Property negotiating is arguably the most important skill in a property investor's arsenal.
But for me property negotiating is not about beating the seller down to the lowest price possible...
It is about creating a win / win outcome for both parties.
By aiming for this outcome, you will be far more likely to get the deal... and get a good one.
In this article, we'll show you how this can be done, using some killer tips, tricks and tactics. There's a free download for you... And I'll even introduce you to my pet frog!
I always used to believe that a property negotiating was something that had to happen in a single exchange -- a phone call or a meeting -- and then it was over and done with.
Some of the best investment property negotiations happen over a period of days, weeks or even months.
Why? Time makes people more negotiable.
The only proviso here is that if you sniff an incredible deal that could be snapped up by someone else if you delay, then lock it down without delay!
There can be a temptation -- especially if you are dealing with lots of enquiries -- to dive straight in to the negotiation.
This is a recipe for disaster!
Why? Because there are two things you must do first:
Before you start to negotiate, you need to find out what the seller's goal is. This is imperative if you are going to end up with a win / win outcome. There is no way you can do this without knowing what their endgame is. For example:
In addition, you can use their desired result later on in order to motivate them to accept your suggested offer... "Just suppose I could buy your house so that you can move to Australia and be with your family...".
One of the most powerful tools of property negotiating is silence.
I am introspective so naturally a good listener. I love to let talkative sellers just talk and talk until they run out of steam.
I have lost count of the number of times that I've done this and the seller has just come out with: "The lowest I'll accept is £x for the house" or "I'm just looking for enough to pay off the mortgage and cover my costs".
Here are some rules of property negotiating that will serve you well if you stick to them!
The classic is where they haven't listed with an agent yet. If they are not super motivated and haven't listed yet then I always say -- list it and see how you get on but come back to me if that doesn't work out.
In a property negotiation, there are a number of tactics that you can use time and again, to great effect...
Note that this can be used to buy time even if you do not intend to change your position at all!
Someone else gets the blame and you retain your good relationship with the seller.
An offer that is a straight round number, like £120,000 is just screaming out to be countered.
But go in with something like £123,750, and the seller will think: wow, this guy / gal has put a lot of thought into this and knows exactly what they can pay for my house!
They will be a lot less likely to push back on you.
If you do have to make concessions, then make each successive one smaller. For example:
Offer 1 = £123,750
Offer 2 = £124,750 [£1,000 more]
Offer 3 = £125,500 [£750 more]
Offer 4 = £125,750 [£250 more]
This communicates that you are getting closer and closer to your limit. If you just increased by, say, £1,000 each time, why wouldn't they just keep pushing back?
So, we've seen that by using a few simple property negotiating tricks and strategies, you can end up winning great deals... and more of them!
If you want to learn more about negotiating in general, a great book on the subject is "Bare Knuckle Negotiating" by Simon Hazledine.
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