Scott: This is the BiggerPockets podcast Show 260.
“There’s always something in a negotiation for everybody that’s more important than actually making a deal. For somewhere between one to two-thirds of the people we run across, they just want to know that they were heard”.
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Scott: What’s going on everybody? This is Scott Trench, your host of the BiggerPockets podcast, here with my co-host, Mr. Brandon Turner. How’s it going, Brandon?
Brandon: Man, things are so good right now. It’s the new year. It just turned the new year and we’re recording this ahead of time so it isn’t really, but you know—we’re going to pretend it is the new year. How are you doing?
Scott: I’m doing great. Is that a new painting I see behind you? Is that Chewbacca with a surfboard?
Brandon: It is not new but it is Chewbacca and a surfboard. I just rearranged my office so now I’ve got a cool little background. I’ve got a plant because you have to have a plant in the office. Where’s your plant?
Scott: Uh, there’s probably one somewhere here.
Brandon: Exactly. You’re lame. You don’t have one. You’ve got a blue wall behind you. Just kidding.
Scott: Oh wait, here it is. Here’s my plant.
Brandon: Okay, let’s see it. All right, where is it? Oh, that’s the most pitiful plant I’ve seen in my entire life. That’s really bad. Come on, Scott. Come on, you’re letting me down. You’re letting everyone down.
Scott: I’m sorry. I can just picture you on a surfboard hitting a wave and going brrrr.
Brandon: That’s exactly how I do it. That’s exactly it. All right, so that was a weird beginning of a podcast but we’re going to go with it. Today’s show is one that I’ve been excited about for a while now. In fact, Josh actually read this guy’s book before I did and he’s like, Brandon, you need to read this book and then I think that you read the book and you were like, Brandon—
Scott: It did the same thing for me. Awesome, awesome book, by the way.
Brandon: Yeah, fantastic. So we are fortunate today to have Chris Voss, the author of Never Split the Difference, a fantastic book on negotiating from a top FBI hostage negotiator. So that’s going—anyway, the show is fantastic. We just got done recording it. It is unbelievably good.
Scott: Take out your notebooks for this one because this guy does three things really, really well. One, he explains the philosophy behind what he does so clearly. Two, he has incredibly stories from the real world. Real hostage negotiation situations. Real business settings where he’s applied these philosophies and then three, he’s got very practical tips you can apply immediately in practicing kind of the approach that he advocates. Just awesome, awesome stuff.
Brandon: Even if you’re like me, like I don’t like to negotiate. I’ve said that a million times. I’m not good at it. He makes me a believer, that like I can do this! Like these simple techniques like mirroring which we’ll talk a lot about on the show but listen for that, it’s so funny.
Brandon: Thank you. All right, so with that, let’s get to today’s Quick Tip!
Scott: All right, so today’s Quick Tip is practice mirroring in three conversations today. And mirroring is the idea of repeating the last two or three words that someone says in an effort to get them to continue talking or to get them excited about it. And you’ll see some magical results from this, especially if you listen through and apply with it consistent with the philosophy that is discussed in the podcast.
Brandon: In the podcast?
Scott: Yes, Brandon, in the podcast. That’s an example of mirroring.
Brandon: All right, so we do that a lot on today’s show. Also, make sure you guys listen at the end. We changed around the Fire Round today. Normally, the Fire Round comes from the forums. Today, we actually decided to have some fun with, I mean it’s not often you get to negotiate with the top FBI negotiator, so we actually do a mock, what do you call it, negotiation—
Scott: Negotiation of a rental property.
Scott: And Brandon and Chris go at it.
Brandon: Yeah, he’s going to buy my property. I don’t know, man. I don’t know. It was entertaining and super, super helpful for me.
All right, with that, guys, let’s get to today’s show. No more waiting. This is Chris Voss. You guys are going to love him. Again, he’s one of the top negotiators in the world. Super, super smart guy on top of his game, so you guys are going to love this. Let’s bring him in.
All right, Chris, welcome to the BiggerPockets podcast, super, super excited to have you here.
Chris: Thanks, guys. An absolute pleasure. I’m happy to be here.
Brandon: Sweet. So yeah, both Scott and I love this book, Never Split the Difference and we’re going to talk about that today. But primarily, negotiation is such an important part of the real estate world—in any world or any business we’re in, but especially like, I feel like I’m dealing on a day-to-day basis working in real estate and if there’s like one thing I could get better at in life, it would be negotiation. I think it would make more of a difference than almost anything. So this is a totally selfish show today. I’m just going to learn from you.
Chris: All right, and I’ll tell you what. If I may, with a little bit of effort, it’s not that hard to get better at negotiation. If I may, with the way we put it forward. So cool. It’s not rocket science.
Brandon: Good. That’s the thing, right? I’ve always looked at it and I’ve said, I’m bad at negotiation, period. Therefore I’m not going to try to get any better. Why work on my weaknesses? But actually, your book, I think the first chapter, it kind of called me out on that. It was like, you need to get better—
Chris: In a good way.
Brandon: In a good way, yeah. You know, I just felt a little motivated to get better at it. Like, this morning, I sent an e-mail to somebody and I was using the—does that sound fair? You know, they’re using fair, and we’ll talk about that, I’m sure. I’ve already found myself.
Scott: One of the things you kind of pick up after reading the book is all of life is really involved in these negotiation principles. I haven’t done a real estate deal since reading the book yet but I will absolutely use some of the principles that you talk about, Chris. But I’ve been able to use some of the things that you’ve talked about in your book in my day-to-day life and my work here at BiggerPockets just from the things I picked up there. It’s really good for a lot of different areas of business and life.
Chris: And the other thing we like to say is, if you want big stakes results, you need to practice in low stakes negotiation. So you should be doing it in an everyday interaction so when you get into the middle of that big deal, you’ve got a high stakes results from a low stakes practice.
Brandon: Yeah, that’s a really good point.
Scott: So can you tell us a little about your background? Did you do anything interesting for a living prior to writing the book?
Chris: Yeah, I was a janitor. I used to mop. Yeah, I was an FBI hostage negotiator. I was the FBI’s lead international kidnapping negotiator. I couldn’t think of a better way to get frequent flyer miles without paying for them.
Brandon: Wow, that’s legit.
Chris: Yeah, I had a 24 year career with the FBI. I had a great career with the FBI. It was a lot of fun. Worked with some phenomenal people, we did some crazy things.
Brandon: So tell me, what does that mean to be a lead hostage negotiator? When I think of the movies, of what that was like, is that what it’s like? Are you out there on the phone with some bad guy in the bank? Is that how it is?
Chris: Ultimately, to get to that position, and at any given time, there’s only one of us in the entire FBI, you know. I’m running the program. But it was pretty cool. I had to be prepared to go anywhere in the world within four hours of hearing about it. Now, a point of fact, what that really meant was any American got kidnapped anywhere in the world, I’d probably hear about it fairly quickly and I needed to start mobilizing response to it.
Whether or not I would actually go depended upon how I expected a timeframe of how long I thought it was going to go down. In the ages of cell phones, which was when I first took over that role, you can make a call anywhere in the world. Like, start working a kidnapping in the Philippines and as soon as I knew about it, I could work from Washington, D.C. and frequently did. So we’d mobilize response immediately and try to get an American who was drinking at the wrong bar at the wrong time out of trouble.
Scott: Can you tell us a little bit about how you got into that position in the first place? Just a little bit of background about what peaked your interest in this line of work and how you were able to get a position with the FBI in a negotiation.
Chris: Originally, I was a cop and then I found out about federal law enforcement and talked to guys who travelled all over the world. First, it was the Secret Service guy I met, and I grew up in Iowa. I’m a small town boy from Iowa and the idea of travelling all over the world, I was like, ooh. That sounds interesting. I could try that.
And I was originally a SWAT guy. I was on a SWAT team in FBI Pittsburgh and actually as a result of a recurring knee injury—I tore my knee up in college in martial arts and they had to put it back together a couple of times and realized that there was only so many more times that that could be done so I decided I wanted to stay in crisis response and I wanted to become a hostage negotiator.
This is an additional duty. It doesn’t start out as a full-time job. A full-time FBI investigator working terrorism in New York City at the time, joint terrorist taskforce, worked terrorist cases. I mean, a lot of crazy stuff. If it’s crazy, it probably happens in New York or L.A. So I was in New York. But I was on a hostage—I made the hostage negotiation team in New York as an additional duty and I ended up being in charge of the team in New York because by sheer initiative in being in the right place at the right time, negotiated a bank robbery.
Now, bank robberies with hostages, Eddie Murphy, Bruce Willis, Samuel Jackson talking somebody out of a building or a bank happens in the movies all the time. In real life, an actual negotiation at a bank happens in the entire country about once every 20 years. So I was lucky enough to stumble into one of those in New York City which gave me an additional unique set of experiences with my terrorism experience. Then I get promoted to the full-time position of hostage negotiator, small core group of guys working out of headquarters and one of those duties is to run all the international kidnapping response. Because of my terrorism experience and I like to travel, give me those frequent flyer miles.
Brandon: Can you tell us about the bank robbery thing? I think that’s fascinating. I think you tell the story in the book, but let me just say this real quick before we get any further. When I read the book, what blew my mind was like the stories you told in there. I’m assuming a lot of people are going to read it but like it kept me enthralled because of your stories. Can you tell that story a little bit? I mean, quickly, I guess, of like what that bank robbery, that first one, was like.
