This is an excerpt from Find deals and raise money By Anson Young.
So you’ll create a deal acquisition plan, and perhaps come up with a direct mail marketing plan for aspiring sellers. You put 1,000 miles in your car driving your new target area, and you found a good list of driving characteristics for the dollar. Now your hands are cramped by writing letters and you have a nightmare that you can’t get the taste of stamp glue out of your mouth. You have begun to get ideas for typical repairs. Pay the contractor to walk through some sample properties and take notes fiercely. To hone your skills, you have scrutinized 100 properties in the area and found the right high and low comps for the property you are targeting.
Then the phone will ring. It’s a seller. A real living person who is willing to sell on the other side of the phone. So what? Your palms are sweaty and your tongue weighs a hundred pounds with your thirst.
You are not alone. Many investors I talk to are laughing at the first few dozen phone calls. The phone rings and freezes. So what? One investor even said she threw her cell phone across the room when a potential seller called for the first time. This will start the actual work. You may not notice it, but the negotiations started before I picked up the phone. Now that you have them online, everything you say determines your future relationships and your potential for deals. No wonder I’m nervous!
You may be a natural negotiator — a phone expert and a master of those who love the subtle art of building trust. Again, you may be introverted and afraid of fights, car negotiations, or interactions associated with buying a home. Natural negotiators will have an easy time at first, but with some experience and motivation, both personalities will work for this business. The same principles work when negotiating large items as when negotiating small things. You sell them “yes” or “no”. Most of the same basic pillars of negotiation apply.
Let’s look at some of the basic foundations of negotiation that apply to all situations in which we find ourselves — real estate and beyond.
Overcome the fear of refusal
“Number.” No one likes to hear this little two-letter word. It may be the most powerful word in English. “No, you can’t raise that salary.” “No, we won’t partner with you on this deal.” “No” is accompanied by a completely negative psychology and we are always offended. I’m finding a way to mitigate that delivery so that it doesn’t. Asking no can affect how you approach similar situations in the future. There are two basic strategies for learning resilience in the face of refusal.
Go out into the world and reach number 10 as soon as possible. The more you can’t hear it, the more you get used to it. When I started real estate, I was knocking on the real estate door before the foreclosure. My first day contained 45 numbers, but not all numbers were created the same. There was no followed by Doaslam, no followed by the threat of hitting me, and of course, no followed by the threat of calling a police officer. The more you get used to bullying your neighborhood, the less emotionally you will be attached to the word. It’s just a business. You are not restrained over the cliff by your toenails, your family is not at risk, and your life is at a loss. If someone says no to you in real estate, you proceed to the next transaction.
Hone your skills and gaining Jesus will gain momentum. The more you win, the better you will be. The better you get, the more you win. As they say, success produces success. It is important to overcome the fear of refusal. That is, you will not hear enough times that the effect will no longer affect you. And it means building confidence in your abilities and listening enough times to start making money in this business. The more you agree with the seller, the more you internalize this situation or what worked in that situation, and the brain understands how to apply it to the next situation. A sufficient number of no experiences will ultimately lead to yes. And the more Jesus you hear, the more you will get.
The ultimate goal of negotiations is not just for you to win, but for everyone involved. “I’m here to learn how to get deals, close deals and get paid. That’s what it means to win.” Everyone I know in this business Ultimately, we all realize that to be successful in longevity, everyone needs to win. You are not trying to deceive or pull the seller. You are trying to help them. A perfect real estate transaction is one that benefits both sides of you leaving the transaction with the help the seller needs. If yes, you need to be confident that everyone is happy walking. If you are done correctly by people, it will always come back to repay you.
There is a saying in real estate. The goal is not to make money. It’s about solving the problem. If you can solve the problem, money will never be a problem for you again. In a win-win scenario, rewards are paid in both financial and non-concrete ways. You may be able to pull one to the seller several times, but it always comes back to bite you. Online reviews, BBB reviews, and worse, lawyers will eventually bother you. You may be able to obfuscate the numbers in a transaction, but your reputation will be shattered in the process. Creating a mutually beneficial 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 smooth guy in a nice suit jabber-continuously joking with an overwhelming speech at 1 mile per minute. You will be wrong. The best negotiators listen more than they speak. Sure, their speeches may be compelling and carefully verbalized, but they are strategically placed in the flow of conversation. Consider the 80/20 principle, where 20 percent of your efforts account for 80 percent of your success. This is true when talking to the seller. Aim for 20% and leave 80% of the story to the other party. There is an old saying, “The person who gives the price first loses.” Most negotiations have the idea of ”meeting in the middle” or “splitting the difference.” It’s a compromise between two given prices, and your job is to define where that midline should be. People usually don’t want to give more than they need or give less than they get, so they try to meet along the way. Being an active listener helps you improve negotiations and understand what you really need in your situation.
