Negotiation is the highest paid skill that anyone can learn. A good negotiator can add tens of thousands or more to the bottom line of any transaction. A good negotiator can also convert the cash offer a seller wants in to a win-win offer with low down and reasonable terms. There are many ways to negotiate. Negotiating is something that needs to be planned and practiced often. The more you learn about how to effectively negotiate, the better you will get. See this article to learn more...
Real estate negotiations do not need to be about the lowest price. People are forever trading off one aspect of a property or transaction for another, depending upon their needs, prior experience, and personal goals. Some of the things they trade off include:
For me, the single most important thing I can discover is the real motive for selling or buying. Sometimes sellers, when asked what they want to achieve, act like kids in a candy shop who want some of everything. Anytime I perceive that the most important motivation for sellers is to make a profit, I usually refer them off to a Broker or another investor and try to glob on to some kind of referral fee or a future "favor". There's no point in both buyer and seller scrapping like dogs over the same profit-bone. On the other hand, when I can see that there is a real problem that the seller is willing to sacrifice to solve at the expense of his profit, I will work hand and glove with him or her to find a workable solution.
One of the best places for the neophyte to learn to negotiate is at garage sales or flea markets, It's the equivalent of playing pool for "fun". Following are a baker's dozen ploys among many I've used to soften up garage sale sellers, and which can be applied to house sellers, to get them to relax and start having fun with their sale, and to help my negotiation,
PLAY DUMB! No matter how the other guy explains what he wants out of the deal, just don't catch on. A real exercise in ego suppression - and one of the most valuable of all skills - is to be able to drop 60 points off your I.Q. and just say 'I don't get it.' 'How could that be?' 'Why are you charging me all that money when you said you only wanted $100,000.?' 'Explain it to me again.'
Like Flip Wilson's Geraldine used to say, 'What you sees is what you gets . This is particularly appropriate in any negotiation. If we'd be perfectly honest, the first person we have to negotiate with in any negotiation is ourselves. Be candid. How many times have you started to discuss a purchase of a house with an owner and heard a little voice in your head start to give you reason after reason why he wasn't going to sell to you at a price and on terms that would be attractive. That was your subconscious.....
Let's give our opponent every aspect of power. He's knowledgeable, motivated, can prove everything he says, is energetic, resourceful, creative, courageous and ethical. What can we do? The opposite. We can be listless, dull, ignorant, unimaginative, unschooled, afraid and fearful, and exhibit a desperate craftiness. A strange thing then happens. Our opponent becomes benevolent. He shows us things about our position and alternatives. He helps us to understand the scope and advantages of any options we might have. He helps us to make a better deal.
Peter Fortunato was my guest speaker for the Tuesday night conference call. I have to say, it was one of the best calls we have had!
• Why real estate investing is very alive and well – despite hedge funds.
• What to say to get motivated sellers leads from people you don’t even know
• How to get sellers to agree to seller finance with great terms
• How you can pay retail and still get great cash flow• Why you can make better deals with caring than you can with dollars
Finding I.D.E.A.L. properties is a numbers game. Many people step up to the plate expecting to hit a home run in the investment game their first time at bat. They quickly become discouraged and either settle for marginal properties which give them little joy and/or profit at the cost of much time, expense and pain; or they just quit and try something else. PATIENCE is your most valuable personal attribute if you can cultivate it. Acquiring the right properties should be a long term objective toward which the erstwhile fledgling capitalist steadily plods on his quest.
There has to be a note of cynicism or pessimism in every deal – if for no other reason than to make the negotiator prepare more thoroughly. Remember, you’re best results will be obtained in a noncompetitive environment. To the extent that a deal seems impossible, your competitors will abandon attempts to make it, thus leaving the field to you. On the other hand, it’s crucial that you not waste time on a deal that’s going nowhere. There’s an old saying that ‘buyers are liars’. So are sellers when it comes to revealing the true purpose of their entering into a transaction.