Chris: And before I do that, let me do a little commercial for my co-writer Tull Rahz. Because the book is—because of Tull, the book is incredibly readable. And the reason I ended up with Tull was Tull is also a writer, co-author of another one of the best books ever written, Never Eat Alone. And it’s the ultimate book on networking. And I had read that book and I really enjoyed reading the book.
And finally, I go like, I’ve got to get this guy. I’ve got to get this guy. We made the deal and he structured the book. It’s not like reading an encyclopedia. I’m really happy to hear you say you enjoyed reading it because that was why I brought Tull on board. If you’re looking for a business greeting card and Tull wrote it, read it. He is the best business book writer on the planet. And that’s why we partnered up on the book. I think it’s a very readable book.
Scott: And it’s also a readable book because of the great stories that are in the book. You’ve got some really cool things that you’ve done that are described really eloquently, yes.
Chris: All right, so the bank robbery in Brooklyn. He was one of the guys that are really into letting me know that negotiations, negotiations, negotiations. This guy used several tactics that great CEOs used. One of the things that he did, like if you’re in a business negotiation and the guy or gal on the other side of the table, they act like they’re powerless. They’re like, I don’t know. I’ve got a committee I’ve got to respond to. You know, and these other people, these other guys—I don’t know what the other people in my company are going to do. That’s the guy, the person who explicitly avoids singular pronouns. You can’t get an I, me, my out of that person’s mouth no matter what. You’re talking to the guy.
This guy in the bank robbery was the ring leader and organized everything, was pulling the strings behind the scenes. We had him on the phone and he kept saying like, these other guys. They’re crazy. Like, I’m scared of them. I don’t know what they’re going to do. And initially, we thought, why are we talking to this guy? He’s got no influence with his coworkers, if you will. And he was—when we got everybody out, he was the guy. And I’ve seen that in business deal after business deal. It doesn’t matter what it is. You’ve got somebody at the table who is disguising—who seems powerless and they’re almost embarrassingly admitting it—that’s the guy.
And the reason why, they don’t want to be cornered. They know they have the influence. They know they’re at the table. They don’t want you to corner them into a decision if they’re the main decision-maker and that was one of those things that let me know that negotiations were negotiations, whether they were the bank robber or a prison riot or at the Monday morning staff meeting.
Brandon: I’ve noticed I’ve done that in my own real estate stuff. Like, I tend to blame, oh I’ve got to talk to my wife. She really is the one that makes the decision or I’ve got to talk to my partners. There’s always another party that I always refer to. It’s for that reason because I almost don’t want them to know that I’m the guy. Like I want to have that whatever. So when I read that, I thought that was interesting insight because it totally is totally true. I was the guy but I don’t want to be the guy.
Chris: Yeah, it’s actually a very smart move because you’re also buying yourself time. You need a little cushion to think every now and then. You realize in the moment, you may not have had all the right information or maybe you’re just having a bad day and you’ve got to double check your decisions. So it’s a smart move.
Brandon: Well, thank you. Good.
Scott: Can you tell us a little bit about how you wrapped up that situation with the bank hostage?
Chris: Well, in the midst of talking to the guy who couldn’t have been more guarded, couldn’t have been more smooth, couldn’t have been more calculated—I mirrored him a couple of times and a mirror is just repeating the last few words of what someone has just said.
Brandon: The last few words that somebody said?
Chris: Nice job. Very good. See, I bite on that even when people do that to me.
Brandon: When they do it to you?
Chris: When they do it, each and every time. Now, you keep that up, we’re going to be on the phone for like four hours.
Brandon: Okay, I won’t. Anyways.
Chris: The critical part of that is, what you need is, what we refer to as vomiting of information. You need the other side to talk before they’ve thought about it a couple of times and a mirror has a tendency to really get people to bring information out. What he did was in his response he told us about his getaway car driver that we didn’t even know was there. I mean, he literally said to me, “My guy cut and run when he saw the police”. At the time, I was like, what is he talking about?
Well, by the end of the day, we had found the getaway driver and we had him in handcuffs and he ended up—we had no evidence of him at all other than the spontaneous admissions of our manipulative guy in the midst of the bank robbery. What good does that do to you? In a given negotiation, you’ve got to talk to somebody where they’ve got their guard down a little bit so you can get those spontaneous information and they give you information because they feel like they’re in control. A lot of that has to do with your tone of voice, your late night FM DJ voice, which kept his guard from going up. And we got spontaneous admissions out of him.
Then, I ended up confronting him later on because he wouldn’t tell us his name. Everybody understands the importance of a first name in a communication. When the other side’s not giving you their first name, they’re trying to block you from establishing a rapport with them. There’s a rule in business. You’re not going to make a deal that sticks outside a rapport. It’s just not going to happen. So the other guy’s blocking rapport but I’m using my voice to keep his guard down.
Finally, he can’t take it anymore. After the confrontation, he just hands the phone off to somebody else. Now, the other guy on the phone, he didn’t plan for this to go this way. The second guy that gets on the phone, he is literally in crisis. He’s trapped in a bank. He thought they were going to burglarize the bank. He thought they were just going to break into the cash machine, take the money. The next thing he knows, people are waving guns around, the seventh largest standing army in the world has surrounded him and they got .50 calibers pointed at his head. And this is not what he had in mind when he got up in the morning.
Now, I’m working my late night FM DJ voice on this guy again and in 90 seconds, he tells me, “I trust you”. And 90 minutes later, when I suggest we meet each other out front, he comes out of the bank. And then he comes out and he says, look, young man, this is what’s going on. This is what’s happening with the guy inside.
And now, at this point in time, we know that as long as we relax, if we relax into this, the speed of the negotiation will pick up dramatically, which is a very counterintuitive thing we like to call it “the delay to save time”. You want to go fast so you relax into it and take your time. And we had the guy out just a couple of hours later.
Brandon: That’s awesome.
Scott: And what I love about this is, and let me know if I misstate anything here because I read the book once and I’m still kind of absorbing a lot of the information. But it seems like a huge fundamental part of this was willingly listening and maybe empathizing with the folks on the other end of the line, mirroring them using the tactic of mirroring to get them, you just said it as vomiting information. And you’re just patiently collecting as much information and building as much rapport as you can throughout the course of this in order to bring about the best solution for you and for the rest of the people involved.
Chris: Yeah, and every negotiation, there’s information you’re only going to get at the table. Like, you might know all the variables but you don’t know how the other side weighs variables and they’ve got stuff that’s eating at them that they’re hiding. You can only get that at the table. So, if you relax into it and listen, which actually is an advanced skill. A lot of people don’t realize. They think listening, because I can hear, I can listen. I’ve got my ears on all day so I must be good at it.
Listening is actually an advanced skill and you know, what I laugh about all the time, I ask people, what’s the difference between a typical business negotiation and a hostage negotiation? And they say, I don’t know, the people you’re dealing with are crazy. And I say, interesting, we get yelled at a lot less than you do. Our negotiations are calmer. We don’t have people slamming their hands down on the table or storming out, refusing to come to the table at all. Because it’s amazing when you dial into somebody, how this advanced skill of tactical empathy, how quickly you progress and how calm things get.
Terrorists don’t yell at us the way you guys get yelled at in business negotiations. That’s just a crazy idea. Every person I’ve ever spoken to in business has five stories of the person on the other side of the table screaming at them. Hostage negotiators maybe have one.
Brandon: That’s fascinating.
Scott: So this isn’t just a theory that you’re espousing here. You actually took your experience with hostage negotiation into the business world, if I recall, in a classroom environment with other top young professionals that are getting their MBAs. Can you maybe tell that story of how that went when you started translating these into business settings?
Chris: Yeah, the first time I really got a chance to test it out in the private sector, if you will, was I negotiated my way into Harvard Law School’s negotiation course. I’m the only on-duty FBI agent to come and do that ever. I acted as a student but I was a student and they don’t let people go to their class that aren’t a student in one of the universities up there. And I just used my hostage stuff and I was killing them. I mean, I was killing them.
And so I thought, wow, this is pretty interesting. Somehow I thought there were rules to business negotiations that I just didn’t understand so I brought my stuff. And so then when I got out, ultimately, I got a chance to teach in the MBA program at Georgetown University in a part-time program. The important thing about it being a part-time program meant that everybody in a class, they’re going to get their MBA at night—they’ve got day jobs. And they need help in their deals in their day jobs right now.
And my teaching style was like, okay, good because you have to take these skills that I teach you, put it into your day job and make it work. And they started doing phenomenal things. I mean, one of the students at Georgetown was in the middle of a billion dollar Wall Street transaction where he had his notebook next to him and he’s leafing through the pages while he’s doing the deal on the phone.
And I mean, the entire range of negotiations. We’ve proved it over and over again and the book is full of stories from people putting the skills into real life deals. They were either MBA students at Georgetown or MBA students at USC here in Los Angeles. And so, the idea was not like, try this and see what happens, which is what some books are. It was like, no, people tried this and made it work and here’s how they made it work.
