Personal Development

The No. 1 Most Important Factor to Win Any Negotiation

Expertise: Personal Development, Real Estate Wholesaling, Real Estate Investing Basics
97 Articles Written
business partners handshaking after business success negotiation

Do you know who you’re negotiating with? Knowing is non-negotiable. Here’s why.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

You have to be aware of who you're communicating with for the negotiating process to be effective. This notion transcends any industry, any real estate niche, and communication in general—but it's especially the case when negotiating.

Let's discuss this in relation to real estate. When working on deals, communication is key. When I was a one-man show wholesaling, I spent a lot of time studying behavioral psychology in reference to buying habits and negotiating. Voice inflection, mirroring, and triggering are some of the techniques I discovered in my studies.

What are your strengths as a communicator? And how much do you know about the person you’re speaking to? Without going into some really nerdy and scientific stuff, I learned that for best results, you should try to identify the personality type of the receiver.

Related: How to Negotiate: 7 Real Estate Negotiation Tips

Why Is It Important to Negotiate?

Becoming a successful real estate investor requires landing the best deals. And those deals are never the first offer. It can be hard to build your negotiation skills, but start here: You're looking for a win-win—and you winning is 50 percent of that success.

The first offer is never the best offer. You can usually get a lower price or a better deal by following a smart negotiation strategy. You’re not being a “bad guy” because you aren’t saying yes right away. Yes, the art of negotiation might make you nervous. That’s expected! But seeking better terms or a discounted price is nothing to be ashamed of. You might even help your negotiating partner achieve something they want, too!

The Impact of Personality Types on Negotiating Styles

During my studies and after hours of application (actually talking with sellers), I mastered the art of closing deals over the phone without meeting the sellers (or walking the property!)—critical skills for anyone who is looking to increase deal flow and maximize time efficiency.

In order to understand sellers, I learned how important it is to know who you are talking to. Pay careful attention to the first impression you receive. To set yourself up for a successful negotiation, learn the psychological patterns of the seller and their personality type. However, this is can be difficult if you are unaware of what to look for.

As you may know by now, it’s not a one-size-fits-all approach when speaking with sellers. Some sellers are more personable, while others want to limit the chit chat and get right down to business.

So, how can you tell who’s who, and how do you steer the conversation to accommodate the different personality types of sellers? Below is an outline of each type and suggestions for dealing with each.

Related: 8 Negotiation Techniques That Will Help Every Newbie Land a Better Deal

habits-wealthy-people

Personality Profiles & How to Negotiate With Them

Successful negotiators pay careful attention to the personality profile of their negotiating partner. After all, there’s no one-size-fits-all strategy. Use common sense and conventional wisdom to tailor your discussion to your partner.

The Red personality

  1. They wear their emotions on their sleeves and will tell you right away what they want to accomplish.
  2. These have nothing to hide.
  3. They tend to use slang and may even curse.
  4. They want to transact with someone who is a friend first, because they believe a friend wouldn’t let them down or steer them wrong.

Tips for dealing with Reds:

  • Be prepared to get sidetracked in the middle of conversations in order to earn their trust and business.
  • If you are normally very professional, you’ll need to let your guard down a little and use first names.
  • Look out for common interests—finding a shared passion can help you gain their trust.

The Blue personality

  1. They have no idea what they want.
  2. They are emotionally open and willing to share personal stories of heartbreak.
  3. They are the gazelle of the safari—very jumpy and scared off easily.
  4. They are very loyal, and once they make a decision, it’s worthwhile.
  5. They are very family-oriented and have a people-first mentality.

Tips for dealing with Blues:

  • You have to define what they want for them, because they are seeking help.
  • They need to be coddled. Slow down, take your time, and lead them to safety.

Related: How to Use Interest-Based Negotiation to Close True Win-Win Deals

The Green personality

  1. They keep their cards close to their chest and want to receive an offer first in order to make a decision.
  2. They aren’t looking to make friends.
  3. They consider this a business decision, and the numbers are what matters most.

Tips for dealing with Greens:

  • This personality is a heavy shopper with little loyalty—be on your toes.
  • Ask for a specific goal. Be direct: “What is a reasonable offer for your property?”

The Brown personality

  1. They are closed off emotionally, direct with their goals, and all about the bottom line.
  2. They are typically professionals or entrepreneurs with limited time.
  3. They aren’t looking for new friends.

Tips for dealing with Browns:

  • Let them know up front whether or not you can help them accomplish their goal.
  • Always be prompt.
  • Build business rapport, not personal.

These may be generalizations to some extent, but this is what I’ve learned and have seen in years of negotiating real estate. Once you’re able to identify who you’re speaking with, you will absolutely be able to close more deals.

Do you have other traits and triggers that can help close deals?

