Dean Graziosi’s Real Estate Investment Academy

<!– /* Font Definitions */ @font-face {font-family:”Cambria Math”; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:1; mso-generic-font-family:roman; mso-font-format:other; mso-font-pitch:variable; mso-font-signature:0 0 0 0 0 0;} @font-face {font-family:Verdana; panose-1:2 11 6 4 3 5 4 4 2 4; mso-font-charset:0; mso-generic-font-family:swiss; mso-font-pitch:variable; mso-font-signature:-1593833729 1073750107 16 0 415 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:”"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:”Times New Roman”,”serif”; mso-fareast-font-family:”Times New Roman”;} h1 {mso-style-unhide:no; mso-style-qformat:yes; mso-style-link:”Heading 1 Char”; mso-style-next:Normal; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; page-break-after:avoid; mso-outline-level:1; font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-font-kerning:0pt;} p.MsoBodyText, li.MsoBodyText, div.MsoBodyText {mso-style-noshow:yes; mso-style-unhide:no; mso-style-link:”Body Text Char”; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-fareast-font-family:”Times New Roman”; mso-bidi-font-family:”Times New Roman”;} span.Heading1Char {mso-style-name:”Heading 1 Char”; mso-style-unhide:no; mso-style-locked:yes; mso-style-link:”Heading 1″; mso-ansi-font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-ascii-font-family:Verdana; mso-hansi-font-family:Verdana; font-weight:bold;} span.BodyTextChar {mso-style-name:”Body Text Char”; mso-style-noshow:yes; mso-style-unhide:no; mso-style-locked:yes; mso-style-link:”Body Text”; mso-ansi-font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-ascii-font-family:Verdana; mso-hansi-font-family:Verdana;} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-size:10.0pt; mso-ansi-font-size:10.0pt; mso-bidi-font-size:10.0pt;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} –> The Mortgage Bankers Association (MBA) sees trouble ahead. With high delinquency rates in multi-family and commercial mortgage markets, the opportunity for short sales and foreclosure acquisitions is strong.

30-day delinquencies rose 5.38 percent last year. Fannie Mae insured multi-family delinquencies rose an astounding 67 percent over last year. 90-day delinquencies have increased 100 percent in one year. Banks are nervous about absorbing the losses but time is running out for the lenders.

The MBA sees no turnaround in sight until the Obama Administration does something about the unemployment rate. At the core of the delinquency problem is consumer confidence. Washington has made promises, indicated that jobs will be created with stimulus funding but the public just is not seeing or feeling any change.

Unemployment remains at 9.7 percent and higher in metropolitan areas. Some economists suggest real unemployment is in the 20 percent range. They just may be right.

High unemployment is hurting the commercial real estate market in many ways. As companies consolidate operations and operate at low employment levels, they simply do not require the space to which they were accustomed. Yet, these same scenarios give cause for hope for short sale purchasers.

Commercial short sales are unlike residential short sales. The emphasis in successful commercial short sales is for the investor to arrive at new exit strategies that will appeal to new lenders and new tenants.

For example, as companies pare down their workforces, savvy investors are contacting companies that are scaling back and positioning themselves to accommodate the changing commercial environment. Solving the exit strategy is often the key to any short sale but commercial opportunities have far more options than residential properties. Investors must be creative and develop new occupancy rates, find new tenants and understand the zoning board procedures for the community.

Commercial short sellers are more sophisticated than residential owners. There is less emotion and a more willing seller on the other end. Get your strategy in place, because 2010 is the time to capitalize on the down commercial market.

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<!– /* Font Definitions */ @font-face {font-family:”Cambria Math”; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:1; mso-generic-font-family:roman; mso-font-format:other; mso-font-pitch:variable; mso-font-signature:0 0 0 0 0 0;} @font-face {font-family:Verdana; panose-1:2 11 6 4 3 5 4 4 2 4; mso-font-charset:0; mso-generic-font-family:swiss; mso-font-pitch:variable; mso-font-signature:-1593833729 1073750107 16 0 415 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:”"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:”Times New Roman”,”serif”; mso-fareast-font-family:”Times New Roman”;} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-size:10.0pt; mso-ansi-font-size:10.0pt; mso-bidi-font-size:10.0pt;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} –> Commercial and residential short sale opportunities await every qualified investor. However, completing a short sale takes experience, patience and incredible drive. It is a difficult process to bring the primary lender, the secondary lien holders and the seller together to consummate the sale. Surprisingly, the most difficult component can often be keeping the seller in the game.