Brandon: Yeah, I love that. So let’s shift a little bit and go into the real estate stuff. Obviously, a lot of people here are trying to get into real estate. There’s a lot of negotiation in it in a couple of aspects. One, if I’m going to talk to let’s say a private seller—I want to buy their house. I’m typically going to go and negotiate with them on a price or I’m going to sell a property I’m going to negotiate with them. Or if I’m going to work with a partner, how am I going to negotiate the split with the partner? There’s a negotiation in every aspect of real estate.
But let’s start at a very basic thing. It’s something I deal with and your book kind of called me out on it in a nice way. But like, I don’t like negotiating. It makes me scared, nervous. I don’t like doing it so I just don’t. I typically just look for ways to not negotiate and I say, oh, I’m a bad negotiator. But there’s this line in the book, I think it was the first chapter, that said, “The first step to achieving a master of dealing in negotiations is to get over your aversion to negotiating”. So can you talk on that to people like me who just hate negotiating and just don’t want to do it?
Chris: Yeah, well sure. Let’s rethink it to start with. In my company, we’re really on a mission to rethink negotiation around the world. And I’m not joking around about that because the book is in 20 countries in 16 languages. And because negotiation is a universal, human nature problem. Everybody, whether you’re Asian, whether you’re Latino, whether you’re African, has those exact same set of fears.
So what am I saying when I want to rethink it? I don’t want it to be, let’s take it out of the win-lose. You’re afraid of negotiation because you don’t want conflict. You don’t want to beat the other side or you’re worried about what you’re going to lose. A good hostage negotiation approach is an emotional intelligence approach to really transform it into much more of a collaborative thing. Well, together, we’re going to find out what’s on the table and maybe come up—there’s going to be some cool stuff that’s going to surprise us. We’re going to have some cool ideas about this. And then when we’re done, we’re going to have enjoyed the experience so we’d actually want to do it again.
I did a talk with CNBC and Ink Magazine did this series of talks called The Iconic Tour. Kevin O’Leary was at the last one and Kevin spoke shortly after I did. And my take on negotiations is not his because he said, and I wish I had known he was going to say this—“Most negotiations, I’m happy with it when all sides are done are unhappy. That’s a good negotiation”. And I’m thinking like, no wonder you’re trying to get everybody to call you Mr. Wonderful. Nobody likes you. But that’s actually bad for business long-term because a lasting impression is a lasting impression. So if the last impression you leave in a negotiation is you left people unhappy, who wants to deal with you again? That’s how you get into this vicious circle of I don’t like negotiating because I always felt like I got beat, I got hurt.
Why say something—we don’t like hurting ourselves. A lot of us don’t like hurting other people. I mean, I had to hurt him to get what I wanted. So this is a rethink approach where like, you know, we’re faced with a mutual problem otherwise we wouldn’t be talking. There’s an external problem. The adversary’s a situation. Where the accomplishment, the potential accomplishment is a situation. We’ve got to collaborate on this.
This approach is to build rapports simultaneously while negotiating instead of let me build rapport because when we negotiate, I’m going to kick your butt and you’re not going to like it. So I’m going to build enough rapport so you’ll tolerate it. And then when you almost start to get mad and I can tell you’re mad and angry with me, I’ve got to go back to rapport building because it made you mad. I mean, that’s unpleasant.
That would be like saying, in my marriage, yeah we’ve got to make each other unhappy. Or in my business partnerships, in order to make it work, we’ve got to make each other unhappy. That’s crazy. Let’s not do it like that.
Scott: What’s the alternative? How does one go into a negotiation and create a situation where everyone wins, where you get what you want and the other side gets what they want and everyone walks away from the table happy? What are some of the tactics that we can use going into that negotiation to make that outcome more likely for us?
Chris: Well, to start with, let’s get back to this listening idea. There’s always something in the negotiations for everybody that’s more important than actually making a deal. For somewhere between one to two-thirds of the people we run across, they just want to know that they were heard. Like, imagine a boss that you had that always heard you out. He or she might not have did what you wanted him to do but they heard you out. There’s something ridiculously satisfying about feeling like you were heard.
So let me eliminate all my compromises by just hearing you out. Because more than likely if I hear you out, you’re going to happily give me some stuff. You just don’t want to begrudgingly give it to me. You’re going to want to feel like you respect it and appreciate it. It’s the Stephen Covey advice and we all look at Stephen Covey, The Seven Habits of Highly Successful People and a lot of people say, well, all right, Covey, he’s a soft-hearted guy. He just wants to give people hugs. Let’s think of Covey as a mercenary. Seek first to understand then be understood. Hear the other side out. Let’s say Covey was a mercenary. Let’s say Stephen Covey, which is not true, but let’s say he was a sociopath that only wanted to get what he wanted. You get what you want by hearing the other side out. It’s stupidly insane.
That’s why I was talking about it before, how it accelerates a negotiation. You’ll stop pushing back on me on a lot of issues that you would have given in on as soon as you felt respected, heard, and appreciated. Then, you’re going to give in. I’m like, all I’ve got to get you to do is feel good about this and then you’ll give in? Okay! Let me hack this. Let me hack a third of the negotiation just by hearing you out and that’s the first thing.
The second thing is you’re going to speculate on what your must-haves and your giveaways are and you’re going to be wrong on a lot of them, which means my counterpart is going to speculate on his must-haves and his giveaways and he’s going to accidentally give me some stuff that he thinks is not valuable to me but actually is enormously valuable. If I give him the chance. In negotiations, the art of letting the other side have your way. Well, I start mirroring and I start listening, you know, maybe I’ll give you this. And I’ll throw it out on the table and it will be enormously valuable to me. And I’ll have to go like, okay.
But I gotta again, use this tactical listeners’ judo approach to get you to do that in the deal. And then, the best thing that I can possibly say to make a deal, which you’re going to implement is, I want to say, okay, we’ll do it your way. Because we’re going to implement if it’s your way.
Brandon: Yep, I like that.
Scott: One of the things I loved in your book that you kind of talk about along the lines of the subject is getting the other party, going along with okay, we’ll do it your way. How are we going to do that, right? That gets along a certain line of executing that problem. Can you talk about why you suggest asking the question, “How are we supposed to do that?” and what that kind of provides to the negotiation table or how that gives you an advantage?
Chris: Yeah, the secret to gaining the upper hand in the negotiations is giving the other side the illusion of control. Now, people love to tell you how to do things. They love it. And then also, if it comes out of their mouth, it’s gotta be a good idea. So how are we going to do that? You can phrase it, “How am I supposed to do that?” is the magical phrase for either saying no, or building implementation or building great deals or forcing group context. It’s actually our go-to way to say no. And people, when they’re told to say that, well what if the other side says “Because you have to”. And I’ll say, perfect. That’s exactly what you want.
There’s a real estate deal here in Los Angeles. Somebody’s negotiating on behalf of a high network client and they want to rent a house on the Hollywood Hills and the rent is $25,000 a month. And so they’re going back and forth on the price and the agent says to the person on the other side, he says, “How’s my client supposed to pay that?” And the person on the other side says, “Well, you know, yeah. You’re right, it is a lot”.
Now understand, that’s not what they did. They responded as if they said to them, “That’s too much!” But it also triggers a response from the other side that says, “Yeah, you’re right. It is a lot”. And then they talk about some other terms and they drop the lease price, the monthly rate. So they talk a little bit more and it triggers a lot of other conversation and then they circle back around to “How’s my client supposed to do that?”
And the second time, the person on the other side of the table says, “If your client wants the house, they’ll do it”. Perfect. They just pushed them as far as they could have. They didn’t break rapport. The person didn’t yell at them, slam their hands down on the table, hang up the phone, walk away. Your job as a negotiator is to find out how much is on the table without making the other side so mad that they walk away. Because when the other side looks at you and says, if you want the deal, you’ll do it. You now know that they want to make the deal. It’s actually a very counterintuitive way to get everything on the table.
Brandon: You know, what I like about that, I’m trying to translate it into like what I’m dealing with on a day-to-day basis with real estate. Let’s say I’m sitting across the table from a seller, somebody who called me up and they want to sell their house. Maybe they found my website or whatever and they want to sell their house to me or at least they want to sell their house, period. That’s the problem. And they tell me, I want $200,000 for my house. That’s what I want for it. But I know there’s no way I can pay them close to that.
Let’s say I’m going to go flip it, right? I’m going to go fix it up and make it look beautiful and sell it. But I know that the most I can even sell it if it was all fixed up is like $200,000. So the way I’m kind of translating that is instead of saying no, that won’t work, or there’s no good deals and walking out and storming out, I can just ask, “Well, how am I supposed to pay $200K when this is my business model, I’m a house flipper, I have to make a profit and I’ve got to do all these repairs. So tell me how am I supposed to do that?” Is that what you’re saying? Like I can ask that question.
Chris: Yeah, yeah. And I’ve used a tone of voice. I love deference. There’s great power in deference. The late night FM DJ voice with some deference thrown in because it works on everybody.
Brandon: What do you mean by deference?
Chris: “How am I supposed to do that?” is a very deferential thing to say. Again, to make the other side feel powerful and in control. If they feel powerful and in control—you’re a home seller. He doesn’t really know what the price is. He’s feeling you out. It’s the exact same thing with kidnapper or translation, we used to say to kidnappers, when are they going to release the hostage? When they feel they’ve gotten everything they can. Not when they did get everything they could, when they feel they’ve gotten everything they can.
