oh, that's a really good price or something like that. But we jump in too early. And so when you give the commission, when you say the number on the commission, is it kind of like an assumptive close where it's like. And the Commission will be 6% and you slide the paper over or do you give them a chance to respond, kind of anticipating a back and forth or question?

Usually if we feel that these people are ready to sell, our clients are ready to sell and the valuation went well. I always go for an assumptive close and then try to get the listing and move right on to getting the rep agreement out. If we don't know how it's really going, I'll say our number, be quiet and then definitely give the client a chance to respond and see how we need to ultimately get to the number and the net proceeds that it makes sense for the client to achieve their goals.

And this is also why it's so important to get in front of the client. You know, whether you're dealing with some kind of partnership negotiation or you're actually dealing with someone who is buying your product or whatever the case may be, you want to be face to face. You can see the reaction when you present that item.

When you slide that offer or that.

Proposal package across the table. You want to be able to see their eyes light up when they see what kind of price you think you can get for them and what kind of fact is grounded in. And you know, every once in a while you will run into a situation where they're concerned about the timeline, they're concerned about the price, there's some aspect of the deal and you can tell that there's some kind of objection you have to overcome. And we always say never give something up without getting something back in return. So, you know, oftentimes clients and sometimes agents fall in this trap as well. They think of it just like you're going to throw out six and I'm.

Going to throw out five and you're.

Just going to cave and take five. And like Dan said, not only are you auditioning there, but you have to have a bigger view of how the deal is going to come together. And look range, you're not just talking about how you're going to take this listing, you're going to talk about how you're going to close this deal and get your client paid. So if it's something we negotiate the price, give me a longer term to market the property. If it's something about the way that the property is going to be marketed, something about the price you need to be able. If I'm going to give you something, you need to work with me and also help facilitate the deal.

We use this tactic a lot in every step of the way. So whether it's, you know, the client, we say the property's worth 3 million, they want us to try to sell it for 3.2 million. We think there's no okay, we'll try it for 30 days, but if we don't get it, we're going to need to course correct within 30 days and.

Get a price reduction or say we're.

Under contract with somebody and you know they're financing, they need an extra 10 more days. You know, the appraisal didn't come in in time.

Guys.

Can we extend the financing contingency 10 days? Yes, but we're going to need you to put down an additional $50,000 non refundable to get your extension. That's something our manager really harps on. It's always get something in return when you're giving up something.

And for people who maybe don't work in the real estate or transactional space, when Dan's talking about non refunding, that means that that money goes hard. If the buyer decides to walk from the deal after you've granted them this 14 day grace period, that 20 grand or 50 grand or 100 grand goes hard.

And when you say goes hard, elaborate on that term too.

Sure.

So it's going to go into escrow and then if the buyer decides to not go through with the deal, the money will then be released to the seller as a breakage fee or what you might refer to as a liquidated damage.

Gotcha. That makes sense. And again, this is so good. I want to go back a few minutes because I realized I introduced the term and I didn't explain it when I talked about the assumptive close. For the listeners that don't know, that's when you put down an offer and then you act as if we're assuming that you accepted it. So a classic example is if somebody's trying to get you on a sales call and they say, hi, are you interested in this product? You know, maybe. Well, how about Thursday at 3pm and so you didn't ask if you wanted to do a call, you kind of just assumed that they would and then moved on to the closing date. So that's what we meant by assumptive close. And another thing you said, Dan, that was really good was the fact that when you're giving these numbers, you're always doing this in person. I was just talking to one of my friends this morning actually, and she was saying that sometimes when she gives numbers via email, people just ghost her. They don't respond ever again. But if you give these numbers in person, you have the opportunity to read their responses. Are they going to accept it? Is there a little bit of hesitation? And now you're in a position where you can answer those questions. So if you can't get them in person, at least get them on the phone so you can have that negotiation.

That's what we really stress whenever we're going through an evaluation. If it's someone who's on the other side of the country or if we can't be there, we email them our evaluation the day of. Right when we're getting ready to talk. So they're looking at it with fresh eyes with us. So it's not yet, hey, the $3.2 million, that's a purchase price. But we want to show you how we got there. That's the most important part. So if you just give the numbers without any backing, you don't get to tell any of your story. You don't get to go through the comparables, you don't get to explain what you're seeing in the market. You don't get to show any of your market knowledge on how you built the pricing evaluation. It's just a number on the page and if they like it, good, and if not, you know they're not going to do business with you. So it is extremely important to get in person or get on the phone and really be able to tell the story and really build your case on why you're pricing a property a certain way.

Right. And in your industry, I would say, and I'm not familiar with this, you can correct me if I'm wrong here, but it's almost an audition for your skills. If some, if you say 6% as your commission and somebody says 3 and you say 3, really, how can they have much confidence in your ability as a professional to negotiate on their behalf?

Exactly. And if I'm going to say 6% and my competitors charging 3, I'm going to tell you why I'm worth the 6%. I'm going to show you. Hey, we've been known to close deals at list or above list price, or if you go with us, we're going to close your property within 60 days. We're able to generate 10 offers. Here's our marketing process. Here's the value that you're getting for the commission we're charging.

So it's always important to be able.

To explain yourself to your client like that.

And not only that, so often we're able to take what other brokers have done for them in the past if they've already attempted to sell the deal before, and show them specific examples of where that marketing process has underserved them. We worked on one recently where the seller had been trying to sell this property, but it had no reference to the fact that it had a gsa, a government value lease, a double A plus stared in poor's rated lease. And it had no reference to another great tenant that was there. It had no reference to the amount of traffic that they had nearby. All these things that would help buyers all across the country flock to this asset. And so it was something that we had to highlight to the seller. This is the type of stuff that we're going to change about the marketing process. And also sometimes you run into both agents and sellers. They have a small time, small town mindset. You know, one thing I love about Dan is he is so optimistic. He's always looking at the big picture. So so many of the deals we've done. This is part of why I like the Marcus Mill chat platform. We're bringing buyers and sellers from all across the country. And on our system they're able to sell any product to any other client from. It doesn't matter. They could be placement in a completely other part of the world. And we've got agents in all our offices collaborating, working with these.

That's crazy. That's so cool. And I think one of the coolest things about hearing both of you just in tandem, working together, you're almost to the point where you could finish each other's sentences. You know, just the. Just hearing you two interact, you're so on the same page. It's. It's blowing me away. But I know we're coming up to time and I, I want to be respectful of the listeners time and keep it around that 25 minute mark. So before you go, what advice would you give to people who are currently in a partnership and they're struggling to get on the same page? Let's hear one piece from each of you.

I would say one thing is be willing to have the tough conversations about what you really want out of a partnership early on. And if you're not willing to cheat the system and cheat what needs to be said initially, then you're going to see so much more value and fulfillment later. You know, one of the things that Dan and I wanted was control over.

Our system and our process.

You know, we own our database and we operate within a platform allows us the flexibility to come and go. You know, nobody tells me when I have to be at work. I just want to be here as soon as I can because I know Dan's working hard too. So if you see that other person working hard, you know that you guys have had those conversations up front about how's the ownership structure? Is it 50 50? Who owns the intellectual property? Who owns the valuation and the intelligence of those clients? If you're willing to have those conversations when you're starting out, you're setting yourself up for a way more comfortable and happy and honest partnership years down the road.

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