Experienced investors perform their due diligence. Part of that due diligence should include an assessment, including as much financial background as is available, of the seller. If the short sale seller is not truly motivated, the investor and the investor’s team can go through many hours of effort for naught.

Investors can benefit from a frank interview with the seller before arriving at an agreement. Sellers can be bitter about a short sale and can sometimes actually be benefiting from their hardship. Many sellers are collecting rental income and not making mortgage payments. Be weary of these sellers as their motivation is lacking.

The ideal short seller has assets and very possibly other real estate holdings that are worth protecting or is facing an unexpected hardship such as unemployment and does not want their credit destroyed for an extended period. The investor should seek proof of the hardship.

In conventional acquisitions, the buyer is evaluated by their “ready, willing and able” disposition. This is a good formula to apply to short sellers. If the shirt seller is not ready, willing and able, you could be wasting your time.

Sellers need to know that delays and unexpected events can surround hardship sales. Sellers may need to perform repairs, pay outstanding utility bills and a host of other stressful possibilities. These sellers need to know and often be reminded that concluding the short sale is to their advantage.

To protect themselves, many investors have had their attorneys insert clauses in the contract. If the seller backs out of the agreement without just cause, they must reimburse the seller for lost time. This can raise issues but protecting one’s self is always worth a try.

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On June 24^th, Fannie Mae released a stern message with strong ramifications for borrowers who default on Fannie Mae mortgages. The announcement marks a shift from what has previously been a loose laissez-faire policy to a new, comprehensive collection policy. The new policy is strict and is the direct result of the willingness of homeowners to walk away from their mortgage obligations.

With many unemployed homeowners and with many mortgages that exceed appraised values of the homes, a high percentage of Americans are intentionally defaulting on their mortgages and forcing lenders to foreclose. This practice has cost Fannie Mae billions of dollars.

In the announcement Fannie Mae stated, “Defaulting borrowers who walk-away and had the capacity to pay or did not complete a workout alternative in good faith will be ineligible for a new Fannie Mae-backed mortgage loan for a period of seven years from the date of foreclosure.”

“Fannie Mae will also take legal action to recoup the outstanding mortgage debt from borrowers who strategically default on their loans in jurisdictions that allow for deficiency judgments.”

The bottom line is that Fannie Mae will now take action to try to collect money lost as a result of walk-away borrowers. The seven-year restriction is severe as the majority of housing loans in the U.S. are backed by Fannie Mae. Previously, homeowners who defaulted could apply for Fannie Mae backed mortgages within three years. Those days are now gone.

The moves by the country’s largest insurer of mortgages is designed to bring underwater homeowners together with lenders to either arrive at loan modifications or in the alternative short sales. Foreclosure is the least desired alternative.

To help the modification process, The Obama Administration has committed billions of dollars in loan reductions and incentive programs for both homeowners and lenders. Originally, lenders were not supportive of modifications because they did not want to accept the losses. What these lenders soon discovered is that the cost of foreclosures far outweighed the relatively minor losses incurred by modifications.

