Amazing Deals

Six Clever Negotiation Tactics to Lock Down Your Next Real Estate Deals

As a real estate investor, you will spend at least some of your time actually buying properties. The rest of the time, you might be rehabbing a property, or marketing a home, or inspecting potential purchases. However, there will be at least some buying involved. This means that you will be dealing with sellers (or their representatives, at least). The seller is going to try to get the best price possible for the property and it is your job to negotiate it to the lowest price agreeable to both parties.

This is where many investors run into trouble. Chances are good that even if you have many successful sales under your belt, you could have gotten those properties for less, and maximized your return even more. Of course, negotiating is as much an art as it is a strategy, and it can be difficult to gauge which sellers will respond better to which methods. We’ll cover some of the most effective negotiation tactics below.

Take Small Bites

It’s tempting to ask for everything you want all at once. It’s definitely faster, but you will find that it isn’t particularly effective. The problem is that you come across as demanding, and the seller just doesn’t want to deal with that. You’ll get better results if you ask for things here and there, slowly, over the course of the negotiations. This can do two things. First, and hopefully what you’ll find in your own experience, is that it actually works to condition the seller to say “yes”, rather than “no”. Second, it can wear them down. You do run the risk of annoying the seller, but it can be effective.

Offer Something in Exchange

Sometimes, getting concessions from a seller is as simple as offering something they want in exchange. This is pretty much the basis of all human interactions in one way or another. It’s even the basis for employment today – you give an employer your time in exchange for something you value, money. What does the seller want, and is there a way to give it to them without coming out the loser in the negotiations? Is there a way that both sides can win? Believe it or not, there is such a thing as a win-win in real estate investing. You just have to find out what is of value to the seller and whether or not it’s something you can part with.

Dig Deep for Intelligence

Being a successful real estate investor means that you need to be very good at ferreting out information that the seller might not really want you to know. For instance, just how motivated are they to sell? If they’re very motivated, what’s the reason? Are they on a firm timetable to be moved to the other side of the country and have to sell before the move? Is there something else at work? Find out what the seller’s motivation is and then play to that. This is particularly true when you’re competing against other investors for the same property.

Be Silent

Silence can be comfortable, or it can be uncomfortable. If you’re comfortable with it, use it as a tool to move your negotiations in your favor. Suppose the seller makes you an offer. Instead of replying either in the positive or the negative, you don’t respond at all. You remain silent, and say nothing. That silence stretches out, and the seller becomes uncomfortable. Perhaps they think they’ve offended you, or that you’re angry about the price they quoted. There is a chance that they’ll budge based on being uncomfortable. Of course, there’s also the chance that they won’t budget, but remember – nothing ventured, nothing gained.

Disarm the Seller

Most sellers are as on edge as you, the buyer, are. This can lead to stalled negotiations. You can turn the tables by disarming the seller. Be humble and agreeable. Point out the things you like about the property (but don’t give ground on your demands). You might be surprised at how much you can gain simply by being nice, rather than being combative.

Walk Away

The final tip is to just walk away. Chances are good that there are similar properties elsewhere in the same area. The seller probably knows this too, and if they see you walking away, they’ll be motivated to at least meet you in the middle.

With these tips, you should find your negotiations are simpler, easier and come out in your favor more often.