June 20, 2014 in Investing In Real Estate
The mistake so many real estate investors make in the negotiating process is to think that the negotiation is all about the money. Sure; money is important. Motivated sellers are definitely looking to put some cash in their pocket.
But there is always “something else” that they are always looking for; something that is even more important to them. That “something else” is a solution to their problem. There is always a problem to solve.
If you are going to learn to negotiate like a pro, you have get really good at finding out what that “something else” is. So how do you do that?
Here are 4 Ways You Can Learn to Negotiate Like a Pro
1) Learn to be a good listener. This is a difficult thing for some real estate investors to do. If you have spent any time on the phone at all talking to sellers, you will know that those conversations can be really challenging at times; even painful. You will come across sellers that have a need to tell you their entire life story.
Now it may be your natural inclination to redirect this conversation so you get back on track with your plan to get all of the property information. However, with this type of person you are going to have to sit there quietly and listen. These motivated sellers need for you to understand “their story”. It is their way of seeing if the two of you can work together. So be prepared to get something to drink, prop your feet up and get ready to “sit a spell”.
2) Learn to draw out the “non-talker”. As funny as it seems, there will be those sellers that as much as they want to sell the property will be hesitant to give you any details. This conversation will be like “pulling teeth” as the saying goes. They tend to give you either yes or no responses or short answers with little or no detail.
For instance; if you ask them to tell you about the house they might say, “It’s a solid well-built house”. You were most likely looking for something like, “I have a “3 bedroom brick ranch with a full basement and a garage”. When you ask them about the age of the furnace and AC they will simply say, “They are working fine”.
If you ask them specifically about the condition of the kitchen and when it was last updated they will say, “Everything is in good condition” when it actually hasn’t been updated since 1953.
Your challenge will be to keep a smile on your face as you try to get the necessary information about the property to see if there is possibly a deal here. This is also the time when you will need to begin to begin the process of changing the seller’s “expectations”.
3) Learn to tactfully redirect the conversation when needed. There are some sellers out there that no matter what you ask them, they give you a totally different and unrelated answer. It’s almost like they didn’t actually listen to the question.
I spoke to one of those types of sellers just this week. When I asked her to tell me about the house, she said something like, “My aunt really loved the big rooms in this house. She especially loved the wallpaper in the dining room”. That definitely wasn’t what I needed to know.
When I asked her about the condition of the bathroom she said, “Just about every child born into this family has taken a bath in that tub. I just love that tub and tile in there. It’s so pretty”. Once again, there is not a shred of useful information.
Then I got a little more specific. I said can you tell me about the basement? Have you ever had any water problems or leaking of any kind? Here response was, “We have had so many great parties down there. It’s the perfect place for family gatherings. And if you have small children, there is big playroom too.
4) Learn to “take back the conversation when all else fails”. Everyone needs to understand that we aren’t really in the house business; we are in the problem solving business.
Part of solving problems is listening carefully to what folks have to say. However, there comes a point when you need to get down to business and get the information about the property so you can move forward. Being able to do this tactfully will help you build a relationship with the seller, but it will also enable you to get the information you need. After all, this is business. Part of learning to negotiate like a pro is just practice. It's actually the way we all learned.
To succeed in this business it is critical for you to hone your people skills and your negotiation skills. With that in mind, I decided to do something a little different to really dive into how to talk to motivated sellers.
My friend and fellow real estate investor from Oklahoma Kelly Payne and I recorded a Google Hangout for you where we do some role playing. In this training, “How to talk to motivated sellers” we show you a little bit about what you can expect when talking to some of the more challenging sellers and just how you handle those conversations.
If you are one of those folks that have some experience but you still don’t feel confident talking to motivated sellers we have some tips for you.
For those investors that are still dreading or maybe even avoiding calls entirely from motivated sellers (you know who you are) this video training is definitely for you. You have to get over your fear of taking to folks about their property. We had a blast doing this so be sure to check back on Monday.
If you haven't already subscribed to the “Inner Circle”, be sure to do that today so you don’t miss any of the business building tips I have coming your way. I want this year to be your best year ever! And if you enjoyed this article, please share it.