Slash Prices With ‘Ninja’ Negotiating Tactics
Two investors can speak to the exact same motivated – even desperate – home seller and one will have a hard time getting the seller to even invite them to see the house while the other walks away with a great price and creative financing built-in. What makes the difference? Negotiating techniques.
Yet one of the biggest fears for investors is negotiating deals. In fact many view negotiating in a negative light – as if “negotiating” means taking advantage of the other party. In fact, the opposite is true. The most successful negotiations occur when both parties receive what they want. The trick is understanding what they “want”.
My approach to negotiating is much more like the “ninja” – you never see it coming. We never get into the “negotiating” phase of the discussions because the entire discussion from the very beginning is part of the negotiations. It starts with setting the right tone in the marketing. The marketing establishes a certain rapport between you and your seller – and attracts the prospects who “want” what you have to offer: a quick way out. Notice I didn’t say a high price for their home. First attract the right prospects. Your negotiations will go a lot smoother.
Once I start talking to a prospect, I come across as their friend – a consultant who is on their side trying to help them oppose a common enemy: their motivating factor. It could be financial; or a life problem; or a house problem. Whatever their motivation, it’s me and the prospect against the enemy. We’re on the same side.
Do you see the difference? Most negotiations start off on opposite sides. It becomes a competition. When I negotiate there’s no competition because we’re working together! Sellers relax their guard and open up as to what is really going on in their life. Successful negotiating requires information. You need to know exactly what is happening in their life and uncover what they really want.
I was working with a seller who owned her house outright – no mortgage. Obviously I wanted to see if I could get some seller financing. She had told me that she was simply downsizing and wanted out of the property as soon as possible so she could get into a smaller house since she was now alone. We were having an easy friendly conversation. I asked her what had changed in her life. She said that it had just been her and her son, and he was now off in college. She also wanted to be able to pay for his tuition for the next three years, but didn’t have the cash unless she sold the house. I now knew what she “wanted” – to pay the tuition.
I asked her when the tuition was due. She said that it was due in August (this was December). Perfect. I at least knew that I had 8 months to work with. Next I asked her if the whole year was due – or just the 1st semester. Of course, it was just the semester. And the cash for the house would cover all three years he had left.
Armed with this information, I offered the price she needed as long as she would finance the house for me. I told her that I would give her a small amount down at closing; make a 2nd payment in August (enough to cover the tuition); and the balance in December or whenever I sold the house whichever came first.
Since I gave her exactly what she “wanted”, she agreed to the deal. I got all but a few thousand dollars of the sales price financed (with no monthly payments), AND as it turned out I had it sold before the first payment in August was due!
Did I strong arm her? No. Did I outsmart her? No. I just listened to her stories as we talked, uncovered her true motivation, then offered her a deal that worked for both of us. Negotiating is not difficult – it’s just a conversation. Talk to your prospects. Listen to what they’re saying. Then offer them what they “want”. It will be a win-win every time. Take it from the negotiating ninja!