Why Expert Negotiators Love to Hear “No”

David:
This is the BiggerPockets Podcast, show 683.

Chris:
People feel trapped. They feel like they’re being led into a trap. Concern is a negative emotion. They’re automatically getting dumber. If they say no and they don’t feel trapped, then they’re not going to be getting dumber in the moment. They’re going to be more likely to hear you out. They’re going to be more likely to consider the options. They’re going to be more likely to think of the next steps. It’s the same neuroscience rule. Let me keep you out of negative thought. The chances that we can collaborate effectively are much higher because neither one of us are getting dumber.

David:
What’s going on everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast, the best, the highest ranked, and the baddest real estate podcast in the world. I am joined today by my co-host, Rob Abasolo, who I love dearly as well as a fantastic guest on today’s show. We have none other than world-renowned expert negotiator, Chris Voss, author of Never Split the Difference and other books coming in to talk with us about how to negotiate real estate, specifically. Chris has recently been introduced into the world of real estate and the negotiation that happens therein, and he shares tons of amazing advice for how you could do a better job negotiating for the houses you want, and if you’re an agent or a loan officer, how you could do a better job negotiating for your clients. Rob, what were some of your favorite parts of today’s show?

Rob:
Honestly, man, I felt you were in your element on this one. You were given all these anecdotes about your real estate career and your brokerage and then he was like, “Yeah, and this is how the negotiation should have gone,” and then you’re like, “Yeah.” In this situation, I was just like, “Why would I talk?” I am watching a masterclass between two class acts on the art of negotiation so we get into things like tactical empathy and really understanding people where they’re at and deescalating a situation, and we even talk about a deal that I’m working out right now and hopefully pulling off the coolest seller finance deal that I’ve done thus far. TBD on that, but yeah, we get into some really cool stuff here.

David:
Yeah, you use some of the tactics that we’re actually talking about in the show to get to the point where you’re very close to putting that house in contract. Everybody, here’s what you got to understand. We have, as buyers, more negotiation leverage than we’ve ever had in my entire career of investing in real estate outside of 2010. Sellers need to sell homes. There’s more supply than there is demand. The tables have finally turned. As a buyer, if you have strong negotiation skills, it will get you further along than at any other time than I’ve seen. We’re bringing you an expert negotiator to teach you how to do a better job negotiating because it’s worth more money now than it ever has been before. Rob, I’d love to see you get that deal. I remember you actually calling me and us talking about it and you were like, “How do I get the person to do this thing?”, and the advice I gave you was explained and articulated much better by Chris than me, but it was along the same lines.
If you got to reset the communication, you got to get it to an emotional state that’s different. Don’t bring up seller financing right now, get to this point, and then do it. It sounds like you’re super close so I’m really happy to hear that that’s the case. Today’s quick tip, consider embracing tactical empathy. How can you understand where someone is coming from without conceding your own position? This is what wizards do that negotiate. It’s a way of acknowledging the other person’s position, getting them to let their guard down, getting them to hear what you have to say without actually giving up anything a value for yourself. Very valuable tactic to understand, a great strategy to use. You’re going to be very excited to hear what we had to say today and I don’t think that there’s a better person on the planet to be bringing it than Chris Voss. Rob, anything you want to say before we bring in Chris?

Rob:
No, man. Let’s get into it.

David:
Chris Voss, welcome back to the BiggerPockets Podcast. We originally had you on episode 260 and we’ve got you back now. You’ve been kind enough to give us your time as you’re traveling. I believe you’re in Montreal right now getting ready to give the keynote speech at a big conference. Is that the case?

Chris:
It is the case. I am in Montreal. It’s nice to see. I was around with my girlfriend earlier because I spent so much time in Vegas where I lived these days and I also just got back from the Middle East. I said it’s crazy that in the fall, the trees here are different colors.

David:
What color is it?

Chris:
Well, they’re red and they’re orange and they’re green. I’m not used to that. Everything’s brown in the desert.

David:
I think it’s hilarious that you’re in Vegas. I picture you like this Celine Dion character that people are traveling all across the world to come listen to and you just stay there and they go. They learn how to negotiate from you and so you don’t have to travel as much, but something tells me that’s probably not the case. What had you moving out to Vegas?

Chris:
Come on, In Vegas, Celine Dion, Sting was in Vegas. Compare me to Sting. See, I can live with that.

David:
See, I just don’t know enough about Vegas. Celine Dion was the first one I’d heard of where I’m like, “That’s brilliant. She doesn’t have to travel. She just lives there,” but yeah, you’re definitely much more of a-

Chris:
Elvis.

David:
There you go. You’re the Elvis of negotiating. In fact, I don’t think there’s anyone in this space. If people think negotiating, they immediately think Chris Voss. You’ve got that level of notoriety when it comes to this, so your first book, Never Split the Difference, is probably the most often quoted book in the space of negotiating. You’ve done an amazing job of carving out a reputation for yourself, and frankly, helping millions of people across the world with understanding how to negotiate better for themselves. You have a fascinating story. I’ll sum up some of it because we want to get as much information as we can out of the podcast.
You started off as a police officer in New York City. You worked some of the toughest beats there were. You were sharpened and forged in the fires of a very difficult time to be a cop in New York when crime was incredibly high. You were transferred to a little bit of a slower beat, didn’t like it as much, started to realize that I’ve got skills. You haven’t said this, but I’m imagining there’s a part of you that was like, “Look, I can’t grow without better competition, for lack of a better word. I need a more challenging environment,” so you ended up going federal. You met some people that introduced you to federal officers. You went to, I believe it was Quantico, and you got your FBI training, you joined the academy there, and you got out. Because you were a police officer, you were delegated a certain task that needed little bit of a law enforcement experience, and eventually, you were trying to get into the swap program, and you ended up in the negotiation program. Is there any big key pieces that I missed in that backstory?