Your home seller is going to sell you that home when he feels like he got everything he can. So he’s going to want to feel like he made you work. He’s got an amount of time his head is going to take and let’s say you could pay the $200K and that was like a ridiculously low price. If you look at that seller and go “Deal!” on the spot, he’s going to feel like he could have gotten more. So he’s going to find a way to back out of that. So, even when you’ve got your price, the worst thing you can do is agree because it ignores human nature or your peril. He’s going to go sideways on you. And then once you understand it’s a process, when they feel like they’ve got the best deal, now what can I do to speed that feeling up to actually shorten the process?
And that’s when you kind of go—I had a colleague, one of the best negotiators I’ve ever worked with in the FBI. You could ask him for anything. You could ask him for something he was getting ready to give you and he’d go like, “Oh, my God. Oh, that’s impossible. How am I going to do that?” Because he understood that this feel like I got the best deal possible is extremely important for implementation to keep you from backing out of deals or killing the deal over an inspection cost.
You know, I’ve heard of real estate transactions where the clause was “approval of inspections” and had a passing inspection and had the other side say, well the clause doesn’t say that it passed. The clause says I approve. And I disapprove. Well, they’re going to do that for emotional reasons because they feel like they could have gotten a better deal and they’re mad about it.
Brandon: Yeah, I specifically for that reason, I negotiate. I mean I’m not a great negotiator but I will—the other day, I got an offer. It was a full price, it was over asking price on an offer on a property I was selling and I specifically didn’t respond until the next day because I wanted to make it feel like, if I would have jumped at it that day—yeah, I’m risking that I could lose that and that could go run to somebody else. It didn’t happen. I feel like, it made them feel like, “Oh good, we got it”. They weren’t sure for a day. Maybe there was another full price offer. So by just waiting that day and saying, okay.
Or I’ll say, okay but can we move—I think that was exactly what I did. I said okay, but can we shorten the ten-day inspection to seven days. So an arbitrary thing, they’re going to get the inspection done in seven days and it didn’t really matter to them so now it felt like we were negotiating. Do you agree? Did I do a good job there? I need approval from you.
Chris: Yeah, there are two things that were going on. First of all, you were rethinking it, too. You were like, oh my God, I could have gotten more for this because this offer came in this quick. An advisor on the outside would have said, think of the time value of money. Make this feel quicker. The money came to you fast so you shouldn’t think that way. But it doesn’t matter because you did think that way.
So it was a combination of two things and to me, it sounded like you were self-aware enough to know if I had second thoughts if we come to an agreement too quickly, the other side’s going to have second thoughts, too. So again, we’ve got to get back to this whole feel thing to make sure it happens.
Because you know, in real estate, you guys know. Signing an agreement is only the beginning of the journey. Opening an escrow is only the beginning of the journey. The number of deals that goes sideways for emotional reasons after escrow has been opened is insane. Anybody that’s experienced in real estate knows do not count this deal being over until all the papers have been signed and I physically have taken possession. And it all goes sideways for emotional reasons. And emotional issues that are in your seller or buyer’s life that have nothing to do with the transaction will manifest themselves in a transaction.
Brandon: That’s very true. Yeah, I can think of multiple deals that I’ve done where—I would probably guess that a third of my deals that I put under contract, whether I’m selling or buying, fall through. At least a third. I would even say half the deals that I sell end up falling through for some reason. So, yeah. It definitely is not over until I have either the check in my hand or the key in my hand. Then, it’s over.
Chris: Yeah, this is you know, if you don’t read my book, every person in real estate should either read my book or volunteer on a suicide hotline, whichever you have more time for.
Brandon: But you did that, right? I mean, I read that in the book that you actually volunteered and that’s kind of how you got into the FBI, right?
Chris: Yeah, that was the difference maker. That was the game-changer that took me from being a completely unqualified candidate for hostage negotiations to be the most qualified.
Scott: That’s awesome. So going back to the fundamental thing here, is obviously empathizing, understanding, getting to understand what these external factors are in a business or real estate negotiation. But then I think you also have some tactics that you can throw in there as far as, hey, I’m going to offer a specific amount of money. I’m going to offer a percentage of what I’m going to buy it, what I’m willing to pay at first and work up to my number. Could you talk about that strategy a little bit?
Chris: We’ve got this system that we refer to as the Ackerman system and it was named because as much research as I can do, there’s a systematic approach to bargaining that was invented by this guy named Mike Ackerman who actually ran a kidnappers response company. I started using it in business negotiation and then I finally met Mike and I said, number one, did you invent this? And he was like, yeah, as far as I know, I did. And I said, number two, did you ever use it in business?
And he said, that’s interesting, you know I had some friends at Harvard Business School, Howard Raiffa who is like a negotiation god. If there was a Rushmore face for negotiation, Howard would be on it. And he said yeah, I happen to know Howard Raiffa and I ran it by him and he’s a psychologist and business and numbers and he said he worked his analysis on it and he says, this would work perfectly under any circumstances. So it counteracts high anchoring and it resets the game. Typically, we’ll come in at—
Scott: Can you talk about anchoring real quick just for people who may not know what that term is?
Chris: Anchoring is an extreme, outside of the expected range. Whether you’re buying or selling, your offer price or your ask for price, it’s outside the expected range. It’s a real common practice because then a shark will offer outside the expected range and then say, you know what? Let’s compromise. Let’s meet in the middle and you end up on the number the shark wanted all along. It’s the old phrase, beware the guy who offers to meet you in the middle because he’s offering a poor judge of distance.
It’s an extremely common practice because it works. It’s also a test. I’ll high anchor on you because I want to punch you in the nose and I want to see what you’re going to do. All the sharks do it in Shark Tank. Mark Cuban does it, not because he’s trying to whoop your butt, he’s actually testing you. Mark Cuban will come at you with a really tough offer and his high anchor will also be a term in that he’ll say, take it or leave it. Yes or no right now. You can’t talk to anybody else. You’ve got to talk to me. He’s testing you. He doesn’t want to bully you, he wants to see if you can be bullied. Because if you can’t be bullied, then you’re a great business partner.
So a high anchor is often a test. Mike Tyson said, “Everybody has a plan until you get hit”. Until you get the punch. And respond with the Ackerman system. Respond with a little bit of emotional intelligence. “How am I supposed to do that?” Or you can say, “Come on. That’s ridiculous. Stop joking around. That’s just crazy”. But the last thing you want to do is get mad. So now you’ve got to come in with your number. Typically, you want to come in at 65% of where you want to end up.
Most negotiations go through three rounds of bargaining. We’ve seen it shake out time after time after time. Three solid rounds. The other side has to feel like that they’ve made progress. Now, you’ve calculated in advance how you’re going to go from 65 to 100% of what you want to offer. The real key is, each one of your increases has to be decreasing increments so the next raise, if you make it, you’ve got to come up 20%. The next raise you’ve got to come up 10% and the last phase, you’ve got to come up 5%. The other side feels a slowdown.
You’re going to throw in another psychological technique. You’re going to use odd-numbered pricing. I used odd-number pricing with kidnappers. The target gives you odd-numbered pricing. Why does it work? Because you’re buying a target? No. It works because you’re dealing with human beings. It worked with kidnappers. I’d come up with an odd-numbered ransom and then we’d offer some ridiculous throwaway that they didn’t want.
In real estate, come up with an odd-numbered offer and throw in something you know that they don’t want that’s a non-priced term. In between each one of these rounds, there’s another two critical issues. It’s gotta be sequential. You can’t bid against yourself. And then you’ve got to put in a massive amount of tactical empathy between each offer because you’ve got to get back to the other side has to feel like that they’re working. They have to feel like they’ve got the best deal that they could have possibly gotten. They have to feel like they’re in control. All of this is very specific application of hostage negotiation techniques because then when you get to a price, then that price sticks and it doesn’t change.
Brandon: That’s cool.
Scott: I think that’s just so fascinating and so smart a way to go about this because when you price an anchor like that, I think you mentioned this in the book but maybe you go through this whole process of getting this negotiation, you put in that effort and you make these incremental strides and you arrive at the deal that you’re both satisfied. Or maybe you are above what the other side wants you to be and you’re going to make a deal right there on your first offer. So if you just offered your full amount the first time, you could be losing big time.
Chris: Yeah, you lose in a lot of ways which is another thing that’s very different about our approach is, contrary to almost every academic out there, they will tell you to name price first because it sets the range. That’s true if you’re a B Player, if you’re an average negotiator. Then that’s good advice. If you’re not interested in being a true A Player. The top negotiators on the planet, they do not go first.
Carl Icahn, none of these people—Warren Buffett. He wants to hear your assessment because he wants that information. They know that they’ve got a pretty good idea of the expected range and they know they’re not infallible and they know that you might come up with something that’s phenomenally ridiculous and they’re going to blow it if they don’t let you go first.
So again, understand, if you can take that punch in the nose and if you want to be an A Player, take that punch in the nose. Be willing—practice how you’re going to laugh off a high anchor. Practice how you’re going to come back and say, “How am I supposed to do that?” But the great deal where the other side spontaneously throws something on the table beyond what you expected, which happens enough that the top players won’t go first. You just have to game that out of your head and you can handle it.
