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The Art of the Deal: The 3 Most Important Negotiation Tactics

Negotiation is like a game of chess.

Even if you’re just a casual player - or you just like to watch - the game is all about strategy


Chess is a little like a dance - each player goes back and forth, each move pivoting the game in a different direction, and each game having a different outcome.


And because there are so many outcomes that can occur, becoming a master at the game allows you to anticipate moves well before they’re made.

It’s the same with negotiating– it takes time to master the art of arranging a beneficial deal–but once you master it, the entire playing field is visible and to your advantage.

I certainly didn’t start out as a master negotiator.

In fact – unless you’re a real estate unicorn – no one starts out as a master negotiator. And even the best negotiators still had to learn how to hone their skills.

Much of what I know now, I learned from my own mistakes during my real estate investing journey. Thankfully, what I did learn helped kick-start my negotiation skills, and helped me discover the 3 most important tactics to use in any deal.


#1 – Timing is EVERYTHING

When I first got into real estate investing, I made a LOT of mistakes. And the most valuable thing I learned from all those failed transactions?


Timing.


Timing is a critical component in wholesale real estate investing, and the best time to approach a seller when negotiating is on the last day of the inspection period.

Why?

Because sellers at this point are either stressed they will fail the inspection and don’t want to negotiate yet, or are adamant on their housing price because they are certain their home is perfect…


Either way, they are often not open to negotiations yet.


In contrast, sellers are emotionally ready to negotiate at the end of the inspection because they’re ready to be done with the overall process.


They’ve started making plans for when the deal is over - what they’ll use the funds for, what they’re going to do with themselves, and whatever their next step afterward is going to be.


Now, this is absolutely not the time to try and nickel and dime a seller, rather offer an honest price for what the house is worth…


Your job as an investor is to help the seller or the real estate agent who represents them find a price that is compatible with everyone involved and that reflects the market pricing for that area.


#2 – Always Follow Up

You might not think that following up with a lead counts as a negotiation tactic, but it is.

Here’s why:

Often when you find a property – especially if it’s on the MLS and has been listed for more than a month–it will be overpriced.

Sellers are trying to get as much as they can for their home; not only does that make perfect sense, but it’s perfectly okay!

People are attached to their homes – they grow up there, fall in love there, raise children there, and experience any other number of pivotal milestones in their home. It’s only natural for there to be an emotional context driving any initial price they set.

So if you first speak to a seller and they’re insistent on a high price you cannot offer, thank them for their time and ask if you can follow up with them.


And then actually follow up!

Call them back, remind them of who you are and why you’re calling, then check up with them on how selling their house is going.

In a lot of cases, the seller will be open for negotiation–especially if they’re racing against the clock for a move, a sudden change has happened in their lives, or once they realize you actually care.

Aren’t sure what you should say?

I’ve already prepared a script for you:


You would be shocked how often a seller will reconsider just from you taking ten minutes out of your day to follow up with them.


This is why following up - whether it’s with the seller or an agent - is such an important negotiation tactic.



#3 – Negotiating with Real Estate Agents


Real estate agents–like timing–are essential to our work as investors.


In fact, they are such a critical aspect of our business, I actually created a method around speaking and working with them called Agent Outreach.


Agents can deliver mounds of information on a particular property, as well as several others that they - or their colleagues - might be working on.


Which makes them the perfect lead-generation connections.


Negotiating with real estate agents can often begin with education - wholesale real estate is an unknown strategy for many, so be prepared for a lot of questions about wholesaling and investing in general.


A concern agents might have is how they will earn their commission during an investor deal.


I negotiate these conversations by first letting the agent know the type of houses I’m interested in - personally, I want the ugly houses they have trouble selling.


Once they’re aware of what I do, I explain how I’m able to help them by fixing the houses up, making it easier and more profitable to sell.


After that, I'll ask the agent what their commission fee is–I will always add this to my numbers, so it’s automatically included.


Once the deal is done, the end result should be the seller getting the amount they wanted, I’m able to make an assignment fee, and the agent receives their commission.


It’s the combination we always strive for - a win-win-win situation.


Learning to negotiate effectively and confidently won’t happen overnight - trust me, I know. Once you’re able to hone this skill, however, you’ll find your deals and conversations go further than you imagined.


If you want to learn more about the art of negotiation, check out the video down below–it’s an oldie, but a goodie:



As always, if you want even more negotiation tactics, agent outreach, lead gen help, and more, join us in AstroFlipping.

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