Please share in the comment section 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 ...
Read more
    Kevin Quat Real Estate Broker from Hilton Head Island, SC
    Replied 3 months ago
    Very interesting. Thank you for sharing your experience and breaking it down. Does knowing oneself based on these categories help us better negotiate? I recognize know thyself is wise.
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    Kevin, Thanks for reading. Absolutely, when you know your demeanor you will be able to see what personality you conflict with. I must say though you can engage with anyone by using certain techniques.
    Eric Nelson from Palmerton, Pennsylvania
    Replied 3 months ago
    I think all of those personalities are very true. I'd like to think of myself as a chameleon because I tend to do a little of each. Although I am a newbie ,I did door-to-door sales for 5 years. So I never knew I was doing what you we're explaining
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    Being a chameleon is good especially if your mirroring the other party. With your door to door sales you should be a success talking and negotiating with people. That is one of the hardest jobs to do
    Bernie Neyer Investor from Chanute, Kansas
    Replied 3 months ago
    Several year ago I can read a book on selling. I think it was entitled, "How to Sell Anything to Anybody." The author outlined two different types of customers. One would be rational in examining the alternatives, but then use emotion in making the decision. The second would use emotion in examining the alternatives, but then rationalize their decision. Your four different colors break these down into sub groups. Your article brought that back to mind. I'm reminded of something I think Steven Covey wrote, "People have to buy into you, before they buy what you're selling."
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    Bernie, Absolutely, that is the know, like, and trust factor. Our sales team never use the approach of selling, we seek to identify the problem and see if there's a way we can help them. It makes it easier when you have a soft approach. Steven Covey has great stuff by the way
    Ed Dunn
    Replied 3 months ago
    Excellent advice, Marcus! These concepts work well in any interpersonal communication. It's called the Platinum Rule. Treat others as they would like to be treated... Well explained and illustrated in the book: The Platinum Rule by Tony Allesandra.
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    Ed, Thanks for the book recommendation. I haven't read that one, but that is a great foundation to have.
    Curt Todd Investor from Happy Valley, OR
    Replied 3 months ago
    Now we just have to learn how to color people. But, one thing we should all know by now these days; "All colors matter". :)
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    You're spot on Curt
    Teresa Nelle Real Estate Agent from Maui, HI
    Replied 3 months ago
    Great article - thank you! Yes I agree, knowing the Sellers personality does make a difference - do your homework!
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    Teresa, thank you for reading and the great thing about it is; its not that difficult once you have an understanding.
    Joaquin Camarasa Real Estate Agent from Washington DC
    Replied 3 months ago
    Thanks for this article Markus. It is very insightful. Gathering the information about the personality traits definitely pays off down the road to know how to talk to them.
    Shane Feist Investor
    Replied 3 months ago
    I would say you are really close on these personality types.
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    Shane, This is from theory and practice. From study and from experience. I have run into challenging and welcoming personalities.
    Brent Huczel
    Replied 3 months ago
    This is very similar to the Six Thinking Hats book by Dr. Edward de Bono. Thanks for your insight Marcus and great podcast episode. I'm in the Phoenix area myself.
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    Brent, thanks for reading and listening to the podcast.
    Angel Dejesus Property Manager from Boston, Massachusetts
    Replied 3 months ago
    Great insight. Love reading about personality types. Hope you write about your experiences with each. How did you handle the situations and what was the outcome.
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    Angel, thank you. You just gave me fresh content to share. This will be coming out.
    Dalia D. Real Estate Broker from Bellingham, WA
    Replied 3 months ago
    Thank you Marcus. Enjoyed the read and your interview on BP. Enjoy today.
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    Thank you Dalia, I was surprised I had double episodes on the podcast 386 and 387. Lucky me, no thank you for the encouraging words
    Bret Ehlers Investor from Holladay, Utah
    Replied 3 months ago
    From the Seller's first hello you know which color you are working with. Thanks Marcus.
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    Bret, you must be a pro, I have not gotten that good yet. Lol
    Jeremy Hine
    Replied 3 months ago
    What questions do I ask or what actions do i take to bring out one's colors? Is there a short line to get to figuring out, that one's a red, he's a blue ?
    Brian Kittner from Rockland County, NY
    Replied 3 months ago
    Valuable content Marcus thank you for sharing! Any behavioral psychology literature you would recommend?
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    Brian, thanks, I would say NLP is a good place to start, but you have to eat the fish and spit out the bones.
    Brian Kittner from Rockland County, NY
    Replied 3 months ago
    Bruce Lee style: "take what is valuable..." I'll do some digging thanks!
    Nina Granberry Rental Property Investor from Brooklyn, NY
    Replied 3 months ago
    Thank you for sharing, Marcus. I became a wholesaler about 3 weeks ago and speaking to sellers is still one of things that gives me the most anxiety. However, I have been successful, and have gotten 3 deals under contract so far. One of the sellers I am working with currently is definitely a mixture of blue and green personalities. How can you do homework on these sellers when you are cold calling using something like mojo dialer? What if you do not have a lot of time beforehand to study some details about them before getting them on the phone? Are there quick tips you suggest? Thank you!
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    Congrats Nina, you really don't have to study the person but know the psychology behind each color and the person will identify themselves very quickly.
    Jules Louis Wholesaler from Pompano Beach, FL
    Replied 3 months ago
    Can you expand on the distinction between green and brown?
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied 3 months ago
    Jules, great question green are more open to the conversation and attentive where brown will flat out tell you if you can't get me this number don't waste my time.
    Steven Tucker
    Replied 3 months ago
    This is excellent and insightful information pliable to almost any type of sales, marketing and customer service industry. You can even use this in your own personal life. Thanks for sharing
    Christopher Smith Investor from brentwood, california
    Replied 3 months ago
    wondering which one I am? :)
    Chris M.
    Replied 3 months ago
    This is a great article not only for negotiating with others, but also to improve self-awareness of my personality in negotiations. Thanks!
    Lesli Dixon
    Replied 2 months ago
    Indispensable information... I've got some psych reading to do!!
    Jim Butterfield Investor from Cornelius, Oregon
    Replied 2 months ago
    thanks great tips for talking with sellers