Brandon: So this happens to me a lot where I’m chatting with a motivated seller of some kind and I say, so how much are you looking for? I want to know like where am I going wrong in this? But I say, well how much are you looking to get for your house? And they’ll say, well I don’t really know, that’s why I called you. And I’m like, at that point, I’m already stuck. I don’t know. I mean like, usually what I’ll do is I’ll say a range. I’ll say you know, typical houses are in the ranges of $50,000-$100,000 or whatever and that at least gets the ball moving but I always get stuck there. Any suggestions?
Chris: Yeah, that’s the game of who’s going to name price first?
Brandon: Exactly. Yeah, it happens all the time. What do you want to spend? Well, what do you want to pay? Well what do you want to spend?
Chris: Well, we get out of that—every question you should have are corresponding labels to get to that other person. Like I would say if somebody says well I don’t know, that’s why I’m asking you. I’d probably say to them, seems like you’ve got something in mind. Seems like you’ve put some thought into this. Each one of those actually is what we call a label. It’s specifically designed to bypass a part of the brain. What you may not have noticed, I didn’t use the word “I” when I said either or any of those labels.
Every word that you use has an emotional impact on the brain. If you don’t know the emotional impact of what it has on the brain, what you’re doing is you’re firing a weapon and you don’t know what target you’re hitting. “I” is a self-centering word. “I” jolts the brain in a different way. It takes someone out of contemplation and suddenly it brings their attention to you. Which will stop them from giving you information.
So if I say, it seems like it bypasses a part of the brain that triggers an inquiry. It triggers contemplation. It gets inside someone’s head without it raising a guard. It actually is the most powerful negotiations skill we have in the entire arsenal. We’ve got nine skills. It is one of the FBI Eight Skills.
In the FBI, we called it emotional labelling. Actually, when I came out of hostage negotiations, I didn’t think it was that important. We came to find out that labels are the single most flexible, single most powerful tool and the single most universal appeal. Now, when you’ve got a guy that says, well I don’t know, I heard you’re a professional. I want you to tell me. He or she is in analyst mode. They’re in guarded mode. They’ve already thought this through extensively and they actually are dying to show off how smart they are and they’re thinking they’re smarter than you which is exactly why they said to you, well you’re the expert. That’s why I’m talking to you.
I love it when somebody says to me, well, you’re the expert. Because that’s a flattering statement that’s designed to trigger me giving them information when they actually think they’re smarter than I am. As soon as somebody starts calling me an expert, I know in the back of their mind, this person’s going like, “You’re the stated expert but I can’t wait to show you that I’m smarter than you are”.
So I’m like, all right. Well, you’re going to tell me how smart you are as soon as you feel like that you can be unguarded. So I’m going to take some emotional intelligence approaches which is I’m going to get out of the question, questions raise people’s guards. Even good opening questions.
An analyst is going to want to think through all the possibilities and about a third of the planet are analysts before they answer. We found analysts to be enormously vulnerable to answering labels. There’s something about the label design and the way that it hits the brain that bypasses the guards and the defense is then triggered in regard to the responses.
So when the guy says, well you’re the expert, that’s why I’m talking to you, I immediately know that I need to shift to labels. It might take three to get it out of him but I’m going to get it out of him.
Scott: So can I flip this on you real quick? Let’s say that you labelled me and I’m an analyst. I perceive myself as definitely that analyst type. How can I respond to a label in a way that doesn’t put me at a disadvantage in a negotiation if I’m with someone who has read your book or who is using these tactics?
Chris: At this point in time, the real issue is, do I need to be afraid of the other side? And am I going to take myself hostage? What do I mean by am I going to take myself hostage? If I tell myself that you can’t make me say yes, then I should be able to tell you all of the information I want because you can’t make me say yes. If I have an aspiration price, I should be able to give it to you because I’m smart enough knowing the price is not the only term and also just because I’ve given them prices doesn’t mean I agree to that price.
I want information from you. Are you trying to hurt me or are you trying to help me? My weaknesses can actually be my strengths. I can say, well this is the price that I want but there’s some other things I’ve gotta have in order to make it work. And I may think, look, I’ve got a sales company. I may be under tremendous financial pressure.
I may be—let’s say I needed a quarter of a million dollars for the peace of property but I got—I’m in foreclosure of something else. I’m scared to tell you that I’m in foreclosure because you think you can cut my throat and offer me $150,000. Instead, I’ll say, look if I don’t get $250,000 for this, I can’t sell it because I’m in foreclosure. I need every last dime to make these other deals and if you can’t do the deal for me, I’ve got to move on from you right now.
So it’s all a matter of your interpretation of what your strengths and weaknesses are and are you going to take yourself hostage by saying, if I give this to you, you can make me make the deal. Like no, it’s a free country. I can move on.
Brandon: Before we move on, we’ve covered I feel like 2% of what I wanted to cover today. That’s all right. I’ve got a couple more things I want to kind of—
Chris: Hey, I’m confusing you guys, too, I’m rambling so much.
Brandon: No, I like it. This is good. It’s fun, too, because I just read the book, right? So now I’m like, I don’t know. I love this. I’m curious about the idea of saying no. I find that it’s probably one of the most fascinating chapter to me in the book, the idea—you know there’s that famous book, Getting to Yes and the idea that we want to get to yes, and even from a sales position, get the other person saying yes. Get them saying yes all the time. It makes people feel good. You kind of like counter-contradict that. Can you talk about that? Like why is no more powerful than yes?
Chris: Okay, so first of all, you get them saying yes, they’ll feel good and you’ll feel good. And in reality, every time somebody says yes, it triggers anxiety. What am I letting myself in for? What am I not seeing? How have I lost control? I mean, the actual saying of the word ‘yes’ creates anxiety on the other side. Take a look at it yourself. If somebody calls you on the phone and says, hey, have you got a few minutes to talk? You don’t go like, yeah. Oh my God, thank God you called. What else you got? I want to hear it.
If somebody calls you on the phone and says have you got a few minutes to talk, you’re like oh my God, what am I letting myself in for? If I say yes, where is this going? How do I stop this? The act of saying yes actually creates tremendous anxiety. So first of all, get out of that. Get out of that. You like to hear yes. That doesn’t mean the other side likes to say it. It’s tremendously satisfying to hear. We love it. We hear angels. We feel angelic choirs sing when we hear the word “yes”. But it’s not that way on the other side. So the crazy thing is, no creates protection. When I say no, I feel protected.
I think a good, solid, strategic no is worth five yeses. And when we intentionally get somebody to say no, they typically say, no, that’s not a problem. As a matter of fact, we can do this, this, and this. Well, that was four follow-on yeses to other things that you are going to want to negotiate. We’ve seen it happen time and time again. I’ll say, look, are you against this? Is this a bad idea? Is this ridiculous? Well, no. No. We’ll need to do this. We’ll need to bring these people in and we’ll need to accomplish this goal and then we’ll finally have to do this. I’m like, dang. That just unraveled my next five, what would have otherwise been five yes questions and five opening questions because once they’ve said yes, then you have to say, how are we going to do it?
So it’s probably the single greatest hack in the world in general terms. It triggers a decision and it creates protection in the other side. They feel safe and secure and protected and so when they say no, they can give you the following information that you would otherwise have to ask for. It’s insane.
Scott: I feel like this concept is related to another concept that blew my mind just as much as this yes or no thing which is the difference between “you’re right” and “that’s right”. Can you talk about that for a minute?
Chris: “You’re right” is the greatest killer of relationships, deals, progress, collaboration. It is again, we love to hear it. It is the worst thing to possibly hear. When someone that you’re working with is nagging you, gnawing you, won’t let up on you, what do you get them to do to happily shut up and go away? You look at them and you say, “You’re right”. They have that big smile on their face and they leave you alone. You know who the world’s biggest practitioner is of this tactic are? Husbands.
Brandon: So true.
Chris: And why? Because it’s relationships that they care about and preserve and they don’t want to cooperate. It ain’t husbands that are the only ones that are doing this. It’s our colleagues. It’s people all around us. If anybody who listens to this has done this to three people this week, they got them to shut up and go away without making them mad by looking at them and saying, “You’re right”.
And the two millimeter shift is if you want to hear from somebody else, you want to hear them say, “That’s right”. Like whichever side of the last presidential election you were on, if you watched the debate whether you were Republican or whether you were a Democrat, when your candidate said something that you loved and that you embraced and you were a thousand percent behind, you pointed at the TV and you went, “That’s right”. That’s what people say when they’re a thousand percent behind what’s just been said.
I talked earlier about Stephen Covey, seek first to understand then be understood. What’s our indicator that the other side is now ready to listen? When they look at you and say, that’s right. There’s suddenly an epiphany that takes place. There’s no signs behind it. It’s establishment of immediate rapport. They’re telling you, when someone says that’s right to you, among the great things they’re telling you is they feel empathy from you and they will never be in a more persuadable place than at that moment. And that’s when you make your deals.
Brandon: So I’m talking, let’s say, to a motivated seller. Go back to the guy who wants $200,000 for his house. He says he wants that. By using, what’s the act of listening? I want to hear, I want to use mirroring to really get to the bottom of what he wants. Like, for example, it seems as if you’re just looking to unload this headache and your stupid cousin who’s living in the property, it seems like you just want to get him out. Is that the idea? That’s right.