Chris:
No. You hit the eye points pretty well. It didn’t say anything about me spending time as a country and western singer, but I think that was just a dream and so I never did that at all actually.

David:
Well, you’re in Vegas, right? So, never say never. There’s always an opportunity there.

Rob:
Listen, if you’d like to revive your career right here on the BiggerPockets Podcast and break off a tune, we’d welcome it.

Chris:
Yeah, I sing. I can sing off tune. Is that what you meant when you said break off a tune?

Rob:
Yeah, exactly.

David:
Well, one of your strategies is you have, what I believe you described, is the late night DJ voice. It’s one of the ways you sort of lull the opponent into putting their defenses down and so I can see that working for you in the country. Isn’t there a country guy right now that talks when he’s singing? I wish I could remember his name. Rob’s not going to know it. Do you know who I’m talking about, Chris? Hunt. Something Hunt. He’ll be singing and he just starts talking in the middle of a song. It’s very weird. You could expand on that style. Never Split the Difference completely changed the game when it comes to negotiating. You explain the psychology behind what makes people do what they do. I find that absolutely fascinating about you is you’re not just saying, “All right, here’s your tactical answer. When they do A, you do B.” You really dive deep into what makes people make decisions and how you can influence what people do. One of my favorite books is called Pitch Anything written by Oren Klaff. Are you familiar with that one?

Chris:
I am familiar with that. I haven’t read it yet. I intend to read it.

David:
Yeah, you’d probably love it. It’s a similar type of thing when you’re trying to get someone to understand your point. I’m sure if you read it, you’d be like, “This is elementary. This is exactly what I’ve been doing.” You’re maybe the first person ever, much like a Gracie that taught the world jiu-jitsu, you unlock the key to what makes people decide how they make decisions and then taught the masses, “This is how you can copy that.” In this base of real estate, this is incredibly important. Deals can be made or lost simply on the power of negotiation, so I want to ask you, what prompted your interest in bringing your skillset particularly to the world of real estate, which is the new book that you’ve got coming out?

Chris:
Well, as people are applying the negotiation concepts across the board, a lack of negotiation guidance for the real estate industry, whether you be buy and selling commercial, residential agent, there’s a lack of guidance there, and still human nature and people were applying it over and over and over again successfully in that area. I got approached by Steve Shull who was coaching residential real estate agents in Los Angeles, still is. Steve said, “Look, this is exactly what we need to be coaching these people on for the real estate profession,” and started collaborating with Steve.
Steve is one interesting cat. I knew Steve for well over a year before I knew that he played in the NFL. Normally, if somebody played in the NFL, you know that within the first five minutes. About three years after that, I found out he was a Super Bowl captain. Normally, those guys are waving their trophies around because that’s all they got to talk about. Steve had involved his life so beyond that that it made sense when I found that out about him. I said, “This is an interesting guy.” He’s not an insecure ego-driven guy. He just likes to help people, so collaborating with him has been a ball. I really like the guy.

David:
He has a background in real estate?

Chris:
Yeah. Well, when got out of the NFL, he went to Wall Street to make a lot of money on Wall Street. Then he got across opportunity to be a residential real estate agent. Steve is, “Give me a system. I’ll work everybody else out there,” and turned around, made a ton of money in real estate, and then decided that he loved to help people get better, so having been a football player and having coaches coach him to be a better human being, he wanted to do the same for other people. Then he ran across Never Split the Difference and changed the approach on everything.

Rob:
I got to imagine with Never Split the Difference, you probably have people reach out fairly often to talk about some of the crazy deals that they’ve successfully executed just by using a lot of the philosophies and a lot of your tactics and that. Do you have a lot of people that reach out with success stories in that vein?

Chris:
We get one way or another. Somebody shares a story of a life changing deal with me or my team almost every week. We hear from people all the time, “This deal is going to change my life,” whether it’s an employee negotiating with their employer or whoever it is. We got a brand new guy on the team that’s very experienced hostage negotiator now teaching how to apply in real life who’s learning the skills in real life. Yeah, I just was on the phone with him earlier today talking to me about how he got upgraded to a suite in a hotel. It’s our standard routine, getting a free upgrade to a suite if they have them. The crazy thing about it is the way we do it, the hotel clerk doesn’t feel like you took advantage of them. As a matter of fact, they bond to you. He says every time he passes front desk, guy calls up, “Hey, how are you doing? You’re enjoying your stay?” They bond to us. Even in little ways, it starts to eliminate the friction out of your life and suddenly life is a lot more fun.

Rob:
Yeah. Do you feel like you negotiate now or is it just second nature, like just something that you live by and so it always just feels very seamless? How often in your mind are you like, “I’m about to turn on the negotiation switch”? Does that ever happen?

