Negotiation Improve Pract
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Negotiation Improve Pract (by Ray-N-Pa [PA]) Mar 1, 2024 7:53 AM
       Negotiation Improve Pract (by S i d [MO]) Mar 1, 2024 8:36 AM
       Negotiation Improve Pract (by Ken [NY]) Mar 1, 2024 9:11 AM
       Negotiation Improve Pract (by RB [TN]) Mar 1, 2024 10:20 AM
       Negotiation Improve Pract (by Sisco [MO]) Mar 1, 2024 12:43 PM
       Negotiation Improve Pract (by BRAD 20,000 [IN]) Mar 1, 2024 2:04 PM
       Negotiation Improve Pract (by Roy [AL]) Mar 1, 2024 5:57 PM
       Negotiation Improve Pract (by Jason [VA]) Mar 1, 2024 8:54 PM
       Negotiation Improve Pract (by 6x6 [TN]) Mar 2, 2024 6:23 PM
       Negotiation Improve Pract (by Ray-N-Pa [PA]) Mar 3, 2024 7:39 PM

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Negotiation Improve Pract (by Ray-N-Pa [PA]) Posted on: Mar 1, 2024 7:53 AM
Message:

Of all the various skills that I have developed over the years, the one skill that has made me the most money has been my ability and manner I negotiate. Yet when I research this site, there really isn't much said about how everyone does it.

I would like to hear everyone's Negotiation Improvement Practices.

For me walking into a FSBO is a five step practice

1) Build rapport by noticing something that we have in common. Make that the focus of the initial small talk. Pets, military, politics, cars, or outdoors activities - something to break that initial awkwardness

2) Start acting like a consultant and not a sales person. Understand that this person called you to help solve their problem. So instead of using "You can", use "we can" Include yourself in the solution

3) Match your body language with the sellers. if they are leaning in, lean in. Also match the energy level of the seller. In Pa we are second only to Florida for the number of senior citizens we have. Seniors are a little bit slower generally so, I find myself having to match it. Just because someone is slower or faster doesn't make them any smarter or dumber than you - it just means they are different places in their life. Learn to respect that difference.

4) Walk through the various options that the seller can follow. I love asking them "why not". For example dear seller: we could always list this property with an agent - so why aren't you considering this that path? Oh you don't want to spend any money to fix this place up so it is move in ready? Well then you can always auction is off, why don't you consider that trail where you might only get one bidder?

5) BE THE RELUCENT BUYER - this can be hard for me sometimes. I just bought 8 acres, a two car garage and a house for about $27,000 in December. This place should sold for four fold that. I asked them though - what is the best price that they can due, if me and my business partner would move forward. I explain That business partner that I have is a tough one to work with sometimes and routinely blows off a bad lead. (Any idea who that business partner is? My LLC that I use as Trustee on land trust deals - they are talking with that business partner since it is a sole member LLC).

6) I don't use the word contract when I in my salesman mode. Instead, we use written agreement instead. Contracts are such a legal sounding word, but having an agreement, that is softer and kinder.

7) Don't be afraid of hearing a NO. Sales is a numbers game and you will never be batting 100% on the leads, that is a good thing as many of these places, you have to ask yourself - do you really want?

8) Be even less afraid of hearing YES. Yes used to scare me more than No. Yes meant I had to take action and then I had to wonder if I missed something or was getting a bad deal upfront. I learned I made about 20% of all my money ever upfront and not when I sold. Remember deals are MADE

Most of these practices I use started out from military instructor training and an undergrad grad in workforce education coupled with decades of practice. I would love to hear other people's best practices in negotiation and training. I know I can ALWAYS improve my skills in this field. --24.101.xxx.xxx




Negotiation Improve Pract (by S i d [MO]) Posted on: Mar 1, 2024 8:36 AM
Message:

Good stuff, Ray. I particularly liked your point about building trust with the Seller by establishing a common point of interest or life experience and also by matching their body language: you can have the best deal in the world, but if the person on the other end doesn't trust you then nothing ever happens.

One of my favorite books on negotiating is "Never Split the Difference: Negotiating as if Your Life Depended On It" by Chris Voss. The author is a former FRI hostage negotiator, and he gained his experience talking people out of killing innocent victims. Talk about having to maintain your cool and stay focused!

The strategies are too numerous to cover here: it's a 245 page book, but just a few thoughts I picked up:

1) Don't feel their Pain. Label it. This means you have to find out what the "hurt points" are that are preventing the deal from closing and clearly spell it out so that both of you understand what it is. Sometimes a person may not want to sell because 'the house has been in the family for years...' but what that REALLY means is they feel like they're losing a part of their history and/or 'letting the family down.' It does no good negotiating if you can't get past that point, and to get past it you have to understand it. Maybe their pain point is they're emotionally attached to keeping the land in the family: okay, that's all well and good.... you want to leave a legacy and you're thinking that by selling the family farm the next generation won't have that same connection to the past that you had growing up.... that's understandable.

2) Trigger the two words... Beyond hearing the "Yes" that seals the deal, we have to reach points of common understanding and agreement. The two magic words are "That's right." So we start out by building up to Yes by finding common points of agreement.

Buyer: "I understand you have had this farm in the family for 4 generations. It must be hard to think about it not being there for the next generation."

Seller: "That's right."

B: "I thinks its important to keep our family legacy in mind. When my grandparents sold their farm, my brother and I didn't see it as losing out on a legacy. We're not farmers and didn't have the skills to work the land and keep it in good shape, and since we both live far away the time spent on the farm would keep us from spending time with our families since our kids are still very young. Grandma and Grandpa used the money from the sale instead to fund college for their grandkids so they don't have to worry about the high cost of education these days. So they left quite a legacy in their grandkid's education, don't you think?"