Chris: You know, there’s probably three or four responses on your part. I mean, my first one would be like, it seems like you put a lot of thought into this. He’s going to give you a lot of information which you’re going to want to mirror as much as you can any way through. You’re going to want to find out what the real issues are. A home represents a variety of things simultaneously. It represents hopes and dreams. It represents cherished memories of the past. It may represent some current disappointments. If he’s got a stupid cousin living in the house not paying rent, tearing it up, there’s some soul-crushing disappointments in there because at one point in time that home represented a vision of the future, hopes and dreams of the future, cherished memories of the past. You want to feel that out and then let the other guy know how much of an appreciation you have for that. Simultaneously, this also begins to lay the groundwork of the deal, the feel aspects of the deal and it draws the person so much closer to you that we’ve seen it on a consistent or regular basis, people sticking to deals for less money because of the empathy bond that they felt with the person that made the deal with them. Not against them, but with them. And in hot real estate markets, you have to have that advantage or they’ll pay to a higher bidder, they’ll back out. Or in a slow real estate market, you have to have that advantage or they’ll just get fed up and back out anyways.
Scott: So if I were summarize this, the goal is you actively listen, you mirror as much as possible, and then once you feel like you have enough information, you attempt to precisely as possible, label exactly the situation as it is in the other party’s mind. And the goal is, you continue to go down that path, rinse and repeat, until you hear, “That’s right” with enthusiasm or you know, in a way that convinces you, yes, I’ve got it. This is how the other side sees things.
Chris: I’m going to make one small tweak in that and this is one of the differences, I think, because we’ve gone from active listening to tactical listening. I mean, we know specifically what you should be listening for. You’re going to be listening for hopes and dreams. You’re going to be listening for disappointments. Let’s call out some categories in advance that you’re looking for, some of which you’re going to amplify, others you’re going to diffuse.
And once you have an understanding, it’s like taking a beam of light and running through a prism. A white light actually has about seven components in it. Let’s lay out what those components are. They are deal-making components and then you’re going to get to a “That’s right” and “That’s right”, it’s more of an epiphany feeling from the other side as opposed to enthusiasm which you’re really going to get. They’re going to feel understood. There are actually going to be chemical changes. There’s an actual bonding feeling that both of you are going to feel.
And once you’re bonded, that’s when people are going to start getting honest about what’s it going to take to make this deal. And why am I going to make it with you, I don’t know but there’s something about the way you deal with me that I appreciate more than anybody else.
Scott: This has been fantastic, mind-blowing in a lot of ways. Do you have any last things to add before we move onto our Fire Round segment of the podcast?
Chris: I probably made this sound more complicated than it is. It’s a learning curve. Let’s talk about the learning curve. If you’re new to this and it seems like a lot to begin with, the learning curve is a bell curve. It’s only steep at the beginning. The bell curve, halfway through, you press a hill and you take off down the other side. With less results, you get greater return. That’s the other side of the bell curve. So if you want to try this and you’re discouraged by it at the beginning because it feels like a lot, actually the good news is, however well you’re doing, your upside is tremendous. You’ve got a tremendous upside. So don’t be discouraged if some of this seems like a lot.
Brandon: Well, on that note, is there something you could share for somebody that’s like, what’s the most tangible they can do it today in their day-to-day interactions? Like what’s one thing that they should just do that would make them feel like they’re a better negotiator?
Chris: So today is a free day. Today is a warm-up day. Today is a test day. Mirror all day. Repeat all day. Mirror all day. You’re getting a great example of mirroring right now. Just repeat the last one to three words of what somebody has said. Now, do it a couple of times. The first time, it’s going to scare you. At the end of the day, people are going to love you. We were at a conference and this guy I ran into, I nicknamed him Johnny Mirrors. He was there with his wife and all he did all day long was mirror people. I mean, I was talking to him for 20 minutes before I realized he was mirroring me.
And he was running around all day with a big smile on his face mirroring everybody and it was driving everybody crazy. Everyone was coming up to his wife going like, your husband is so much fun to talk to—he’s the best guy at this whole conference. People would just glare at him and he’d sit there with this big grin on his face because he was having the best time mirroring people. So give yourself a free day. Today’s a free day. Today’s your cheat day like if you’re on a diet. Today’s your cheat day and just mirror all day long. So many people are going to love talking to you and you’re going to have so much fun.
Brandon: You’re so right about that. I was going to say, too, when I read that I was like, oh I am totally going to do this. So I started doing it on everybody I knew. And nobody notices that I’m doing it. Like I felt like they’re all going to know that I’m doing it because I’m being obnoxious. Nobody noticed it. They just get really involved in what I’m saying. Like what they’re saying.
Chris: Yeah. They’re having the best time and you’re having the best time.
Scott: And a quick clarification to this, I think in the book you mentioned it’s not necessarily the last three words someone says but it’s the critical three words in the last bit of what they said, right?
Chris: Once you get your feel and the last one to three words, it doesn’t take any practice. You don’t got to listen for anything special. So you get your feel for mirroring up and then that frees up your brain so then now you start to look for critical words.
Brandon: Critical words?
Chris: You look for critical words. So you’re right.
Brandon: I’m just going to keep doing this.
Chris: And a friend of mine in Los Angeles, Ned Colletti, he’s a former GM of the Dodgers. Ned’s a superstar. He’s got a great book out now called The Big Chair. You want to know what it’s like to be the GM of the Los Angeles Dodgers? Read Ned’s book. But Ned used to always say in every two hours conversation, there’s 90 seconds of solid gold. That’s what you would mirror. Ned’s got an ear for what’s really important. He’s a classic great practitioner. He didn’t know what he was doing, he just was doing it. So there’s always going to be critical things in a conversation and that’s exactly what you want to mirror when you get good and you get good from practicing on the last one to three words.
Brandon: I love it. I love it. All right, well I want to encourage everyone and those people listening to this show right now, do it and let us know in the comments section below this podcast over on the Show Notes page, which is BiggerPockets.com/Show260 , let us know how that turns out for you. I kind of want to read those stories so check it out at BiggerPockets.com/Show260.
With that, I actually want to shift gears to the next segment of the show which we lovingly refer to as our Fire Round.
It’s time for the Fire Round.
Brandon: All right, let’s get to the Fire Round. Normally, the Fire Round is a collection of questions that come directly out of our forums. However, being that this isn’t specifically a real estate show, I’m not going to ask you how do you find deals and all of that stuff. I thought we would actually change this up a little bit. If you’re up for a little bit of fun here, I’m sure people will ask you this occasionally—I thought it’d be fun to kind of do a mock negotiation on a piece of real estate. Does that sound good to you?
Chris: Yeah, let’s go for it.
Brandon: All right, so in this situation—Scott, do you want to be involved or do you want to do it or do you want to do it together? How do you want to do this?
Scott: I’ll leave it to you.
Brandon: Okay. All right. So I’ll say that I am trying to—I called you because I saw I don’t know—you have a big banner out on the highway that says that you buy properties and I’ve got a nasty property. And I want to sell it. I’ve got this problem, just a little back story, I’ve got a property, I kept it as a rental for a while. I don’t like being a landlord. I just want to get rid of it. So, I call you up and I say, hi, I heard you buy properties. And I’m looking to sell.
Chris: Yeah, all right. Yeah, excellent. I mean, what do you got in mind? What are you thinking? What are you up against here?
Brandon: I’ve got this three-bedroom house over in a marginal area and I’m just kind of feeling out the idea of whether I want to sell it or not.
Chris: Marginal area?
Brandon: Yeah, it’s kind of like there’s that Starbucks down the street but it’s starting to get into that neighborhood that gets a little bit sketchy down there by the railroad tracks.
Chris: Sounds like you’ve been dealing with this for a while.
Brandon: Yeah, yeah. I’ve had it for three years, four years now.
Chris: Sounds to me like you had some real aspirations for this when you first got it.
Brandon: I mean, at the time, I had read this book Rich Dad, Poor Dad and I wanted to be a real estate investor but man, it’s just a lot harder work than I thought it would be.
Chris: So you really have put a lot into this.
Brandon: Tons. I mean, I’ve probably been there every week for the past four years working on something that’s breaking or dealing with an eviction or a tenant. Driving me crazy.
Chris: You know, people have no idea how hard this stuff is.
Brandon: They don’t.
Chris: Everybody on the outside, they think this stuff looks easy. You’ve been knocking yourself out for years.
Brandon: Yeah, I mean everybody talks about how easy it is but man, they just don’t know. So I’m just thinking maybe I’ll sell it and I’m wondering what you can pay me for it.
Chris: Well, it sounds like you’ve put a lot of thought into this.
Brandon: A little bit. I mean, I’m not exactly sure how much to sell it for. Some real estate agent told me it as worth around $300,000.
Chris: Some real estate agent?
Brandon: Yeah, yeah. A buddy of mine, his brother is a real estate agent so we were thinking about maybe listing with him but agents just, they’re annoying. They want me to clean the house all up and they take their big commission checks. I thought maybe I’d save the buyer a little bit of money and just go direct.
