The old adage is everyone is a salesperson whether they know it or not.
When you were a young child you sold your mom on the idea you needed ice cream, when you were older you sold your friends on what you were going to do after school together and when you became an adult you sold someone on hiring you, on dating you and so on.
Your life ends up becoming an ongoing negotiation and when it comes to Real Estate negotiation becomes even more important.
The big difference when it comes to being a successful Real Estate investor is negotiating without emotions. It simply comes down to the numbers and what works.
Negotiations Aren’t Necessarily Fair
When you’re trying to buy a house or work out an issue with a tenant often times the negotiating doesn’t seem fair.
It may not be that one party is trying to take advantage of the other (although it can be the case), it may just be the two parties may have different expectations.
The home seller may have memories and emotions tied up into selling their family home while the investor may only be looking at the dollars and cents of what it will generate for revenue and at what point it’s not worth while to purchase.
If the gap between the two numbers is too significant, it simply won’t work. It’s not that it’s not fair, it’s that reaching an agreement that works for both parties is simply unachievable. Unless one party changes their goals.
To Win A Negotiation Both Sides Need A Win
We constantly hear about shrewd negotiators and how people won big at the negotiating table, but for a true win, both sides need to benefit, or lingering resentment creeps up over time.
If you have the mindset that you have to win at all costs, you’re probably not going to like where this article is going. You see, I believe both sides can win.
Creating a fair negotiation (within reason after all, just because a tenant wants a swimming pool installed doesn’t mean you should install one…) where both sides creates an environment where you may not win everything at once, but you open the door for future wins.
That home owner who sold you his home and who believes you treated him fairly may refer his other buddy to you as well for a fair deal.
That tenant who you didn’t raise rent on, but who now maintains the yard for you as part of not raising the rent is a little happier with you as they didn’t have to move.
If you can establish wins for both sides it makes moving forward that much easier.
Would You Like To Be A Better Negotiator?
I’ve been a sales person, a negotiator and a deal maker for decades now. I’ve learned a ton over the years about how to not just negotiate, but how to ensure the majority of the time both sides walk away happy (maybe not always happy, but at least wiser?).
Funny Side note – I recently visited an old boss and he reminded me of one of my “negotiating tactics” I had for more difficult clients. I was in the computer wholesale business for a long time and had to deal with some shrewd business owners and some bullying business owners.
One particular bullying owner who was known for pushing the boundaries asked for a price on a product. I can’t remember the exact number I quoted but say it was $35, now we don’t typically negotiate on a one off order in wholesale as there wasn’t a ton of margin, but he came back and said he would only pay $30.
So I countered, and said ok, $40 then.
He informed me I wasn’t allowed to make up a higher price when negotiating and I told him if he could make up a lower price, why couldn’t I make up a higher price.
To make an already long anecdote shorter, he hung up on me and ended up calling my boss to complain and once he calmed the client down ended up selling him the piece for the original $35.
Although the client was initially upset, moving forward he bought a lot of computer equipment from me and understood that while I would work with him, there were negotiating boundaries.
I can’t even count how many times I’ve used a variation of this tactic with everyone from my kids to tenants to business clients. The kids ask to stay up until 11 to watch a movie, I counter with 10:30, they insist on 11, I counter with 10 and suddenly 10:30 becomes agreeable.
A tenant asks how much is the rent, I say $1,100, they counter with will you negotiate and I say sure I’ll take $1,200. Suddenly $1,100 looks good.
Sometimes it’s just fun to negotiate!
When you’re negotiating from a business standpoint you need to set your boundaries. What the most you can pay, what the timeline might be and what works for you.
If you can narrow those down and align them with the individual you’re negotiating with you can both win. And that will ultimately make you a better negotiator!
I’ve been tossing around ideas for additional courses to create to help more landlords and I’m wondering if a Real Estate negotiating course would be of interest to anyone?
I could potentially do a two hour online workshop walking landlords through negotiating property purchases using many of the negotiating strategies I’ve learned through my experience and courses I’ve taken to improve my sales skills.
Or I could create a multi part online course similar to my Screening Tenants Course that has not just lessons, but incorporates videos and downloads to help you out.
Leave me a comment, let me know if this might interest you and we’ll see where this takes us. Or alternatively leave a comment telling me what you’d like to learn more about for either upcoming articles or future courses!