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<!– /* Font Definitions */ @font-face {font-family:Wingdings; panose-1:5 0 0 0 0 0 0 0 0 0; mso-font-charset:2; mso-generic-font-family:auto; mso-font-pitch:variable; mso-font-signature:0 268435456 0 0 -2147483648 0;} @font-face {font-family:”Cambria Math”; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:1; mso-generic-font-family:roman; mso-font-format:other; mso-font-pitch:variable; mso-font-signature:0 0 0 0 0 0;} @font-face {font-family:Verdana; panose-1:2 11 6 4 3 5 4 4 2 4; mso-font-charset:0; mso-generic-font-family:swiss; mso-font-pitch:variable; mso-font-signature:-1593833729 1073750107 16 0 415 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:”"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:”Times New Roman”,”serif”; mso-fareast-font-family:”Times New Roman”;} h1 {mso-style-unhide:no; mso-style-qformat:yes; mso-style-link:”Heading 1 Char”; mso-style-next:Normal; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; page-break-after:avoid; mso-outline-level:1; font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-font-kerning:0pt;} p.MsoBodyText, li.MsoBodyText, div.MsoBodyText {mso-style-noshow:yes; mso-style-unhide:no; mso-style-link:”Body Text Char”; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-fareast-font-family:”Times New Roman”; mso-bidi-font-family:”Times New Roman”;} span.Heading1Char {mso-style-name:”Heading 1 Char”; mso-style-unhide:no; mso-style-locked:yes; mso-style-link:”Heading 1″; mso-ansi-font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-ascii-font-family:Verdana; mso-hansi-font-family:Verdana; font-weight:bold;} span.BodyTextChar {mso-style-name:”Body Text Char”; mso-style-noshow:yes; mso-style-unhide:no; mso-style-locked:yes; mso-style-link:”Body Text”; mso-ansi-font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-ascii-font-family:Verdana; mso-hansi-font-family:Verdana;} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-size:10.0pt; mso-ansi-font-size:10.0pt; mso-bidi-font-size:10.0pt;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} /* List Definitions */ @list l0 {mso-list-id:55275773; mso-list-type:hybrid; mso-list-template-ids:1766504880 -1489760742 67698691 67698693 67698689 67698691 67698693 67698689 67698691 67698693;} @list l0:level1 {mso-level-start-at:0; mso-level-number-format:bullet; mso-level-text:; mso-level-tab-stop:1.0in; mso-level-number-position:left; margin-left:1.0in; text-indent:-.5in; font-family:Symbol; mso-fareast-font-family:”Times New Roman”; mso-bidi-font-family:”Times New Roman”;} ol {margin-bottom:0in;} ul {margin-bottom:0in;} –> The Obama Administration and its housing recovery team were taken to task in a recent Congressional hearing. At issue is the $75 billion housing stimulus fund that is designed to help 4 million homeowners avoid foreclosure. At the core of the rescue package is the Treasury’s loan modification program.

In November, the number of troubled homeowners in trial modification programs rose to 697,026 from the 650,994 October level. Amazingly, only 31,382 homeowners have been converted to long-term loan modifications. At the same time, the number of failed trial programs now stands at 30,650.

Failure occur for three primary reasons:

· Failure to sustain timely payments during the trial period

· Failure to submit all necessary paperwork

· Failure to qualify as having insufficient income

These tendencies underscore an alarming fact that homeowners who are underwater are unwilling to continue to pay for properties whose debt surpasses the value. There is a strong tendency to walk away and begin to rent in another area. This drives home prices lower.

Congress is pressuring the Administration to help more homeowners. Phyllis Caldwell of Treasury’s Homeownership Preservation Office explained, “Our focus now is on working with servicers, borrowers and organizations to get as many of those eligible homeowners as possible into permanent modifications.”

The administration has been leaning on lenders to engage troubled homeowners, but the country’s biggest mortgage lenders like Bank of America and Citigroup have chosen to ramp up their foreclosure efforts. Treasury is now launching an all out campaign to intervene. Utilizing forceful oversight of loan services’ modification programs, the government expects modifications to significantly increase in the upcoming months.

Treasury is even sending out advisers to assist borrowers with completing paperwork. The current long-term conversion arte is just 4%. The Treasury would like to see 40% increases in the next tow or three months. If the goal is accomplished, there should be a very positive effect on housing prices.

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<!– /* Font Definitions */ @font-face {font-family:”Cambria Math”; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:1; mso-generic-font-family:roman; mso-font-format:other; mso-font-pitch:variable; mso-font-signature:0 0 0 0 0 0;} @font-face {font-family:Verdana; panose-1:2 11 6 4 3 5 4 4 2 4; mso-font-charset:0; mso-generic-font-family:swiss; mso-font-pitch:variable; mso-font-signature:-1593833729 1073750107 16 0 415 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:”"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:”Times New Roman”,”serif”; mso-fareast-font-family:”Times New Roman”;} h1 {mso-style-unhide:no; mso-style-qformat:yes; mso-style-link:”Heading 1 Char”; mso-style-next:Normal; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; page-break-after:avoid; mso-outline-level:1; font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-font-kerning:0pt;} span.Heading1Char {mso-style-name:”Heading 1 Char”; mso-style-unhide:no; mso-style-locked:yes; mso-style-link:”Heading 1″; mso-ansi-font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-ascii-font-family:Verdana; mso-hansi-font-family:Verdana; font-weight:bold;} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-size:10.0pt; mso-ansi-font-size:10.0pt; mso-bidi-font-size:10.0pt;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} –> Much like the equity markets, real estate investors are constantly digesting real estate trends, mortgage trends, community development trends and attempting to read the trajectory of the real estate recovery. It seems like everywhere you turn, there is one more piece of insightful feedback supporting one more theory.