Chris:
Well, we forget that what we feel is ourselves or our natural abilities. We learn. Everything is learned. What’s my motivation? I like to connect and I do like to be left better off as a result of the connection. Yeah, I’m negotiating all the time, but I don’t negotiate against people. I negotiate with people. I just connect with them. What happens if they don’t have a suite available in a hotel? That’s one of the key issues on a suite upgrade. They can’t give you what they don’t have. I still want to connect with the person behind the counter so that maybe I need something the next day, and that’s what Don was telling me. He came back to the counter the next day because he ran out of coffee in his room and a young lady that gave him the free upgrade comes out with an arm load of coffee pods. He just wanted two. She almost brought the box out to him because he connected with her. We just want to connect with people and then good things have a tendency to happen as a result.

Rob:
On this book, obviously in the world of real estate, the tension seem a little bit high. Do you feel like, in general, the way that the process is laid out with making an offer and negotiating an offer and trying to get into escrow, do you feel like there’s a little bit of a disconnect between all parties going into it? Because for me, I feel like I go into real estate very often and it immediately feels like when I submit an offer, I’m definitely not connected with the other party and there’s just tensions always feel high as soon as we hit the send button on that kind of stuff.

Chris:
Yeah. Well, unfortunately, it’s applied in a lot of instances is agents are basically trying to keep buyer and seller apart because they’re afraid the emotions are going to get out of control, but what that does is create even more uncertainty. They don’t get the opportunity to really get to know each other as human beings, and so people are left in the dark. A long time ago when I tried out for the FBI’s hostage rescue team, the FBI’s version of the Navy Seals, they wanted to stress us out maximumly psychologically, not just physically but psychologically even more. What they did was they kept us in the dark about what we were going to do. They’d take us for a run. The unknown is the stressor. You can endure anything if you know when it’s going to be over or if you know that it’s going to be over, but the definition of traumatic stress is overwhelming and unrelenting, which means you don’t know when it’s going to be over. You’re kept in the dark. The unknown is a stressor.
What does that have to do with real estate? Well, agents are keeping people apart, which just as you said, now you’re launching an offer into the unknown. You’re not connected to the people on the other side. They’re not connected to you. You’ve got nothing but unknown going on there, which is a defensive move on the agent’s part, but increases the stress on everybody involved, which is not good for the process because then if the offer is rejected or there are inspection issues, you created a process where stress is increasing every step of the way and then a seven million dollar deal to get tanked over a $1,500 inspection because people were kept in the dark, people kept apart, and the stress levels were kept high, and people get fed up and like, “I’m not doing this anymore.”

David:
That’s probably one of the biggest complaints that my real estate team receives from our clients is an offer is written and the agent reaches out and they gather what information they can from the other side, and it’s just like you said, both sides are trying to keep their cards as close to the chest as possible because when you’re afraid or you’re not confident, that’s your natural response is just to close off. They don’t know what to say. They’re going to try to say as little as possible. Then the agent isn’t communicating with their client what’s going on. They know in their own head what they think that needs to happen, but hey, there’s no news so they’re just not reaching out and the buyers are over there just marinating in worry and stress. They’re just getting cooked from the inside out not knowing what’s happening.
In that state, it’s almost like you feel like the world’s against you. You’re not assuming, “Oh, the sellers are going to accept my offer and it’s a great offer.” You’re thinking the worst of everything. Now, you’re mad at your agent. Just like you said, when you finally do get a counter offer, that can be a great solid thing. You are receiving it from this lens of mistrust and anger and stress and all this negative state you’re in and the knee jerk response is like, “Screw them. I’m not giving them a dime,” or “I’m not going to up my offer by $400,” or whatever the case would be. What’s your experience with seeing that element of human nature as it plays out and how do you try to combat against it?

Chris:
Well, that plays out all the time. What ends up happening is one of the big problems for especially the residential real estate market or any real estate market. You’re never going to refer your agent. The process was so painful that the only way you can avoid it with that person is to never go through it with that person ever again. Agents are not taught the right way to do it. You can’t really blame them from doing it the wrong way. You could blame them only if they haven’t known what the right way is. The right way, in many cases, is counterintuitive or the right way isn’t well modeled for them, and you touch on one of the points. You’re in the dark because the agent’s not communicating because agents communicate when there’s good news or there’s bad news.
When is there going to be good news or bad news? You don’t know. When are you going to hear from your agent? You don’t know. So, you’re sitting there left in the dark waiting to see. Now, I manage this personally. Somebody finally showed me how to manage it in a kidnapping scenario. I didn’t know the proper way until somebody finally told me the right way to do it because we’re working at kidnapping in the Philippines and I’ve got my hostage negotiators in touch with family members of the kidnapped victims across the US because you never know who the bad guys are going to call. Bad guys call up family members to get money so you got to get hostage negotiators next to every family member however many of them there are wherever they are. The family does not like any of my people. There’s one guy from the department of state that they love, a student named Ted. Great guy, quirky dude, sweetheart of a guy.
Ted finally calls me on the phone, he says, “The families never know when they’re going to hear from the hostage negotiators. That’s why they don’t like you. They like me because they always know when they’re going to hear from me. I’m going to set an appointment for a call, and whether I got good news or bad news, I call on the appointment, and if I got nothing to say, I call and say, ‘Just letting you know there’s nothing new,’ and they love me.” So, we shifted this over with the families. Always call on schedule no matter what. If you got nothing to say, say, “I got nothing to say.” I didn’t realize this applied to the real estate market until I’m at a conference in Australia and there’s a woman running an operation in Australia that’s got a referral rate that is through the roof.
Her referral rate exceeds the referral rate of everybody else in the Australian industry. Nobody’s even close. She gives a presentation and she says, “We call all our clients at scheduled times. They never wonder when they’re going to hear from us. We always call them at the appointed time. If we got nothing to tell them, we call them on a phone and say, ‘Hey, nothing new. No new offers, nobody’s been through the house, nothing’s changed in the market. There’s nothing new,’ and they love us for it,” and I thought, “How more obvious could it be?”, but until somebody pointed it out to me, I didn’t know that was a way to communicate.