Chris: Yeah, I’m interested. But you’ve got people you could talk to. You’ve done a lot of research. I mean, why me? What can I do for you? Why would you call me?
Brandon: I mean, I saw your sign on the highway and it just looks like this is what you do and I like working with professionals. If this is what you do, it just would make it easier, I think.
Chris: But you wouldn’t call me just based on seeing a sign. I mean, that’s crazy. How can I help you?
Brandon: I mean, if you want to buy the property, that would help me a lot. I just would like to sell it.
Chris: All right. It sounds to me like this has been a frustration with you for a long time.
Brandon: Yeah, definitely.
Chris: You had some aspirations for this in the past but you’re kind of fed up with it, would like to take as much as you can get.
Brandon: Yeah, that’s right.
Chris: But just kind of put it behind you.
Brandon: Yeah, definitely. I would love to put it behind me.
Chris: Well, for me, I mean I’ve got some constraints. I mean, it would be hard for me to know what I’m getting into without actually seeing the place. I’d love to do this with you if I could. We’d have to do it in a way that would work for me. And for it to work for me—you’re not going to like this and I don’t blame you for walking away, but for me to make it work for me, I’m going to have to come in and the price is probably less than what you might get if you waited longer. Because I’ve got a lot of the same problems. I’m going to have to turn this thing over. I can help you solve this relatively quickly but it might not be worth it to you to do that.
Brandon: Well, I mean I want to do it. I think it’s worth moving forward. I mean, I know all the agents have $300,000 but that’s pretty high. I know that it’s not worth that but do you have a number that would work for me?
Chris: Well, I got a number but I gotta tell you something. It’s low. My number is low. You’re going to hate it. It’s going to be lower than what you expected and it’s going to be less than what you thought you were going to get.
Brandon: Low—I mean, how low are we talking?
Chris: $5,000. Let me ask you something though. Let me talk about what I just did.
Brandon: Yeah, please. I want to. I like the, “you’re not going to like it”. When I read your book, I really like that part.
Chris: Yeah, so human wiring. Caveman wiring. It doesn’t matter what your gender is. It doesn’t matter what your ethnicity is. In order to keep us alive, the human wiring had to have a negativity to positivity ratio of about three to one. You know, we predict 17 of the two actual calamities that are going to happen because in the caveman days, the two actual calamities are going to kill us. There would be a sabretooth tiger or grizzly bear in that cave that we’re thinking about going and sleeping in.
But in today’s survival, that completely works against us. So if I’m going to throw a number out, I need you to think of a number that’s worse than what I’ve thrown out so that my number is actually going to be really good. So you’re not going to like this. This is going to be low. And then I’m going to let your caveman wiring kick into gear, the three to one negativity ratio. I’m going to have a feel for, I’m going to know in advance what I’m going to do to make this work. And I know you’re not going to like it so I’m going to make you imagine worse.
So I get on basic even market, if your aspiration is $300,000, that’s probably $300,000 as the best house with the same number of bedrooms and bathrooms in the best neighborhood. But this is not a best house and it ain’t in that neighborhood. Or it actually might be the best house in that neighborhood. Maybe you’ve gone and you tried to be a little bit more reasonable and you looked at the top eight in your neighborhood, so if the house was not a fixer-upper when it’s all finished and done, this might be the top price.
But you’re also going to have seen the low prices and then you’re going to say to yourself, oh my God, if it’s $300,000, maybe you find out about a foreclosure that was sold for $75,000. You gotta have that information. I’m probably not going to come in at the $75,000 number but I don’t want you to be disappointed when I come in at $100,000. So I’m kicking in your caveman wiring to get you to imagine worse so if I finally do throw in a number, and I may actually throw in my low-end number. We’ll find out if it’s a lot more effective than throwing in a low-end range. If I say, a house like that, I mean $75,000-$100,000. And you’re going to hear that $75,000 and be happy with $100,000.
I’ve done two or three things there to then stimulate, put you in an emotionally place where you want to say yeah, I’ll take the $100K. Because I’ve throw this stuff out there. There’s human reactions that are going in. If I throw in my low number naked, if you will, you’re going to think you can get more and I will not have triggered that negative reaction with you to begin with. If I want to buy the house at $150K, I might throw $100K looking to settle at $150K. You might have gone for $100K if I had thrown it at you and dressed it up differently emotionally.
So there’s some reactions here that’s going to take place and what’s going to take place is, if I threw a number, for lack of a better term, naked. Then you’re going to want more. You’re not going to be satisfied. Let’s say I was really honest with you and I gave you my deep down honest price of $100K. You’ll never be happy with that number. You’ll always think you could have gotten more which means we’re going to have problems at escrow and we’re going to have problems at inspections. Every opportunity you have to back out because you had second thoughts because you agreed to my number, you’re going to stick me back. You’re going to try to get me back.
Brandon: Let me tell you from my side what I felt there as the person who wants to sell my house. I love the fact that you came at me with “You’re not going to like this”. I love it. Because initially, my thought was, he’s going to offer me $12,000. I’m going to hang up this phone. So if you did then come back to me with $75,000-$100,000, that’s where we stopped the negotiation thing. But also, you came at—your line about, “People just don’t realize how hard this is”, like even though I was faking this negotiation, I was like, that’s right. They don’t. In real life, I was like, they don’t get it.
Instantly, I was like, this Chris guy, I don’t know if you’re a landlord at all but you get this. You know this stuff. It’s hard. And the fact that you said that, you empathized with me, this is hard. It’s not my fault that I’m getting rid of this property. I didn’t lose it. I didn’t mess up. It’s just a hard business. And I don’t want to be in it anymore. I really like those two things. That’s what I felt when you were negotiating with me.
Chris: Yeah, what all that does, of course—first of all, I’m not faking. I mean, I’m listening to you, I’m dialing in, I’m appreciating you and I’m respecting you. That’s the missionary side of me. The mercenary side of me, though, also is, I know we gotta go through escrow. And you’re going to have all sorts of opportunities to go sideways.
And one of the most critical factors in whether or not you’re going to go sideways is how you were treated in the process, how you felt about the process, whether or not you felt respected and appreciated, whether or not you got the best deal you could have or whether or not you felt like you got beat into it. Because this is the mercenary in me, is doing this for a reason. And I know what the process looks like.
Brandon: That’s awesome. Scott, anything you want to add in there about like the dialogue we just had?
Scott: Yeah, it was just fascinating to see these tactics in practice, I think, and just kind of watch how you guys—if anybody can, I would encourage you to watch the YouTube version as well because you can actually see how Chris and Brandon are reacting to these statements they’re doing, the body language. And I think it really impacted part of the negotiations here. You could see, hey, it was really—I see that this must be difficult for you. I think that was an important component of this whole thing.
Chris: Body language and tone of voice tell you exactly what’s going on behind the guys’ eyes while the conversation is taking place. And the reaction to it also—I will run a script in my head while I’m talking to somebody because it’ll make all the difference in the world in my tone of voice and how they react to it. Like, if I’m looking at you and I’m thinking, you’re the dumbest person I’ve ever heard, that’s going to come out of my voice and your emotional intelligence is going to pick that up. It’s going to kill my rapport. But while I’m talking, I’m like yeah, wow. In the back of my head, it’s like, you worked really hard on this. You really have been through a lot. It’s been really hard on you. That’s going to come out in my voice and you’re also going to pick that up and we’re going to shorten the distance between it as well.
Scott: One of the things I noticed, real quick, is Chris you basically forced Brandon to give away all the information in the negotiation. You didn’t give him anything about your position at all from that. And I’m wondering if that might be a big challenge for me or for maybe some other newbies in practicing this because we’re going to want to—some of the times when Brandon would say things, he wanted you to give away some information to name a price, to reveal something about yourself and you just politely, obviously professionally refuse to do so.
Chris: Yeah, that’s the great thing about this approach. You gather tons of information without giving any of it yourself. Now, there’s another issue here, too, which we call proof of life of the deal. Maybe Brandon’s calling me and he has no intention of making this deal with me. He just wants to pump me for information. That happens a lot. And if they’re out there pumping people for information, it’s also your opportunity—is this guy a legitimate prospect or is my dealing with him going to change into a legitimate prospect? And so the feeling of being appreciated and understood, I don’t give up any information.
I’m not invested in this deal and I might just flip him from an unqualified prospect to a qualified prospect. And actually, we don’t believe in always be closing. For lack of a better term, we believe in always be gathering information and always be qualifying. If you’re gathering information to qualify, the close will come. But if your desire is to always be closing, probably the trap I’ll fall into, Brandon knows that he can call me and pump me for information because I’m going to be so in lusting for closing that I’m just going to give all the information that he wants and he’s going to confirm and say, well, I’ve got experience in that area and the actual range would be this, this, and this.
Or I’ve got experience in that area and the one thing that’s holding sellers back is the particular type of repair. I’m willing to show off how smart I am and it’s amazing how much painting a house makes a difference in value and he’s going to paint the house before he puts it on the market. I may give him—I may try to demonstrate all this expertise to think I’m getting the deal when in fact, he’s just pumping me for information so there’s a real danger in that and I think it’s gotta be 40-50% of the interactions that we’re in. Where they’re just pumping us for information and when they get that information out of us, they’re going to move on.