No, it’s not the end
It’s easy to tell yourself that it doesn’t matter if the seller rejects you altogether, but it’s hard to accept your feelings. The more you hear no, the easier it will be, but only if you use it to improve your bargaining skills in the long run. What could have been done in another way? Was that what you said? What did you not say? To be honest, you can do everything right and still get a big and fat no. When you spend time, effort, energy, and money to get a lead at the door, each no may represent $ 150 spent just to reach that point. No matter how hard you try, there are some things that you cannot control. Remember: It’s okay for seller Bob to say no to you next week. By then, if you’re consistently marketing, you’ll be talking to Jim, then Sally, and Susie, and that’s going on. Maybe you aren’t told eight times, but when you go to the ninth appointment, you get up and learn from those eight. You simply need to exclude emotions from the process.
Two keys here: separated from the result and always willing to leave. You should separate yourself from the situation and imagine that you are seeing the negotiations before and after this being separated from the results by a third party observer. This view has no hurt feelings, embarrassment, or annoying endings. Do not take it personally if the seller gets angry, threatens to call the FBI, slams the door, or calls it a low-living scum that preys on the vulnerable. This is a life lesson: take nothing personally. You never know what someone has on their plate.
Build a relationship of trust
I did my best to the end. This is social skill 101, in summary, to know people. You want to remain emotionally separated from the transaction itself, but building a relationship of trust means really knowing the seller, including being personal. The sellers you have a genuine relationship with sell to you with a higher offer made by someone they do not know.
There is no checklist or set of questions to cover when building a relationship of trust. It involves the natural flow of conversation. People feel dishonest. You could also title this section “Be a good person and listen to others”, but that could be above my salary level. Break the ice, ask questions about your family, and find common interests and hobbies. Maybe you grew up in the same town, maybe their grandchildren are the same age as your daughter, or they may be following the same soccer team as you. I usually don’t start anything about properties. I ask them how their week was, comment on the pictures of the walls, their kids and what they are crazy about. I’ve met dishonest, sneaky, clever, and disconnected buyers before, but they’re not just fun to work with. The seller can know who is there just for the house and who really helps.
Of course, this strategy works with agents, prosecutors, women at the Home Depot pro desk, title company representatives, and almost everyone else who is building the network. You are the ambassador of your brand and everyone wants to work with a real professional. Anyone who asks you about your child and remembers the details from the last conversation will stand out. I remember a week after talking about my son’s surgery, someone sent me a text message to see what the recovery was like. I thought, “What a wonderful gesture.” The guy gets my business every time.
Much of this happens naturally, but if you consciously work to build trust, your business will be much better. Some of this can be systematized. Put your birthday on the calendar, take a note next to the seller’s name about your child / hobby / interest / favorite team, write it down on your to-do list, and follow up to the gym about your wife’s knee replacement. .. Take this interaction one step further, and it will return you a thousand times.
The conversation should be 80% about them and little about you. If you keep up with how good you are in this business, the seller will not feel connected. Instead, ask them to open their hearts to answer the questions and let them know that you are there to solve their problem.
- what is it their concern?
- what is it their fear?
- What are you doing they need?
- What are you doing they I want?
Negotiation is an art that has been refined by experience in the real world. Few people are naturally talented for this skill, or have read and learned 100 books on negotiations. In front of people or on the phone, train yourself to all nos and eventually lead to a more consistent Jesus as you get better. Being an expert negotiator benefits you only throughout your life, from real estate to the purchase of your next car, dealing with agents and lawyers. Build trust, gain trust, and go ahead and solve problems.
Want to read more from Anson Young?check out Find deals and raise money At the Bigger Pockets Bookstore!