David:
So, one of the ways that we work with the clients that we’re serving is, well, I’ll have my agents ask them, “How do you like to be communicated with? Do you prefer phone calls, emails, text messages? If there’s no news, do you want me to tell you there’s no news? Do you only want me to call you if you have to make a decision or do you want to know everything?” I’d say most people say, “No, I want to know everything.” They want the power of deciding if they want to put their feedback or their input in or if they’re just going to let the agent make the decision, but not everyone is the same. In your experience, what are the different kinds of people and what advice do you have about how to communicate with different personality types?

Chris:
Well, there’s also the issue of whether or not they know what the best way to communicate with them is, and until they’ve been communicated with properly, they probably don’t know. It’s what Jobs used to say. He doesn’t design products based on what people want. He designs them based on what they don’t know they want yet. It’s an anticipation. He trusted his gut instinct than his understanding of what people wanted. He didn’t ask. If I don’t know that there’s a better way to communicate with me, then I’m going to reflect on my past history of how it’s happened to me in the past, what I liked, what I didn’t like, and I’m going to give you an answer based on what’s been done with me in the past. I may not know the best way.
The scheduled communication, very few people really understand what a huge difference that makes until they’ve been through it. That first problem is how do they know for sure? Then the other thing, you, as a real estate professional, you’ve got data when you don’t realize you have it. To say, okay, the call would say, “Hey, listen, nothing new.” Well, to point the fact that there’s nothing new is information. It’s telling. You got information about the velocity of the market, the way the market is moving. Has the market changed? Had there been interest rate changes? Have there been any sort of changes in the market that should have had an impact and I didn’t or is having an impact but it’s yet to be seen? The fact that there’s no news doesn’t necessarily mean that there’s no data.

David:
That’s awesome. Honestly, my main frustration with realtors is that. I think there is a bit of a… I don’t know. I feel like my realtors that I’ve worked with, they always feel guilty that they don’t have new news and so they don’t want to text me and get me excited. I may not hear for a day or two. I don’t want to be high maintenance so I’m just like, “Ah, I want to ask but I know what the answer’s going to be,” but I felt like hearing you say that, I’m like, “I actually do appreciate when I get a text from a realtor that’s like, ‘Hey, no news,'” or whatever they could report back with whether it’s no news or good news or bad news, but having a scheduled check in at least doesn’t leave me in the dark quite so long.

Chris:
It’s a tiny little thing, but like I said before, when you’re under stress, if you know when the next touch point is, you can deal with the stress. I’m coaching a family through kidnapping. If I say, “Hey, I’ll call you when there’s good news,” they’re going to go out of their minds. They’re going to lose their minds. If I say, “Hey, you’re going to hear from me in an hour,” even if their family member is under risk of death at the moment, they know I only got to wait an hour. In one hour, I’m going to hear from them or tomorrow at 10. I only have to wait till that moment. Your people’s ability to deal with stress, unless they’re taught, they just don’t know how much of a stressor the unknown is.

David:
Yeah, and you mentioned that earlier in the show. It’s a very, very powerful idea. What causes the client to be upset is they don’t know when the phone call’s going to be coming. It made me think about when I was in the academy, we all got tased and I’m watching grown men, strong men, SWAT officer, the people that were leading you in the academy, these are your heroes literally making unflattering sounds begging for it to stop. What they said is, “If you can say the word stop, we’ll turn it off if it’s too much,” but they hooked us up so one probe was in our shoulder and the other one was in our opposite foot so you’re literally getting your entire body is becoming the circuit other than maybe your neck and above. It’s much worse than if you just got shot with a taser and you get two of them in the chest or something like that.
I’m sitting in there and I’m like, “Look, this is my first job. I’m going to make a good impression. I’m not making a sound and I’m going to take that full five-second ride,” and they hit me with it, and maybe half a second in, I just lost track of time. The pain is so much. My ability to estimate time, I lost it. I didn’t know how long it was going to go for and it was that feeling that was the worst. I was having thoughts go through my head like, “I think the taser broke and they can’t stop it.” They’re behind me hitting it like, “Oh, we’re going to fry them.” It’s not turning off because that five seconds felt so long. If there had been a timer I could have looked at or something, it would’ve absolutely made the experience possible. I could get through this if I can look at that timer, but when you don’t know when it’s going to end, it’s so discouraging.

Chris:
Yeah. 1000%. You captured that 1000% because when you’re in the midst of the stress, you do lose track of time and it’s much harder.

