10 Tips for Negotiating Like a Pro

10 Tips for Negotiating Like a Pro

4 min read
Craig Curelop

Craig Curelop (aka the FI Guy), is stationed in Denver, Colo., and is a real estate agent, investor, author, and employee of BiggerPockets. He is primarily known for taking a very aggressive approach toward achieving financial independence.

Experience
Starting with $90,000 in student loan debt and a negative $30,000 net worth in 2017, Craig used various tactics to make more, spend less, and invest the difference wisely to become financially independent 2.5 years later in 2019. In over 50 articles, Craig has written about all of these strategies and more on the BiggerPockets Blog.

Craig’s story has caught the attention of media outlets like The Denver Post and the BBC and many real estate/personal finance podcasts, including ChooseFI, Side Hustle Nation, the Best Ever Real Estate Podcast, not to mention a repeat guest on the BiggerPockets Real Estate (#252 and #350) and the BiggerPockets Money (#35 and #95) podcasts.

Craig has read hundreds of books, listened to thousands of podcasts, and talked to thousands of people in the real estate and personal finance community. With all of the knowledge gained, he was able to write a book called The House Hacking Strategy, which is the perfect blend of real estate and personal finance.

Over the past 2.5 years, he has done three house hacks, a flip in Jacksonville, Fla., and lent on a condo-conversion in Boston, Mass. He is now looking to step up his real estate game by doing BRRRRs in Denver and other areas.

Education
Craig earned a bachelor’s of science in Business Administration with a concentration on Finance and Management Information Systems while minoring in Economics at Northeastern University.

Accreditations
Real estate broker in Denver, Colo.

Follow
LinkedIn
Instagram @thefiguy

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If you are going to be a successful real estate investor, you are going to need a lot of skills. You will want to learn how to find deals, how to analyze them, how to handle contractors, how to manage properties, etc. But there is one overarching skill that, if mastered, will allow you to be better at all of the aforementioned facets of real estate investing.

This one skill can turn a dud into a deal and is likely the highest-valued skill anyone in real estate investing has. Can you guess what it is?

You got it! Negotiation. 

By negotiating the price of a deal, the cost of contracting work done, or the terms of a lease, you can turn an OK deal into a great one! So, in this article, I am going to highlight 10 tips on how to negotiate like a pro. 

With that, let’s get into the tips! 

10 Tips for Better Real Estate Negotiation

Tip 1: Research

The first and most important thing you should do is conduct research. If you are going to make an educated offer or counteroffer, it will always help to come back with statistical facts. This could be in the form of market data, neighborhood data, or even buyer/seller data.

That may not be enough though. After you have gathered this information, go a step further! Ask your agent to pull comps from the MLS, drive the neighborhood, talk to neighbors, look up the buyers/sellers on social media, and so on. Dive deep!

Tip 2: Build Rapport

Once you have done your research and feel comfortable you know enough, enter into the conversation. The most important thing at this stage is to build rapport with the buyer/seller.

People like to do business with people they like. So, make sure that your buyer or seller likes you! Treat them like a friend or co-worker. Actively listen, be empathetic, and put yourself in their shoes. By actively listening, you can respond with thoughtful open-ended questions that will not only show that you care but will also invite them to reveal their motivation for selling the home.

Pensive young entrepreneur looking at laptop screen and drinking coffee at table in cafe

Tip 3: Analyze Your Position

Now that you have market data and have developed a relationship, you can figure out what position you are in. Does the buyer/seller REALLY want to do a deal? Or are they in no rush, just testing the water?

Let’s assume you are the buyer here. If your seller is just listing their property to see what they can get but aren’t hurrying to sell, you do not have much leverage. However, if something just happened—divorce, death in the family, job relocation, etc.—they may want to move quickly! If that’s the case, you will have more leverage and negotiating power.

Tip 4: Define Your Offer

Typically the price is the most important piece of the offer. If you have ever read Never Split the Difference by Chris Voss, you know to not ever use round numbers. Why? Because when you use an odd number, it makes the seller (or buyer) think that you are putting your best foot forward—giving all that you can give.

After price, other negotiating items are terms and contingencies. Who pays the closing costs? When is the closing date? How much earnest money do you put down? Are there financing or inspection contingencies?

You want to extend the offer that most benefits you first, because you never know what they might accept. Let them work you down!

Tip 5: Offer With Conviction

Now you know the terms that you want to offer. What happens when it comes time to actually making the offer?

The most important thing is that you need to be confident when presenting it. If you can, meet face to face and present your offer in a calm but convincing manner.

Let them say no! That’s OK. If they don’t agree, figure out what they are pushing back about and work with them!

Related: 11 Items You Can Negotiate in a Real Estate Deal

Tip 6: Get Creative

Oftentimes, price is not all that matters. If they are not budging on price, maybe you can negotiate other parts of the deal. Get creative!

Maybe if you offer a higher price, you’ll get to keep some of the staging furniture. If you are an agent, perhaps you could reduce the commission that you keep on the transaction. There’s really no limit to the ways you can make a deal work through creativity.

Tip 7: Embrace the Sound of Silence

When presenting your offer, whether it be in person or on the phone, do not be afraid of the “awkward silence.” In fact, embrace it!

See just how long you can stay silent. Who breaks first? It better not be you!

The genius in using this tactic is that silence is uncomfortable. It gives the seller/buyer the feeling that you may not be happy with their offer (or counter) and will likely require further negotiations.

work study apprentice mentor

Tip 8: Create Some Friction

If the seller or buyer presents you a counteroffer, don’t be afraid of creating friction. Pretend to be insulted.

Related: The 3 Things to Remember Before You Negotiate a Real Estate Deal

Tip 9: Don’t Be Afraid to Walk Away

When in a negotiation, always keep in the back of your mind that you can walk away. You can’t be afraid to actually do so.

If you listen to BiggerPockets podcasts, watch the webinars, or have read any BiggerPockets books, you’ll know that you should never invest with emotion. In many cases, buyers/sellers are emotionally attached to the property and make illogical decisions. Never get emotional.

Do not be afraid to walk away. If you put yourself in a position where it seems like you never truly want it, then you’ll have much more negotiating power.

Tip 10: Practice

The last and final tip is to practice! Like the old saying goes, “Practice makes perfect.”

The best athletes practice every day. The best salespeople practice new selling techniques. The best negotiators—yep—practice negotiating!

This weekend, go down to your local flea market. Negotiate the price of some items you want to buy. Or next time you are at a yard sale, practice! Any moment you can, practice negotiating—even if you don’t care about the price!

Just get comfortable and accustomed to the idea of negotiating. That way, when it comes time to actually negotiate, you know exactly what to do.

Conclusion

That’s it! There are 10 pro tips on how to negotiate better deals as a real estate investor. If you want to learn more about how to negotiate the best deal possible, J Scott and Tarl Yarber will dive into the details this Thursday, October 24th at 7 p.m. EDT/4 p.m. PDT. Register here

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Have you used or heard about any other powerful negotiating tactics? 

Share below!

Successful real estate investors know how to find deals, how to analyze them, how to handle contractors, how to manage properties, etc. But there is an overarching skill that allows one to be better at all of the aforementioned facets of real estate investing: being an effective negotiator. Learn how here.