The shape of the recovery may well influence your investment strategy. The most common debate evolves around whether the recovery will be V-shaped or W-shaped. The V shape would indicate that 2009 and 2010 will be good times to invest. A W-shaped recovery suggests a prolonged period of opportunity and a buy and hold pattern of investment.

Steve Horne, CEO of the loan modification firm Wingspan Portfolio Advisors, says; “I am a firm prophet of the W-shaped recovery. Housing is going top go down again in the first quarter of 2010. The healing won’t begin until all these non-performing loans start trading in earnest, until we get borrowers back on their feet.”

Horne just may be right. “A lot depends on how long the government keeps its buying up. Rates are still at all-time lows, but once the buying stops, we’re going to come to a pretty hard stop. We are likely to see a much smaller mortgage market after the second quarter and later in 2010.”

As the economy shows signs of stabilization, the government is expected to pull back from the infusion of more funding. The continued government investment in toxic assets is considered inflationary. This will mean that banks must dispose of the assets and incur substantial losses. The result is likely to be further setbacks to market values.

Only when this shadow inventory is cleared out can investors expect to see prices begin to rise. However, equity markets have performed similarly. And, equities have surged more than 40% in 2009. Thus, the appearance of the W-shaped recovery gains credence. No one has ever doubted that successful investing includes being in the right place at the right time.

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The new program significantly reduces the paperwork, as the documentation for application is exactly what is used for the loan modification application. Too often short sales are lost because of delays by both the seller and the lender.

The program becomes active on April 5, 2010. Unfortunately many of the active listings today will not be affected, but government moves at it’s own pace. From the investor’s perspective, the enactment delay provides time to locate and research possible properties.

In addition to reducing the paperwork, lenders will need to approve the short sale price before then property is listed. This is a big step forward. Mortgage companies will receive $1000 to help defer the new administrative costs. Now, when buyers consider a short sale, they know the property is good to go.

The largest mortgage bank in the country is Bank of America, which absorbed the troubled Countrywide last year. BOA has hired 3500 new workers and upgraded their computer systems to become more efficient in processing short sales, foreclosures and REOs. The bank has 12 call centers and services 14 million loans. They have more than their share of troubled assets.

The tricky part of the short sale process is often the secondary loans. The Treasury Department estimates that approximately 50% of troubled homeowners have second loans. While $3000 is not much, it is better than nothing, which could well happen in foreclosure.

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The fact is that some real estate agents are not short sale savvy. To complicate matters further, the seller may not fully understand the process or repercussions. An experienced real estate agent can intercede and walk the inexperienced agent and the seller through the paces.

Certain short sales may not be acceptable to the lender. Meanwhile, some situations exist where a short sale might be considered even if the seller is not in default. The first step the buyer’s real estate agent needs to take is to gather facts that are a matter of public record.

The agent should gather the following information from public and real estate records:

* The property owners

· All lenders

· The mortgage amounts

· Tax records

· Zoning

· Plot plans

· Copy of deed

· All listing information

· Historical record of subject property

The experienced real estate agent can accurately assess the property and the seller’s ability to negotiate a short sale. If there exists more than one mortgage holder, the process can be slightly more complicated. However, an experienced agent can assist in building a case for the second lien holder. Often times, the agent can receive authorization from the seller to submit a short sale plan to the lenders. Unfortunately, some agents do not do this prior to listing a property as short sale.

In early 2009, with excessive short sale transactions went pending, many of the transactions failed to close because agents and sellers had not laid a proper foundation. With short sales now dominating a large sector of the marketplace, agents have gained experience, but the buyer should not underestimate the value of an experienced agent. That agent can fast become a real profit center.

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With a high percentage of real estate sales being short sales, real estate investors and their agents need to be well versed on the advantages and talking points for the short sale process. Short sales fit well into the investor’s buy low, sell high mindset but the investor’s position is best protected by employing due diligence.

Let’s face reality. Short sellers are unhappy. The property owner and the lender are both accepting a loss. The owner is selling the property under what was believed to be fair market value and in many cases accepting less than was paid for the property. The lender is agreeing to accept less than the full mortgage amount. Those are the two essential criteria that comprise a short sale.