David:
Yeah. If there was a person there like, “Hey, man, hang in there. You got three more seconds. You got two more seconds,” it’s an immediate relief. That’s a powerful thing to think about when you’re in a stressful situation is giving someone sort of the GPS coordinates of where they’re at, where the next break is going to be. That’s one of the things I’ve heard Jocko Willink talk about with advice to get through bud’s training for the Seals, to say focus on your next break. Don’t think about how much pain you’re in. Think about, “In two hours, they have to give us a break because legally they’re obligated to feed us. If I could get through two hours and I could get to that break, I could make it.”
Then after that, it’s done. You’re going to start your next moment of hell and you got to think the same question. “Four hours. They can only do this to me for four hours. I’m going to get a break.” They literally describe that time chunking as a way to get through stressful situations. I wanted to ask you about one of the things that it feels to me like you’re one of the forward leaning thought leaders in this topic of tactical empathy, a way of acknowledging where someone’s at without conceding anything actual of a practical nature. Can you describe what tactical empathy is and how this applies to negotiating?

Chris:
Yeah. Well, let’s break it down into two components. Empathy. Empathy is demonstrating and understanding the other side’s perspective. It’s not sympathy. It’s not agreeing. It’s not compassion. A friend of mine, Steven Color, would say, “Empathy is about the transmission of information. Compassion is the reaction to that transmission.” The first problem is most people in today’s terminology equate empathy to sympathy or agreement. It’s not. It never was. Its origins if you trace etymology of the word, the origin of the word, it was never meant to be agreement. It is meant to be understanding. Now, it’s also a little bit more putting yourself in the other person’s shoes that’s necessary but inadequate. You pull yourself or you seat from their perspective necessary but inadequate. To make it adequate, you got to articulate what you see, what you think they see. Now, what you see but what you think they see. Empathy is the articulation of the other person’s perspective. Not fair. Not accurate. Not inaccurate. You could think I’m a horrible person. I don’t think I’m a horrible person.
An empathic statement would be for me to say, “You feel like I’m a horrible person.” Just stop right there because that’s articulating your perspective, not agreeing, not disagreeing. I’d say, “But I’m a nice guy, but I’m moral, but I have integrity.” The word but were to come across your lips, you’re out of empathy. All right, so tactical. We dropped the word in there, first of all, to disabuse it from being sympathy. Then tactical. What tactics are we employing? Well, the tactics that neuroscience tells us, the way the brain works. Neuroscience tells us that the brain is largely negative, number one. Not sunshine and roses. Survival mode is negative. We wake up in survival mode. Every human being, if left alone, is in survival mode, largely negative. Roughly, as a layman’s estimate that I’m comfortable with, 75% negative. My neuroscience brothers and sisters would say, “Okay, well that’s probably accurate just why you’re saying it is wrong.” Well, I don’t care if I didn’t explain the mechanism properly. It’s still pretty done gone accurate especially for layman’s terms.
Now, what’s the next thing about neuroscience tell us about negativity? Best move is call it out, not deny it, not explain it. Just call it out. That’s why if you think I’m a jerk, my best move for deactivating you thinking I’m a jerk, I could spend hours attempting to charm you. That might or might not work. Eventually, it probably will work. It’s highly inefficient. Or I could say, “Look, you think I’m a jerk,” and shut up. The amount of negativity that it might take me four or five hours of charm to make go away, I could probably make that go away in a space that it took me to make that statement, and I have, in many cases, because if I need you to listen to me, I’m like, “Look, you think I’m selfish. You think I’m a jerk. You think I don’t have any regard for your position at all,” and in your head, you’re going to say, “Wow, this is a straight shooter. I’m interested to hear what they have to say next,” and so that’s where the tactical mark comes from.

David:
Is that because our wiring psychologically is it is so important to us that we are understood that we will just go for hours and hours and hours trying to explain where we’re at until we feel heard and you’re just short cutting this whole process by giving it to them right in the beginning?

Chris:
That is exactly it. That’s a great analogy. People will go on and on and on until they felt they’ve been understood, right? That’s why people go on for hours. It’s exactly right.

Rob:
There’s certain people that I’ll study, I’ll listen to them speak because I like how they articulate themselves. Henry Gracie’s one of them. The guy is just so captivating. He could say the ABCs and I could listen to him for hours saying the ABCs. Ben Shapiro is a person who probably just won’t lose an argument in his entire life. One of the things I notice he’ll do is rather than arguing with someone, if they make a point factually true, he will immediately say, “Yeah, you’re right. The study does show that that’s the case. I agree with you about that,” and it’s so disarming with the other side that’s geared up for this big fight and you immediately just give it to them. They almost don’t know what to do and it elicits this like, “Well, now that you gave me that, the law of reciprocity would dictate I feel like almost compelled to give you something,” and now you’re steering the conversation in a place where tactically it makes more sense. Do I have a decent understanding of what you’re describing here?

Chris:
Yeah, very much. Certain aspects, additional mechanisms, I think, are going on there. Is it reciprocity or is it when a person feels hurt or they’re satisfied and they therefore don’t have to get concessions from you anymore?