S: "That's right."

And so on...

The bottom line is that we often give us too easily and/or give up too much. We have to stick to our criteria of what makes the deal work. And to do that, we have to write out our criteria. I have a fantastic spreadsheet analysis tool that I've developed over the years that takes into account all the financial factors I consider important, but what it doesn't/can't track is "how will I feel about owning this property 3, 5, or 10 years from now?" Is it a flipper? Is it a keeper? Is it going to take a lot more work to get it up to speed and keep it running compared to something far simpler?

Once I have my criteria in place, I'll try whatever to get the deal there, but once I hit the bottom line, there's no budging. I treat it like a hostage situation, and "the hostage must walk away alive" is the non-negotiable criteria.

One other thing: walk away power has gotten me discounts that were "impossible" 24 hours ago. I walked away from my most recent commercial deal until finally the agents decided they could cut me a sizeable discount on their commissions to get my offer to work. $70,000 stayed in my pocket for just... walking... away. Probably the most economically productive 24 hours in my life.

--70.57.xx.xx




Negotiation Improve Pract (by Ken [NY]) Posted on: Mar 1, 2024 9:11 AM
Message:

Good list Ray- To me i make sure i am going to the right persons house,meaning a motivated seller.When someone calls me want to hear all the drama,exact opposite of what i want to hear when renting a house.The best negotiator can only do so much if they owe too much to begin with or they dont care.I check taxes,mortgages,judgments etc so when i sit down with them i can show them exactly where they stand and what i can do to solve the problem.Most people think of negotiating as the minute you sit down to start talking numbers but i am gathering info from the beginning to help later on.Most unsofsticated sellers really have no idea what they need to get in order to get out from under a house so saying i will give you $20000 might not work because a confused mind says no but what i like to do is say i will pay the back taxes of $12000,i will pay the judgment against it of $4000, i will pay my attorney to do the paperwork at my expense and i will pay the county filing fees. sometimes they go for that,sometimes they want a couple thousand to get moved.Many times i have been asked how do i know when we get to your attorneys office you wont make me pay for something? I tell them leave your checkbook at home and that seems to help --74.77.xx.xx




Negotiation Improve Pract (by RB [TN]) Posted on: Mar 1, 2024 10:20 AM
Message:

My best time to make a cash offer on anything

is when I don't need it.

You can go your own way.

--69.130.xxx.xxx




Negotiation Improve Pract (by Sisco [MO]) Posted on: Mar 1, 2024 12:43 PM
Message:

You can restart negotiations at any time, so donít fear offending buyers,sellers,or tenants. --149.76.xxx.x




Negotiation Improve Pract (by BRAD 20,000 [IN]) Posted on: Mar 1, 2024 2:04 PM
Message:

Don't drive the Porsche.

Dress down. Look like a broke handyman. Paint on clothes, etc. (ask Roy what he wears! haha!)

Have a ONE PAGE agreement with SIMPLE SIMPLE outline of Price, Earnest, I pay all closing costs, name______

Never say "SIGN HERE". Say "I just need your approval" while handing them the pen.

Avoid fancy terminology. I made an offer on a 3 house package in a realtor office with my agent. The seller just happened to show up. I listened from the next room while the listing broker who OWNED the agency!! CONFUSED the seller with talk about title insurance, escrow, blah blah...Seller walked away in a daze, decided it was to difficult to sell.

Not an investment company with partners and offices.

Have a pen ready.

Never criticize any aspect of the property. Maybe his deceased son built that ratty shed.

"Joe, If I gave you $XXX could you live with that?" Extend hand for and handshake.

Make the deal on the spot. I chuckle when newbies tell me they will go home and run the numbers. Gotta KNOW the numbers (comps, etc) before walking in. It's not that hard.

Give seller cash earnest on the spot. "You want $35. I'll give you $1000 cash right now if we agree on $30." Done. (he was twitching for drug money)

Another - Asking $45. Agreed on $40. I handed her $100 and her phone rang. Another investor was offering her $45. She said sorry, it's sold. If I had delayed even seconds the purchase would have been lost. Signed the one page Purchase Agreement.

Local flipper does well with "I pay all the closing costsand yo walk away with a check for $XXX."

BRAD

--73.103.xxx.xxx




Negotiation Improve Pract (by Roy [AL]) Posted on: Mar 1, 2024 5:57 PM
Message:

Brad20,000

You just outlined my negotiation strategy to a T. Yes, I dress and act like a broke handyman who just received a $5K tax refund check.

--71.207.xxx.xx




Negotiation Improve Pract (by Jason [VA]) Posted on: Mar 1, 2024 8:54 PM
Message:

I wish I knew one percent of what youíve forgotten in your lifetime,Ray. I learn something new from you in almost every post. --71.63.xx.xx




Negotiation Improve Pract (by 6x6 [TN]) Posted on: Mar 2, 2024 6:23 PM
Message:

Don't be afraid to walk away. This could apply if you are the seller or the buyer.

I have never been a good salesperson. It seems to be a really good salesperson, you need to be a good bull spitter. Look at politicians.

I am learning from your post and others responses right now.

--76.129.xxx.xx




Negotiation Improve Pract (by Ray-N-Pa [PA]) Posted on: Mar 3, 2024 7:39 PM
Message:

Experience comes from mistakes. And i admit making more than my fair share of them.

The real question is did you learn from them and what did you do to improve --24.101.xxx.xxx



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