it’s a part of Finding and Funding Great Deals by Anson Young.
So you’ve put together a plan to get a deal and maybe even come up with a direct mail marketing plan targeting motivated sellers. You put 1,000 miles on your car to drive your new target areas, and you’ve got a nice list of driving-for-the-dollar properties. Now your hand is cramping from writing letters and you have nightmares in which you can’t get the stamp glue taste out of your mouth. To get you started on specific repairs, pay a contractor to walk you through some sample properties and furiously take notes. To sharpen your skills, you have scoured through a hundred properties in the area and found good high and low comps for the properties you are targeting.
Then the phone rings. This is a seller. A real, live human being driven to sell is right on the other end of the telephone. now what? Your palms are sweating and your tongue weighs a hundred pounds in your dry mouth.
you’re not alone. I talk to many investors laughing about their first dozen calls. The phone rings and you freeze. now what? One investor told me that the first time a potential seller called, he threw his cell phone across the room. Now the real work begins. While you may not realize it, the conversation started before you even picked up the phone. Now that they are in front of you, what you say will determine your future relationship and your ability to get a deal. No wonder you’re nervous!
You can be a natural negotiator – a phone whiz, a people master who loves the subtle art of rapport building. Then again, you might be an introvert who dreads the back-and-forth conversation that comes with bargaining, negotiating a car or—gasp—buying a house. While the natural negotiator will have an easier time initially, I think with some experience and motivation, both personalities can do well in this business. The same principles are at work when negotiating large items as when bargaining for small things. You are either selling them on a yes, or they are selling you on a no. Most of the same basic pillars of conversation apply.
Let’s look at some fundamentals of negotiation that apply to all situations in which we find ourselves—in real estate and beyond.
overcoming fear of rejection
“No.” No one likes to hear this little two letter word. It may be the most powerful word in the English language. “No, you can’t increase that.” “No, I will not partner with you in this deal.” There’s a whole negative psychology associated with “no,” and we’re always looking for ways to soften its delivery so as not to offend. Not listening can affect the way you deal with similar situations in the future. In order to learn resilience in the face of rejection, there are two basic strategies – getting the no’s and getting the yes’s.
reaching “no”
Go out into the world and get to ten pieces as fast as you can. The more you don’t listen, the more you get used to hearing it. When I started in real estate, I was knocking on doors of pre-foreclosure properties. My first day involved forty-five pieces—and not all pieces are created equal. The door was slammed after the na, I was threatened to be beaten up after the na, and of course, the police were threatened after the na. The more you become accustomed to rejection, the more emotionally attached you become to the word. It’s just business; You are not caught on a rock by your toenails, your family is not in danger, and your life is not in danger. If someone says no to you in real estate, you move on to the next deal.
getting a “yes”
Honing your skills and getting yes speeds up. The more you win, the better. The better you are, the more you win. As they say, success breeds success. Getting over your fear of rejection is key, and that means not listening enough times that it no longer affects you – and hearing yes is enough to build confidence in your abilities and start making money in this business. . The more you get yes out of a salesperson, the more you internally work into this or that situation, and your brain figures out how to apply it to the next situation. A sufficient number of experiences eventually lead to yeses, and the more yeses you hear, the more you’ll start to get.
bargain deal
The end goal of negotiation is not just your victory, but the victory of everyone involved. You might think, “I’m here to learn how to find good deals, close them, and get paid. That’s what it means to win.” The people I know in this business ultimately recognize that in order to have success with longevity, it’s important to win. You’re not trying to scam or defraud the salesperson. you are trying to help them. An ideal real estate deal is a win-win deal, where the seller gets the help they need and you walk away with a deal. When you get to yes, So you must be assured that everyone is leaving satisfied. If you do right by people, it always comes back to repay you.
There is a saying in real estate: The goal is not to make money; It’s about solving problems. If you can solve problems, money will never be a problem for you again. Win-win scenarios will pay you off financially and in less tangible ways. You might be able to pull one over on a salesperson a few times, but it will always come back to bite you. Online reviews, BBB reviews—and worse, lawyers—will come back to haunt you eventually. You might be able to fudge the numbers on a deal, but your reputation will be hurt in the process. Creating a win-win situation is a long-term investment in your future, your business, and your reputation.