David:
I’ve noticed that works very well when I was in the stage of my business where I was the agent negotiating with the other agent. I’m the buyer and I’m negotiating with the listing agent. It is incredibly easy. It’s like a flammable relationship that it goes from we’re getting along to immediately defenses go up. Both sides are incredibly sensitive that the other side is going to rip them off and they’re very defensive over their client and agents blow up more deals than they help because of their egos. They can’t handle it. I notice what you’re saying would work wonders when we would come back and say, “Hey, we need a $25,000 credit because of the stuff in the inspection report.” We don’t really need a $25,000 credit. Okay? I want to get that from my client. They would immediately jump in and say, “No, I’m not going to do it. End of story. We’re not even going to talk,” which usually means they don’t know how to navigate the conversation.
If I said something like, “Well, this is the deal. Take it or leave it,” I’m almost pushing them towards divorce. They’re going to say, “Leave it.” If I would say, “You think we’re over here trying to rip your client off and you don’t want to go back and look like a butthead and say you got out negotiated,” I can understand that. What would need to be different so that you didn’t think I was trying to rip you off, you could tell I was trying to save the deal. It started the conversation where almost every time, they’d come back and say, “Well, it’s not going to cost $25,000 to do it. You’re probably right. We could probably find a person to do it for $18,000, maybe $15,000.” This is about the time that it’s going to take to do it.
The fact they could find another house, it doesn’t need any of this work. That’s why we need to do it. Now, the question does it make more sense for your seller to sell to us three weeks into the escrow or do you think you’re going to get more money if you go put your house back on the market, find another buyer? Interest rates have gone up. It’s a little bit trickier. We’re having a conversation where they’re actually starting to see where we’re coming from and I can actually say things like, “What could we change about this so that it felt like it was better for your client?”, but it never happened if I didn’t start off with exactly what you said. You think I’m trying to rip you off.
Sometimes, they’d Google me and they’d see I’ma big shot and that’d get more defensive. “Oh, this guy thinks he’s going to come push us around,” and I’d say something like, “Hey, man, I actually would rather not put a lot of time into this. I’m trying to get this thing solved as quick as possible. I know it looks like we’re trying to rip you off. What do we need to do here?” Immediately, the whole story would change. Where did you first learn that? Did you have an experience where that moment clicked similar for you like it did for me when I was negotiating with other agents?

Chris:
Well, I think it’s an accumulation and it probably was for you. You see bits and pieces here. You struggle against problems. I first started seeing it when I was volunteering on a suicide hotline and I was seeing how just the act of understanding and articulating the understanding where the other side was coming from was rapidly putting people in different decision making modes. Regardless of what you’re talking about, whether you’re on a suicide hotline, whether you’re on a sales call, whether you’re in a negotiation, it’s about three phases and how quickly can we move through the three phases, which is establish a relationship, boil down a problem, make a decision. On a hotline, we call the last part challenge call it act. In sales, you call it what you call the action. Are they going to buy? Are they going to close? In negotiations, we got ourself to a point where we’re going to make a deal.
It’s three phases. As you struggle through the phases, when you start seeing somebody else accelerate because they eliminated friction. You don’t always accelerate by going faster. Sometimes, you accelerate by eliminating emotional friction. Maybe that’s your tone of voice. Maybe you found you could get to your point quicker. You want to say, “Look, what do we got to do to fix this?” That’s a great question, but somewhere along the line, either you felt like saying, “I’m sure it looks like we’re trying to rip you off. What do we got to do to fix this?”, and bang, they went right into problem solving because you deactivated them with that first piece of empathy. Now, either you saw somebody do that, or just out of desperation, you just decided on your own to just try it one day and you went like, “Holy cow, that worked.” I think we had these moments of insight that come as a result of an accumulation of experience and demonstration in front of us.

David:
I’m curious if you agree with this. I’ve developed a new perspective on the concept of truth mainly after listening to the different news medias that can take the same story and describe it so radically differently that there almost isn’t… No human being knows the truth. They have a perspective of what we call truth.

Chris:
You can’t handle the truth.

David:
Yeah. Well, a lot of the time, that limits our perspective of it because if it hurts us emotionally, we don’t want to see that it literally does. Our heart dictates what our head can see. You take an issue that happens in the world and the news reports on it, and this side shows you this element of it, and this side shows you this element, and we’re arguing because what we’re looking at looks very different from different sides, but the problem isn’t that one side is necessarily lying. It’s that they’re only focusing on the element of the issue that emotionally they agree with, that they can handle.
They don’t want to look at the part that they can’t handle the truth, or in psychology, we call this confirmation bias. This part supports what they believe. This part causes cognitive dissonance. I don’t like how that feels. When that clicked, I was able to say to somebody like, “You’re right. That’s true. That does make sense to me. I can see that,” without conceding that I was wrong because what I’m looking at is just as valid as what you’re looking at but they’re different. Is that a piece that has to play into what you’re describing so that people can use the strategies you’re describing here?

Chris:
Yeah. How does it affect somebody emotionally? How does it affect their identity? How does it affect their perception of gain or loss? What are their comparisons? Especially in real estate, good Lord. Somebody in three-bedroom house determined to get the price of a four-bedroom house because his brother-in-law sold a four-bedroom house for the same amount of money hates his brother-in-law. That’s all kind of crazy stuff out there like that. Yeah. What’s going on in somebody’s head? Most people don’t even know what they’re being held back by, which is the great thing about, as you pointed out before, when you’re articulating somebody else’s point of view, people are held back by principally two things. Stuff that they’re hiding, emotional issues they’re hiding, or emotional issues they become blind to. They’re experiencing an emotion but they’re blind to it. People get clarity of thought when you simply just point this stuff out. You feel like I’m being greedy here and that clarity will help them level out and sees things with less negative bias.

