Real Estate Wholesaling

How to Harness Your Fear of Real Estate Negotiations to Get the Deal Done

Expertise: Personal Development, Real Estate Wholesaling, Real Estate Investing Basics
91 Articles Written

I have read, wrote, and discussed with many individuals the topic of wholesaling real estate. Many of the people that I talk with either have never heard of wholesaling real estate, they’ve heard of it but do not understand the usefulness of it, or they’ve heard about it and understand it, but have not taken action and facilitated a deal. Those of us who wholesale real estate all went through the dreaded psychology of the fear of failure, but what differentiates those of us who succeeded was we embraced the fear and did not let it cripple us.

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Before I go any further, I want to inform you that I’m not here to write about how to identify and overcome your fears. There are many articles you can read about fear and plenty of YouTube videos to get you motivated to take action. I would like to help you understand where you should have fear and how to channel that fear to get deals done.

If you ask anyone just getting started, their greatest fear is talking with sellers. I know this to be true because it’s always the main topic of discussion when talking with a newbie. However, after you get comfortable talking with sellers, the real fear is making the offer. Yes, even as I think about it, I can feel my adrenaline rising. This is the rush, this is the point of no return, this is the point where you potentially have a deal — or your the seller thinks you’re a blood-sucking leech.

The reason why this is so difficult is because after all the rapport building techniques you’ve utilized — i.e. having similar interests and the same favorite sports team — now you have to present an embarrassing offer that can destroy everything you’ve built. This is not always the case. Negotiating the deal is where you honestly learn if you can be successful at this business.


The Art of Negotiating

Many people have the misperception that if “I” don’t get what “I” want, “I” lose. This is absolutely not the case and should not be the premise of the negotiation. Starting with “I” is when you lose. Always think of the needs of the seller, and reintroduce those needs back to the seller so they are on their mind. Never think of your needs first. Instead, remember you do have to make sure you negotiate a deal.

Personally, the negotiation is the time I gauge my personal growth. Every seller will have an objection (if not, you better jump for joy), and it’s up to you to understand what the seller is objecting to. Do not assume the objection is always price — because it’s not. You need to find out what the true objection is.

Negotiations begin in the initial conversation. You are listening for key indicators that you’ll be able to use in the future to help position yourself and the seller. Normally, if you give, you will get. Before making your offer, take a moment to embrace the fear of making the offer. At the same time, be confident you’ve done concise analysis on the property. Then make the offer with confidence.

Confidence is the key. A seller is able to gauge your confidence level and immediately object/reject your offer if you don’t communicate your position strongly.

I use the method of maximum allowable offer (MAO) and minimum justifiable price (MJP). This is simple — what’s the most you can pay for the property and it still be a deal? Which is your worst case scenario (MAO), and what’s the lowest amount you can pay (MJP) that is beneficial to you and still beneficial for the seller?


Strategic Positioning

When presenting a low offer, you may add a higher earnest money deposit, or you can have a higher offer with no/low earnest money deposit. This is just an example, so utilize every aspect of the transaction as a piece to negotiate with. As in the game of chess, you may need to sacrifice a pawn to gain the queen. Still, the end goal is to have all parties satisfied with the terms of the agreement.

Many negotiators believe it’s all or nothing. This is the closed-minded theory of a terrible negotiator. You have to remember, the deal is not done at closing. The deal should never be done — because your goal is referrals. To truly gauge if you have done a great job with the transaction, you’ll want to know both parties are willing to speak highly of the other afterwards.


Remember, the fear of making your initial offer is something you should embrace. Those emotions at that moment are your benchmark. Every negotiation going forward should become easier to navigate. You should be able to position the negotiations in a way that you are the facilitator, and the sellers are following your recommendations.

Here are just a few things you need to know before negotiating:

  • Sellers personality type
  • Your personality type
  • Seller needs versus seller wants
  • Timeframes
  • How to handle objections

Can you think of any other things a wholesaler needs to know before tackling a negotiation? How did you overcome your fears of negotiation?

Leave your comments below!

Marcus Maloney is a value investor and portfolio holder of residential and commercial units. He has completed over $3.3 million in wholesale transactions. Currently, Marcus is a licensed agent who wholesales virtually in multiple states while building his investment portfolio. He has also converted some of his deals into cash-flowing rentals. Marcus holds seven rentals, two of which are commercial units. He’s even purchased a school, which was converted into a daycare center. His overall goal is to turn what is a marginal profit into a significant equity position. He leverages the equity by using the BRRRR (buy, rehab, rent, refinance, repeat) strategy to increase his portfolio without any money out-of-pocket. Marcus has been featured in numerous podcast such as the Louisville Gal Podcast, The Best Deal Ever Podcast, The Flipping Junkie, and many others. He contributes content regularly to his YouTube channel and blog.

