I like to think of Type A personalities as a piece of rope. Pushing them won’t get you anywhere, and fighting with them will only create a tangled mess. If you want to get rope somewhere, you’ll have to pull it.
Many of the people you’ll come into contact with in investing have Type A personalities. They tend to be very successful in business and negotiating and are usually relentless in their pursuit to win. It will be you against them when making deals.
What is a Type A personality?
According to psychologists, Type As are impatient and very competitive, and they view the world through a “dog eat dog” mentality. If you want to win against Type As, you need only to focus on their impatience and competitiveness. You have to turn their biggest strengths into weaknesses and gently pull them where you want them to go.
I used to have a hard time dealing with Type As. They were relentless and oftentimes wore me down. I am Type A myself, so I put up a good fight, but you only have so much energy in a day. Instead of constantly wearing myself out, I decided to study Type As so I could learn how they worked.
My current strategy came together when I read Thinking Fast and Slow by Daniel Kahneman, winner of the Nobel Prize in economics (psychology of decision making). One of the things that really hit home was the concept of the two sides of our brain (analytical and emotional). Lucky for us, type As tend to focus on the emotional side of the brain, which is, according to Kahneman, “lazy … impulsive, impatient and keen to receiving immediate gratification.”
Winning is immediate gratification; it’s the fuel that keeps Type As going. The beauty of “winning” is that it’s relative and has no set standards. Winning a soccer game might mean three points, while a basketball game might mean forty points. To a Type A, points don’t matter. All they want is the glory of beating the other team. This is their greatest weakness, needing to win. The only way to pull them is to let them win the game.
Real Life Examples
I had a deal recently where I was warned about a buyer who was very aggressive and prided himself on being able to talk anybody down on price. A definite Type A. The seller told me the price and terms range he was willing to accept, and I told him I would get it. He actually laughed at me.
When I called the buyer and told him the value of the property (quite a bit higher than the top of what the seller wanted and what it was worth), he proceeded to tell me the price was too high and cited a whole host of made-up data. Slowly, I agreed and lowered the price. Once the buyer got down to the top price the seller wanted, I congratulated him on his negotiating skills and asked what he could give us as far as terms, seeing as how he had “won such a good deal.” Not only did we get the top price, but he also gave us a better interest rate than we expected. He won (getting the price down), but I created the rules (starting price) of the game.
Winning is relative to the situation at hand. You simply have to create a situation where them winning means you get everything you want. Remember, the emotional brain is impatient and wants immediate gratification. This excludes going home and running comps to know what a property is really worth.
A few months ago, I had another deal where a Type A real estate agent was trying to get my sellers down on price during inspections. She was the most relentless person I had ever met. I was impressed and knew I needed to quickly redirect her efforts away from me. So, I told her I understood her concerns about the price (I conceded and she won the argument). A few hours later, I let her know that I had set up appointments for a few more buyers to come look at the property. I changed the game from her against me to her against “other buyers.” In order to win, she now had to accept the house without repairs or take the chance of losing it to someone else. And since she had been working with these buyers for six months (Type As are impatient), I knew she would direct all of her efforts towards what I wanted, which was getting the buyers to accept the house as is. That’s exactly what happened. She won the game, and we got everything we wanted.
I had another situation where a listing agent was offering a low buyer agent commission if the buyer’s offer wasn’t what he wanted. Definitely a Type A. I checked online and noticed the house had been on the market for a couple of months. I knew I needed to tap into his impatience. So, I sent him an email with the paperwork to change the commission that said I wouldn’t have time to show this property if he didn’t send the signed papers back to me by the end of the day. The only way to win in this situation was to sign. I got it back in about twenty minutes, along with an appointment time.
After seeing the property, we put in a low offer. I knew he would try to fight us on the price, so I knew I had to play on his impatience and need to win from the beginning. So, I made the offer expire four hours after he received it and told him I had already sent out another offer to be signed as soon as this one expired. The only way to win in this case was to direct all of his efforts towards his clients and convince them to take the deal. I gave them no time to negotiate because he would have tried to wear me down. He got it signed in just under two hours.
On another transaction, I turned in a repair list (not cheap) for the sellers and another repair list that the buyers were going to do once they moved in. The buyer’s list was probably cheaper, but it was very long. I do this on purpose. Remember, winning is relative and not based on actual numbers. As a Type A, he tried to fight us on the seller repairs by rejecting some of the items and offering us a little money for the others. He was doing what I expected under the circumstance, so I let him win and agreed with his reasoning about not wanting to do some of the repairs. Then, I asked him if the sellers would rather do the other list instead; maybe that would make more sense to them. Since one list was much longer than the other, winning meant doing the smaller, more expensive list (original list). When we got off the phone, he was very happy he was able to get the smaller list, and within an hour, the sellers also agreed. Again, winning is based on the situation. Change the rules, and you change the definition of winning and who the Type A directs their efforts on.
After a lot of practice, Type As are now my favorite people to negotiate with. They have a lot of energy and skill that can be easily directed in your favor if doing so means they “win.”
What are your strategies for dealing with Type A personalities during negotiations?
Let us know with a comment!
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.