David:
Chris, that was another thing that I’ve recently come to terms with. I’ve wrestled with this for a while and I finally just submitted and tapped out. People’s feelings dictate what their brain thinks. We all see ourselves as logical, rational creatures, but it’s very difficult to get a person to see your point of view if it emotionally hurts or it doesn’t feel good or it creates anger. It’s like our emotions are the rudder of the ship and we think we’re steering it and we’re really not. Was there an element of that in human personality that you came to grips with because you’re dealing with people in a hostage situation?
The tensions are so high. You’re almost having to acknowledge that person’s emotional reality for 99% of the… You’re not going to get them to understand your point of view. You’re not going to go to somebody there and say, “Look, man, I’ve been working for 16 hours. I really need something to eat in the shower. I don’t want to listen to your (beep) right now. Can we just cut to the chase?” That’s not an option when you’re in that scenario, right? Do you agree that you got to start with the heart and the feelings before you can get to the head?

Chris:
1000%. Emotion drives decision. Just that. Our emotions, there’s a TED Talk that I like to quote on a regular basis. Shawn Achor, The Happiness Advantage, I think, is the name of the TED Talk. He says, “You’re 31% smarter in a positive frame of mind.” Harvard psychologist, I’m satisfied that that’s a decent source. What does that mean? It means you’re 31% dumber when you’re in a bad mood. You can’t make good decisions when you’re angry, you’re unhappy because you’re dumber. By definition, if you’re going to buy that stat, you’re 31% smarter in a positive frame of mind, and there’s a fair amount of other separate data out there that supports that that when you’re in a bad mood, you are angry or disappointed or frustrated or concerned, you’re by definition dumber.

Rob:
Yeah, it’s the best simmer down before you make the multi hundred thousand dollars investments probably. Chris, I know David alluded to this earlier with this whole no thing. I know that you’re a believer of starting with no or with a calibrated question. I want to understand why that is. If you’re going into a deal, my thought here is you just want to know how someone reacts, but what is the intention with starting with a calibrated question whenever you’re going into a real estate negotiation?

Chris:
Well, human beings have conditioned themselves since they were old enough to make sentences that when they say the word no, it makes them feel safe and protected. It doesn’t even matter what they’re saying no to. I’ve heard people tell me about their counterparts and they say, “You know what? They’re in no mode. No matter what we say, they say no,” and my answer’s been, “Well, change your questions.” They’re like, “It can’t be that simple.” Unfortunately, it is. If you just go from, “Do you disagree,” to “Do you agree,” people change. Is this a good idea? Is this a bad idea? Are you in favor of it? Are you against? Is it a ridiculous idea? That tiny little change.
There’s something about saying no that makes people feel safe automatically right off the bat. I haven’t seen a scenario yet on earth whether that wasn’t the case. Even the stereotype cultures, the cultures that are stereotyped for they never say no are the Arabs and the Asians, and they’re human beings, and I say to them all the time, “Are you against this proposition?” “No, I’m not against that proposition.” I get them to say no all the time because they’re human beings. Human beings globally feel safer when they say no. The ridiculous answer is change your questions so that you get what you want via no instead of yes.

Rob:
It’s a little bit mind melting right there, honestly. It’s like this reverse like, okay, now I’m going to be like, “All right, every question I ever write, I’m going to write it out and flip the script a little bit,” so that makes sense. Effectively, because they feel safer when you phrase it this way, now it sets the floor to actually start having the conversation towards that shared end goal.

Chris:
Well, if they feel safer, then they feel less anxiety or less concerned because as soon as I start trying to get you to say yes, you start getting concerned about where I’m going with that. Would you like to make more money? That feels like a trap. So many traps have been laid with yes, but then it’s a stimulus response. We’re Pavlov’s dog. We’ve been trapped by yes every time somebody tries to get us to say yes. It’s a trap, so the negative emotions I was talking about before. People feel trapped. They feel like they’re being led into a trap. Concern is a negative emotion. They’re automatically getting dumber. If they say no and they don’t feel trapped, then they’re not going to be getting dumber in the moment. They’re going to be more likely to hear you out. They’re going to be more likely to consider the options. They’re going to be more likely to think of the next steps. It’s the same neuroscience rule. Let me keep you out of negative thought. The chances that we can collaborate effectively are much higher because neither one of us are getting dumber.

David:
For example, Chris, rather than saying, “Would you like to make money?”, it might be safer to say, “Would you like to hear about how I’ll protect you from losing money?” It’s a form of a no or is that still they’re saying, “Yes, I want to hear about it,” and so that would count as not a no?

Chris:
You’re close. What you hit on the second part, which is a really strong one, is loss avoidance. I don’t know the source of the stat, but somebody told me several years ago that 70% of bad decisions are made to avoid loss versus accomplished gains. People are more likely to take a risk to avoid a loss than they are to take a risk to accomplish a gain. The second part of that statement was about loss avoidance which is people want to hear how to protect themselves.

David:
Now, this is particularly important in the beginning of a relationship where there isn’t trust established. This doesn’t mean you have to communicate this way for the entire time you no somebody.

Chris:
No, you don’t. On my team, we use a black swan method with each other all the time and we ask each other, we call that a no oriented question. Is this ridiculous idea? Are you against? We do that stuff all the time, but yeah, occasionally I’ll say if I got that right to somebody on my team because our trust factor is so high that we don’t worry about the yes questions automatically. Now, if somebody calls me on a phone on my team who I trust and asks me a question where the answer is yes right off the bat, immediately I’m going to go, “All right, where’s this going?”