    Brian Gibbons investor from Sherman Oaks, California
    Replied over 3 years ago
    Nice Marcus! Negotiating – presenting – closing are the “high touch” “soft skills” of real estate investing. I focus on 5 steps with the seller. 1. Rapport Building – Family, Occupation, Job, Travel 2. Verbal Upfront Agreement To Decide Today – Yes or No but no maybes or let me think it over. 3. Discovering Motivation, asking questions about previous sales attempts, how they feel about agents, property managers, what is their time frames of NEEDing to sell. 4. Price, what will they do the money, some money now and some later. 5. What if step – “What if I could find a way to get your PITI covered for a period of time, say 36 to 48 months, then pay your existing financing loan bance off completely, would that be something to talk about or maybe not?” Best trainers in Negotiation: Roger Dawson, Tom Hopkins, Zig Ziglar What all business people need to internalize is this: If you believe you can, OR you believe you can not, YOU ARE RIGHT!
    Marcus Maloney rental_property_investor from Queen Creek, AZ
    Replied over 3 years ago
    Brian, as always very valuable response, I would like to at Grant Cardon to list of great trainers. I haven’t read anything by Dawson, or Hopkins, but Zig is the master for sure. I follow those same steps. I also make sure I inform the other party that we (I) like to make sure all parties get what they need. Most negotiations stall because of focusing on wants. Great imput as always, thanks for the contribution.
    Steve Vaughan rental_property_investor from East Wenatchee, WA
    Replied over 3 years ago
    Excellent, Marcus! It definitely gets easier with time. I would just add that not all buyers need to come in at 70% of FMV. For decent properties needing only lipstick, us buy and holders will pay 85%+ for cash/conventional or 90%+ with favorable seller financing. May increase significantly your profits, your MAO and deal flow. Have multiple buyer types and multiple tools in your negotiation toolbelt. Cheers and thanks again!
    Marcus Maloney rental_property_investor from Queen Creek, AZ
    Replied over 3 years ago
    Awesome perspective Steve the more tools the opportunities. “Enjoying the Journey”
    Dr. C.J.H. Dorsey from Las Vegas, Nevada
    Replied over 3 years ago
    Happy to read these comments…I am in the confidence building process, so these words of guidance are certainly welcomed!
    Marcus Maloney rental_property_investor from Queen Creek, AZ
    Replied over 3 years ago
    Dr. C.J.H The best way to boost your confidence is to take action, I understand each process is calculated but the best lessons are learned from action. Thanks for reading and I believe you have the confidence you need. “Enjoying the Journey”
    Michael Sadler from Edmonton, AB
    Replied over 3 years ago
    Thanks! I think that it’s also great to identify the sellers interests and build alternative solutions that can accommodate them. This can be a solution to having to raise your price for each objection that you hear.
    Marcus Maloney rental_property_investor from Queen Creek, AZ
    Replied over 3 years ago
    Michael, Great point, I actually did this today, the seller had objections and I provided them with alternatives versus trying to solve the problem. We did not make a price adjustment just a philosophical adjustment and it got us the deal. Again great point never use the price as your tool to please the seller. “Enjoying the Journey”
    Danny Carter investor from Los Angeles, California
    Replied over 3 years ago
    Great read!! Hopefully you inspire the next generation of wholesalers. We definitely need more great ones in the market.
    Marcus Maloney rental_property_investor from Queen Creek, AZ
    Replied over 3 years ago
    Danny, Tell me about it some of the new people in my market I’m not sure what they were taught but it wasn’t right. Just like us all starting was difficult but we made head-way and because proficient at what we do. “Enjoying the Journey”
    Madison Adams investor from Nashville, Tennessee
    Replied over 3 years ago
    Awesome post Marcus. I was taught if you aren’t a little embarrassed to make the offer, your number is probably to high. REI is not a hobby, it all comes down to the numbers. Show empathy for what they have going on and resolve their issue if it can be a win-win situation for all parties involved.
    Marcus Maloney rental_property_investor from Queen Creek, AZ
    Replied over 3 years ago
    Madison, Very well put, solve the problem but don’t make the problem yours. Provide guidence and more than likely you will be successful. “Enjoying the Journey”
    Michael Nicholson from Seneca, South Carolina
    Replied over 3 years ago
    Marcus I really enjoyed this article. I think I could use some help learning about negotiation and how to go through that process. Are there books, podcasts, or educational materials/blogs that you would recommend on this subject? thanks!