Brandon: Yeah, that actually does happen quite a bit like if I send out direct-mail letters to people, I get a lot of phone calls of people who just want me to tell them what they should go and do to their house to fix it up or what they should go list it at, even figuring out what I’m doing. So very, very common. So cool.
All right, well let’s shift one last time to the last segment of our show which we lovingly refer to as our Famous Four. Let’s get to today’s Famous Four. These are the same four questions we ask every guest every week here on the podcast. I’m going to tweak the first one a little bit being that this isn’t a real estate investor interview.
The first one is usually, what’s your favorite real estate book, and the second one is what’s your favorite business book? But I want to tweak the first question from real estate book to just what resources do you enjoy and do you read? Like blogs, newspapers—what do you enjoy reading?
Chris: A blog that I’m a regular reader of is Eric Barker’s blog.
Brandon: We just had him on the show.
Chris: I love Eric’s stuff. He’s actually turned me onto a lot of resources that actually works in negotiations and communications across the board so I love Eric’s blog. And I know Eric personally. I love his book and his blog and he’s a great guy. Smart guy, too.
Brandon: He was Episode, I think it was 259 in the podcast. It might have been 258 or 257. But if you guys want to listen to that, go to BiggerPockets.com/podcast. It was a fantastic interview. So check it out. All right.
Scott: Question number two, you mentioned a couple of books on the show already, including Eric’s. Do you have a favorite business book in general that you’d recommend for real estate investors?
Chris: I’ve got to tell you, forgive me, this is going to seem completely shameless. We get so many people that are using my book in real estate. And actually it’s probably the largest growing segment of the people that we are specifically servicing now. We’re putting much more effort into people involved in real estate of all kinds. And it was the reason they tend it as a negotiation book for everybody and we’re diving deep into real estate these days.
Brandon: That’s cool. You know, I’ll tweak the question a little bit. This is something that Tim Ferriss asks a lot, is there a book that you give as a gift other than your own that you’ve ever gifted the most? What book would you give to somebody as a gift if it wasn’t your own?
Chris: There’s several there that I’m into a lot. I read, I think it’s The Psychology of Flow. I’m reading stuff about Flow these days. Fascinating. Steven Kotler is the author. It tells a lot of stories about phenomenal X-games athletes and this whole idea, I think it’s the next generation of business performance will come from understanding the psychology of flow. I will also tell you a book that I probably am going to be giving away a little bit more. It’s not a business book, it’s U2 by U2. And it is a brilliant book. Think of You Too as a business that has lasted ridiculously successfully for 30 plus years.
How many business enterprises of a team of four individuals together in the entertainment business have held together for as long of a period of time as those guys have? And they talk a lot—you get to know the dynamics of how they trusted each other, the mistakes that they made in not trusting each other different times, their determination to have a mixed bag of personalities and how they blended those personalities together and work as a team.
There’s an old saying, “You want to go fast, go along. You want to go far, go as a team”. These guys are kind of like the ultimate team players in a ridiculously successful enterprise that happen to be in the entertainment business. And I have found that to be fascinating and I love their music and I love the themes behind their music and these guys were four average guys. I mean, there was—you saw nothing special in these guys other than Bono as a teenager got into a lot of dangerous fights. He was a brawler and almost a gang member. But they’re four very diverse guys so to me, it’s a great book on team concept and I really enjoy that book a lot.
Brandon: That’s awesome. That’s a unique way of looking at it.
Scott: Just to chime in here, I googled it real quick. I think that the other book may be The Rise of Superman.
Chris: The Rise of Superman. Yeah, there you go. The Rise of Superman.
Scott: By Steven Kotler.
Chris: That’s a fascinating and fun and really thought-provoking read. And it gives you insight, like if you can get in the flow and it’s all about triggering psychologically your own brain’s production of different chemicals. Like, one of the things that I remember reading, like cocaine is this ridiculously addicting drug because you get great energy, your pattern recognition is very high, your creativity is very high. Cocaine is a drug—all it does to you is it triggers your own body’s releases of dopamine. It’s you on your own brain chemicals. It increases your own internal releases of dopamine and decreases your reabsorption of it. You don’t need cocaine to do that. You can learn to trigger that at will yourself.
Scott: That’s awesome. So, what do you do for fun? What are some of your hobbies?
Chris: I love spontaneous travel. I’ve got a Harley. If I can jump on my Harley and just find out where the bike is going to take me, I mean I dig that. I used to live on a boat. Let me untie it and see where the boat is going to go. So one of the things that I enjoy the most is I love spontaneous travel. That is anything that’s adventurous in discovering places and people that I haven’t seen before.
Brandon: Awesome. I love that, too.
Scott: That sounds like a lot of fun.
Brandon: I don’t have a Harley though but I’ll get there. Number four, last question from me of the day. What do you believe sets apart successful—we’ll say real estate investors or just anybody—from those who give up, they fail or they never get started with what they’re trying to do?
Chris: You know, it’s optimism and resilience. That has a tendency—what’s your mindset? Like, as a hostage negotiator, I think I really raised the level of my game when I realized we’re not guaranteed to succeed but we’re guaranteed the best chance of success. We’re going to fail. You’re going to make mistakes. They say perfection is the enemy of profitability. I mean, being willing to fail and make mistakes. Not kill yourself over it. Which is actually a lot of what flow is about. Flow is, there are a number of people that their natural state is flow. Adolescents. They walk around in nearly a state of flow all the time because they fall down, they don’t care.
Now, as an adult, we don’t want to fall down. We don’t want to be reckless financially. Or we don’t want to be reckless physically because then we hurt ourselves and we don’t heal. But then playing it safe physically goes across the board and we start playing it too safe across the board and we’re afraid to embarrass ourselves. We’re afraid to make a mistake. And that causes us to see 19 of the two actual calamities that are going to happen. Getting back into, I feel okay, who cares? Who really cares? Let me take a chance and find out what’s going to happen. That’s where great discovery comes from.
Scott: That’s awesome.
Brandon: Yeah. Well, cool. Scott, take us out.
Scott: Chris, where can people find out more about you and where do people buy your book?
Chris: All right, Amazon is consistently the best price. Never Split the Difference on Amazon and if you have any reservations about it, go in there and read some of the reviews. They’ll tell you it’s readable and it’s game-changing. People started making—you’re five pages into the book and you’ve got stuff that you could use. So Amazon—I don’t work for Amazon. That’s just hands down the best price.
Chris: If you want to take a deeper dive, I mean a really deep dive and get the gateway training that we offer, subscribe to our newsletter, which is The Edge. It comes out about once a week. It’s free. I’ve got a friend that used to say, if it’s free, I’ll take three. A lot of people that read the book also love The Edge because it’s a great supplement and it’s short, digestivable bites, operational stuff. It’ll take you three minutes to read through it.
Brandon: Where do they go to get that?
Chris: Quick and easy way to subscribe is to send a text to the number 22828 and send “FBIEmpathy” all one word, don’t let your spellcheck put a space between FBI and Empathy and make sure you override that. “FBIEmpathy”, all one word, to 22828. You’ll get a text box back and sign up for the newsletter. But then it’s a gateway to everything we do.
Brandon: I’m going to do it right now.
Scott: That’s awesome. Me, too.
Brandon: Thank you, Chris. This was fantastic, really really good stuff. I can’t—this is one of those books I feel like I can put on my list, like read every quarter because I’m going to need to re-polish my skills and get them better. I just appreciate you putting it together.
Chris: My pleasure, guys. Thank you for having me. This was a lot of fun.
Brandon: Awesome, thanks.
All righty, and that is our interview with Chris Voss. That was fun. That was a lot of fun. What do you think, Scott?
Scott: I thought it was great. I’m a big fan of this guy. I just love his story and obviously, he has one of the most distinguished careers I can really imagine someone having, saving lives, rescuing hostages, decades of experience dealing with terrorists and robbers and criminals and just applying that now to the business world in a way that we can understand and use. Awesome, awesome.
Brandon: That’s fantastic. Already today, ever since reading this book, I’ve been just putting these little things that I’ve learned, like little tips like mirroring in the things that I do and it’s been awesome. So yeah, go and try it. Podcasts, this stuff is great but like the real goal of podcasts is to learn something that will apply to your life. So go out and do this in your life. Don’t be afraid to negotiate a little bit.
Scott: And one little quick tip here, I tried signing up for his newsletter and had a little trouble with his thing about texting 22828 “FBIEmpathy”. I had a little trouble with that. So if you struggle with that, you can just Google Chris Voss Newsletter and the first result there will help you sign up if you’re interested in that.
Brandon: There you go. All right. Good deal. So with that, we’ve got to get out of here. Real quick, can I have your shirt? I like that shirt a lot.
Scott: It’s blue.
Brandon: I want to buy it. Yeah, how much for that shirt?
Scott: Give me two or three signed copies of your book and you can have it.
Brandon: I can have it? Sounds like you’ve thought a lot about this, Scott.
Scott: Are you negotiating with me for my shirt off my back?
Brandon: I tried to negotiate the shirt off your back. All right, guys.
Scott: You’re going to take everything.
Brandon: I don’t split the difference. All right, let’s get out of here. For BiggerPockets.com, my name is Brandon and this is—
Scott: Scott Trench.
Brandon: Signing off.
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