Negotiation

Real Estate Investing Course - Lesson Six

When you bought your home (or your first car), you offered less than you were willing to pay, right? That's the most common negotiation technique. For experienced investors, however, that's just one technique among the many more powerful ones. What else can you do?

Some Useful Negotiating Techniques

1. Offer an odd amount, like $161,793. This gives the impression that you know something the seller doesn't. Specific numbers have a certain air of authority to them. The seller will think you have a good reason for that particular price.

2. Play dumb. Ask questions, talk slow, ask for help, and never show off your real estate expertise. Sellers can be afraid to budge if they think a more knowledgeable person may be taking advantage of them.

3. Use the "limited authority" ploy. If you need to say no to something , say "I'll have to check with my wife (or partner)." It's easier for sellers to accept that you can't do something, rather than the idea that you won't.

4. Refer to precedent. If the offer is at all unusual, sellers will feel more comfortable once they know it has been done that way before. Say "My father bought his house this way," or "When I was in Florida, the sellers liked it done this way."

5. Ask for things you don't want. This lets the seller win concessions back later. If you can say, "I guess I don't need the refrigerator, if I can get my price," you're more likely to get your price. Also, just asking for things so the seller can say no lets him feel like he's "winning" the negotiation.

6. Be reluctant. Say "Well, I don't know," and hesitate once in a while. Reluctance gets the seller looking for ways to motivate you, and lets him feel like he's won something when you settle the point.

7. Make it their idea. "Are you saying you'd like a later closing, and more earnest money? Well let's do it your way, then. I just need..." As soon as they change one thing in your offer, it can be treated as their idea. People become attached to their ideas, so the seller will often give you what you want to get the deal closed "his way."

8. Get a yes before it's in writing. Try something like "What if I paid your price, but got my terms? Is that a possibility?" Even with a few changes later on, it will be hard for the seller to say no to an offer he has more or less already agreed to.

9. Flatter the seller. Flattery has been proven to be worth an average of $1962 in real estate negotiations. That's a joke, by the way, but you know if he likes you, you'll probably get a better deal. People like you better when you say nice things about them. Don't be too blatant, of course.

10. Pass over problems, and return to them later. Agree on every agreeable point first. It will feel like the house is sold then, and it will be difficult for a seller to lose the deal over an issue or two that you need to go in your favor.

11. Truly look for win-win propositions. Discover the seller's true needs and find a way to help him, so he can help you.

You can spend a lot of time looking for cheap houses. Why not spend a little time learning how to purchase every home for less, with some smart negotiation?

Steve

Note: This is part of a subscription course. If you haven't subscribed, and want to get the other lessons (no charge for now) use the link below to go to the home page and sign up.

Make That Offer | Negotiation