Prospective purchasers should do their homework. That includes title searches, tax searches and connecting with the lender. Not all mortgage holders will accept short sales because in some circumstances, their position may be better served in foreclosure.

Typically, the seller in a short sale is an unhappy camper. There is usually a troubled employment situation and a certain amount of disenchantment with the financial system. The seller’s credit will suffer and the prospects for a new home are not good. If any other option existed, the property owner has probably exhausted it.

Short sale investors should connect with the mortgage lender. Experienced investors do not discuss the prospects for a short sale with anyone other than the person who is in a position to make a decision. This lender representative can usually indicate the willingness or unwillingness of the lender to negotiate a successful short sale. Investors should not accept generic conversations with the lender’s “troubled real estate” employees. If the quality of your investment and the value of your time are important, go straight to the decision makers.

Financing companies will not discuss short sales with investors who have not transmitted a letter of authorization. If you have a real estate agent that is negotiating for you, draft a letter of authorization naming the agent as a representative. Include your personal information including name, address and contact information and the same information for the agent. Include the loan reference number in the letter. Make sure your agent has a copy of the letter. Congratulations, you have taken an important step in the profitable short sale process.

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Full time worker’s unemployment has risen to 11.1 percent this month; this has moved upwards from the 9.8 percent in the last month. Full time workers are individuals who have consented to work for at least 35 hours per week. The number of full time unemployed people stood at 15.2 million, which is the highest in the last 40 years.

Increase in the unemployment rates has adversely impacted the loan repayment of many homeowners. Due to this trouble in loan repayment, many homeowners have been forced into delinquency due to repeated defaults. The net result has been increased foreclosure rates and more people losing homes. This has further reduced the demand.

The good news for some is that there are many choices, good ones, for homes at a price that they could never have imagined. The foreclosed properties are getting the prices down for the resale homes. It is believed that many financial institutions and banks have not enforced foreclosure on a large segment of their customers since these people are some type of loan modification program. When these programs end and there is no change in the repayment pattern of the individuals, the foreclosures will shoot up. The home loan interest rates have plummeted over the last few months reaching 5 percent in the previous week for a 30-year fixed term plan.

Most of the states have shown reduction in inventories over the past few months and this month the sales are up considering the above factors. Mortgage interest rates and availability of resale homes at less than the fair prices have prompted many to take the plunge. Adding to the spurt in buying is the fact that the first time buyers were given a tax incentive of $8000, which now ends on April 30, 2009.

Whatever your plan may be, to hold back or to take the gamble, you should be absolutely sure of your financials. Your current financial situation and the future cash inflows are both to be considered whilst making a decision. Once your finances are settled, this might be a good time to look at the option of buying your family the home that you have been waiting for. In case you are not too sure of your future cash flows, even though your current situation looks comfortable, you might just think about waiting a little bit more.

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Negotiating is an art form.  We admire real estate investors who understand the art of negotiating.  What we admire is their ability to cut through the distractions and get to the heart of the matter.

Negotiating is about compromising.  Negotiating is often about taking a different view of the transaction and pulling smaller pieces together in a presentable, agreeable form.

There are certain conditions that increase the ability of negotiating real estate transactions.  There are also factors that can eliminate the possibility before the negotiations begin.  It is easy to negotiate when there is no price differential.  That is not really a negotiation.  Instead, it is ironing out the details.

The financial ability to perform makes negotiations easier.  The ability to perform can get a lower offer accepted just as the inability to perform or the inability to document the ability to perform can put a deal to sleep in no time.  If you are prepared to make an offer, you should be prepared to document and demonstrate your ability to perform.  With this commitment in hand, you are assured a captive audience.

Other factors that can make or break deals are closing dates, deposit amounts, contingency dates, contingency substance, non-real property attachments and stated conditions.  Each of these contract items will need to be addressed and each of these items has caused deals to be made and deals to fall apart.

The investor with a plan is prepared to follow the plan and to unemotionally negotiate these items.  Bending on some of these items can lead to smooth sailing on more important thresholds.  The real estate investor has clear vision of the transaction and has identified the critical components.  Place other contingencies in lesser tiers and be prepared to give a little to gain a lot.  That is often what negotiating is all about; giving a little to gain a lot.

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