Negotiation Strategies for Property Managers
Many association boards and property managers miss out on easy price reductions during contract negotiations. Even after selecting the best vendor, you can save money with well-placed phrases and the right approach.
A Simple Strategy That Works
Let’s say the board and property manager send out an RFP for bids on fencing. Here is an example you can use to reduce costs on approved contracts:
Review the Bids as Usual
After the board selects a vendor, keep their decision confidential. The vendor won't know if they have been selected, the details surrounding the choice, or their competitors’ prices. You have advantages over them, as you know this information.
Make the Call
Call up the chosen vendor (preferably the company owner) and say something along the lines of:
“Good news! The board selected your company. However, your bid is higher than expected. Can you match or beat a competitor’s lower bid?”
Set the Target Price
Suggest a realistic lower price (e.g., 10% below the lowest bid). Remember, you can always raise your offer during negotiations, but you can never go lower once you give a number. This tactic still works even if the company chosen is the lowest bidder.
Why It's Worth It
If you save your communities an average of 5 or 10% on all these discretionary expenditures for jobs already approved at the higher price, you can easily calculate how much you will save for the year; it adds up quickly!
Negotiations are fun, so have at it! You have nothing to lose. Reach out for more property management tips.
Marty Wainer
Regional Director of Property Management