Today I was reminded of a very important principle.
I had scheduled an appointment with a garage door company to do some repair work on my garage door. The technician looked at the work and told me the parts and labor would be $200.
Being that I’m a cheapskate, I had no intention of paying this company $200 for this particular fix. I immediately looked up the parts online and informed him that he was over-charging me for the job. I very politely began to bargain with him to get the work done for $100 (half of what he had quoted me).
Sure enough, he agreed to my proposal with very little haggling and proceeded to complete the job for me for half of his original quote.
Asking Oftentimes = $$$
Had I not been in the mood to engage this technician, I very easily could have agreed to the $200 initial quote and not thought anything about it.
However, with just a little bit of effort on my part, I was able to save myself $100 dollars.
The notion of simply asking for something is oftentimes overlooked or under-appreciated in the real estate world. In reality, it doesn’t cost a lot to ask for better terms, a better price, more time, more concessions, etc. … but the simple act of asking can potentially payoff in big ways.
Another example of this occurred today when my acquisition manager informed me that he had negotatied the purchase of a very nice property for $150,000. After I looked at the comps and studied the repairs needed, I decided I really didn’t want to pay more than $145,000 for the property.
Having already signed the contract, my acquisition manager was hesitant to go back to the seller and ask for this price reduction. Again, you don’t know unless you ask. Sure enough, the seller agreed to our reduced price of $145,000 …. a $5,000 dollar savings! The simple act of asking literally put an additional $5,000 in my pocket.
There are so many different ways that this principle can play out for a real estate investor. Here are just a few examples to help get your creative juices flowing:
- When a seller doesn’t accept your price, ask them to do seller financing.
- Ask a seller to include items like furniture, appliances, fixtures, etc. in the sale of the property.
- Ask a seller to allow you to make repairs before a property closes to save money on holding costs.
- Ask the seller if you can assign the contract.
- Ask a seller to extend closing so you can continue to market for an end buyer.
- Ask a seller to reduce the price because you found additional repairs, mold, damage to the property, etc.
- If the buyer or seller is haggling hard on a deal, ask their agent to chip in some of their commission to make the deal work.
- If you are using an agent, ask them to take a reduced commission for volume, or allowing you to do some of the work.
- Ask the buyer to get their appraisal and due diligence done in a shorter amount of time.
- Ask the buyer to use your preferred lender and closing attorney/title company.
- Ask your contractor for a volume discount, specific completion dates, detailed receipts, quality workmanship, warranties, etc.
- Ask your property manager for tenant placement discounts, waived fees, etc.
Again, these are just a few examples of how a real estate investor can benefit from simply asking the questions. Granted, it’s important that you read the situation and ask for appropriate concessions from others … but don’t be afraid to hear the word “no.”
In the end, you may be selling yourself short simply because you didn’t ask.
Is there something you’ve gotten out of simply asking?
Be sure to share it in the comments below!