listen more than you speak
When you think of an expert negotiator, you might imagine a slick man in a nice suit jabber-jaws with vigorous speech at a mile a minute. You would be wrong. The best negotiators listen more than they speak. Sure, his speech may be persuasive and carefully worded, but it’s strategically placed in the flow of the conversation. Think of the 80/20 rule, where 20 percent of your efforts account for 80 percent of your successes. When talking to a salesperson, this is true. Aim for that 20 percent, and let the other party do the talking for 80 percent. There is an old saying that says, “The one who quotes the price first loses.” In most negotiations, there is a “meet in the middle” or “split the difference” mindset. It is a compromise between two given prices, and your job is to define where the middle line should be. People usually don’t want to give more than they have to give or less than they get, so they try to meet somewhere in the middle. Being an active listener will help you have a better conversation and understand what is really needed in the situation.
no not the end
It’s easy to tell yourself that it doesn’t matter if a salesperson rejects you outright, but it’s hard to admit your feelings. The more you don’t listen, the easier it becomes – but only if you use it to improve your negotiation skills over the long term. What could you have done differently? Is this something you said? didn’t you say anything? In all honesty, you can do everything right and still get a big, fat number. When you spend time, effort, energy and money to get a lead in the door, each number can represent $150 spent to get to that point. Some things you just can’t control, no matter how hard you try. Just remember: Next week, it won’t matter if Bob Sellers said no to you. If you’re doing consistent marketing, by then you’ll be talking to Jim, then Sally, then Suzy, and so on. You might not have been told eight times – but you still wake up and learn from those eight times when you go to the ninth appointment. You just have to take the emotion out of the process.
There are two keys here: Be detached from the outcome, and always be prepared to walk away. You must detach yourself from the situation and imagine that you are watching this back-and-forth conversation as a third-party observer, someone detached from the outcome. There are no hurt feelings, embarrassments or awkward endings in this scene. If a salesperson gets angry, threatens to call the FBI on you, slams the door in your face, or calls you a lowly scum who preys on the weak, don’t take it personally. It’s a life lesson: don’t take anything personally. You never know what’s on someone’s plate.
build rapport
I saved the best for last. This is Social Skills 101, and it boils down to getting to know people. While you may want to remain emotionally detached from the deal itself, building a relationship means really getting to know the seller, which includes getting personal. A salesperson with whom you’ve built a genuine relationship will sell to you on a higher offer put forward by someone they don’t know.
There is no checklist or series of questions to cover when building rapport; It involves a natural flow of conversation. People understand hypocrites. I could title this section “Be a nice person and listen to others,” but that might be above my pay grade. Break the ice, ask questions about family, and find common interests and hobbies. Maybe you grew up in the same town, maybe their grandson is your daughter’s age, or they follow the same football team that you do. I usually don’t start anything about assets. I ask them how their week was, comment about the pictures on the wall, ask about their kids and what they’re up to, etc. I’ve met insincere, sly, crafty, alienated buyers before, and they are not pleasant to work with. A salesperson can tell who is just there for the house and who is really there to help.
This strategy, of course, works with other people you network with, including agents, probate attorneys, the lady at the pro desk at Home Depot, the title company rep, and nearly everyone else. You are the ambassador of your brand, and everyone wants to work with a true professional. The guy who asks you about your kids and remembers details from previous conversations will stand out. I remember when he texted me a week after I mentioned my son’s surgery to see how the recovery was. “What a nice gesture,” I thought. That man will get my business every time.
While a lot of this comes naturally, your business will do much better if you consciously work to build rapport. You can organize some of it—put birthdays in your calendar, make notes about kids/hobbies/interests/favorite team next to your salesperson’s name, and have your wife swap knees with the gym. You can write in your to-do list to follow-up about the surgery. , Put the extra effort into these interactions, and it will pay off a thousandfold.
The conversation should be 80 percent about them—and very little about you. If you keep talking about how good you are at this business, the salesperson won’t feel engaged. Instead, let them open up, answer their questions, and let them know you’re there to solve their problems.
- what are their concerns?
- what are their Fear?
- What is the plan They need?
- What is the plan They want?
Negotiation is a fine art honed by real world experience. I don’t know many people who are naturally gifted in this skill or who learned it by reading a hundred books on negotiation. Talk in front of people or on the phone and present yourself strongly to all nuggets, which will ultimately lead to a better yes as well as a more consistent yes. Becoming an expert negotiator will benefit you throughout your life, from real estate to buying your next car to dealing with agents and lawyers. Build relationships, gain trust, and solve problems by stepping up.
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Note by BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.
