Creating Negotiation Leverage

Welcome to CRE Broker Playbook!

I’ve been watching Your Friends and Neighbors on Apple TV+ with Maddie.

There’s a great scene where Jon Hamm gets absolutely bodied in a negotiation.

It was clearly his first time in a pawn shop and he was desperate to get the deal done. It cost him thousands!

Don’t be like Jon Hamm.

Keep reading and hear how two top brokers create leverage in the deal making process.

Plus - That new Range Rover? Yea, it costs $266K!

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💸 LEASED SPACE

Today's newsletter is brought to you by For CRE Brokers.

Mike Salmon and Jake Crandall provide CFO services to high-performing CRE Brokers across the country.

What started with our own tenant reps seeking financial guidance has evolved into a comprehensive service specifically designed for CRE brokers.

As both financial advisors and CPAs, we bring the perfect combination of expertise to assist brokers in optimizing their independent contractor status and 1099 income.

We act as your personal CFO, streamlining processes and ensuring you stay focused on growing your business while we handle the details.

Interested in learning more?

⚓ ANCHOR TENANT

The Art of Creating Leverage: Options & Sacrifices

In negotiation, leverage isn't given—it's created. Two successful brokers share their contrasting approaches to manufacturing leverage when the stakes are high.

TC Cosby, Greysteel (6 years in business)

TC leverages a classic negotiation principle: "Always have something that you're willing to give up that the other party doesn't know about," he explains. "That one point you add into the agreement that is not a deal breaker to you but doesn't necessarily appear that way to the counterparty." This strategic concession shows goodwill while preserving what truly matters in the deal.

Jay Reeves, Matthews REIS (5 years in business)

Jay takes a different approach to leverage: "Creating an environment in which my client has multiple options is essential to negotiating from the high ground," he says. "Leverage is most commonly held by the party who has the ability to walk away with less consequence than the other party."

The Takeaway: The Leverage Equation

What connects TC and Jay's tactics is a fundamental truth about negotiation: leverage must be engineered, not hoped for.

TC creates leverage through strategic concessions—knowing exactly what he can sacrifice to gain what matters.

Jay creates leverage through alternatives—ensuring his client never negotiates with only one option.

Both approaches require advance preparation. The average broker enters negotiations reacting to terms (Like Jon Hamm in the pawn shop!). Top producers enter negotiations with a pre-planned strategy for creating leverage.

Action Step: Before your next negotiation, identify three potential concessions you could offer that won't materially impact your client's position. Then, determine what you want in exchange for each. Having this "concession map" ready gives you tactical flexibility when negotiations intensify.

🤓 FROM THE BACK OFFICE

That sleek Range Rover might cost you more than you think.

Let's run the numbers:

A slightly upgraded Range Rover (over 6,000 lbs) costs about $130,000. Even with Section 179 depreciation allowing you to expense $30,500 in 2024 and special depreciation for another $39,800 (40% of the remaining $99,500), the tax savings only amount to about $20,809 at the 37% tax bracket.

This brings your net cost to $109,191. But here's the real question we ask our clients:

How much commission income do you need to generate to afford this vehicle?

At the 37% tax bracket and a 65% commission split, you'd need to generate $266,645 in Gross Commission Income just for this one purchase. And this doesn't even account for state and local income taxes or interest if you finance it.

Our advice? Consider whether your business truly needs this expense, or if that GCI could be better directed toward building wealth or your pipeline.

Thank you for reading until the end, we appreciate you!

Jake and Mike