David:
Yeah, you’re trying to get ahead of where they’re at and you’re not… Like you said, the primary emotional condition of a human being is defensive. It’s, “I got to stay alive.” Your brain’s constantly filtering information to describe to you how’s this going to hurt you, how’s this going to kill you, how’s this going to waste your time, how’s this going to take your resources? When you’re trying to figure out where it’s going, it’s not like, “Oh, this is so exciting. What’s Santa going to bring me for Christmas this year?” It’s how is this person going to hurt me? What are they trying to take from me? What are they trying to get me to lull my defenses down?
When you’re talking to somebody and they’re in that state of, “Where’s this going?”, I’ve noticed that they’re always trying to… When you’re trying to lead someone down that path of you’re building a case with logic and they don’t trust you, it feels like they’re dragging their feet at every single turn. What you’re saying is don’t try to drag them along. Go right back to where they’re at. Acknowledge what they’re feeling. Put it out on the table. Let them make sure that that feels heard before you move forward.

Chris:
Yeah, and if you got to move somebody down a path, make sure that you stop and they get the freedom to stop the process whenever they want. When people think the process is out of control and this momentum is just unstoppable, that’s when they really stop listening. There are times we got to share points with the other side doing small doses.

Rob:
This is all incredibly interesting, really. Honestly, hearing it, I feel like both of you all are same wavelength. I’m over here just thinking about all the negotiations on the offers that have gone wrong. I called David two weeks ago and I was like, “All right, man, here’s what they said. They said this and that. What do you think? Should I go?”, and he is like, “No,” and really David’s advice is always very calm like, “This is how you have to approach it. This is probably how they’re feeling. If you can accept that and really lean into that, they’ll be a lot less defensive,” so I actually feel…
Actually, David, I never gave you the follow-up on this because there were tensions. I came in with a lower offer, they weren’t happy about it, and they counted with not my favorite offer either, but then after having our conversation, I was like, “Well, you know what? I can totally see that they were probably offended with my offer. What if we just waited and we did this and this and this?” Then now, we actually are in a completely new negotiation outside of what that original offer was to go into seller financing and trying to lock up completely reset it all.
Honestly, where a lot of it started to accelerate a lot is I stopped wanting to be such buddy-buddy with the realtor because it’s like both parties are scheming with their realtor on how they can combat each other, but I told my realtor like, “Look, I think your mission is to go meet the other realtor where they’re at, chat with them. I want you all to really connect more than us because I feel like that right now the tensions are so high that you all are trying to defend your clients,” and what I really want is, “Hey, we’re buds. How can we make this deal work?” Yeah, now it’s very possible that I’m going to get… I’m hoping. I don’t want to say it too out loud just because I don’t want to jinx it, but I’m hoping to get a 1.8 million property under contract with very little to no money down as a seller finance deal, and it’s all because we rethought how we wanted to approach the negotiation.

Chris:
Nice. Yeah. Good stuff. Give people a chance to work it out with you, right?

David:
Yeah. It’s not natural to think that way. You tend to think it’s just a number. Is it yes or no? Are you accepting my offer or not? But no one makes decisions. If they think that he’s to rip him off, just add a principle, their knee jerk response will be no versus if it’s being received from a different lens. One of the last things I want to ask you, Chris, I wrote a book for BiggerPockets for real estate agents. It’s called Skill. One of the concepts in the book is what I call Triangle Theory. The idea behind it, this is something we teach all of our agents, is I never want to be in conflict with the person I’m talking to whether that’s my own client, it’s the other agent.
When we have a disagreement, let’s say you believe your house is worth 700,000, I believe it’s worth 600,000, I may use superior experienced numbers data to beat you down and get you to agree to list your house at 600, but if I win that battle, I will lose the war because there will be resentment. Our relationship is hurt. You’re looking for any little mistake that you think I make so you can get me right back because I left you with your defense is up. What we teach or what I teach is create a third party or concept or anything that is the actual enemy, align yourself with the person you’re talking with against that enemy. In this case, I would bring a list of homes that have sold in the neighborhood and a list of market data and I’d say, “Look, I agree that your houses worth $700,000. I’d love to sell it for that price, but here’s what the data says. I need you to show me a house on this list that’s $700,000 that takes into effect A, B, or C.”
The stupid market is just turned against us here and it’s screwing us and we got to work together to overcome what’s happened in the market. Now, you’re not mad at me. You’re mad at this concept. I’ll do the same thing when I’m talking to my agent or I’m talking, sorry, a client. I’ll make the agent the person that we’re aligned against. Sometimes, I’ll go to the buyer’s agent when I’m the listing agent and I’ll be like, “Hey, man, I don’t know what to tell you. My seller’s stubborn. He doesn’t want to bend at all. Can you give me something?”, so he feels like he’s not just getting the shaft right now. What if you guys came back and phrase it this way? Then when I go talk to my client, I’m doing the same thing there like, “Yeah, this seller, he doesn’t want to budge at all. We got to figure out some way to get him to understand why your offer is good.” Is there any similarities with the stuff you’re teaching to that concept or is that completely unrelated to the stuff in your books?

Chris:
Well, I like the idea of keeping yourself out of a position of being in conflict with who your partners are. One thing that I’ve always believed is the adversaries, the situation. Anybody that you’re talking to, you guys are both faced with different aspects of the same problem, you try to collaboratively problem solve. The critical thing about that that I love is the emotional intelligence of not being in conflict with the person that you’re talking to

David:
Is there a different tactical approach that you might advise for real estate agents to take that differs from what I call Triangle Theory?

Chris:
Well, I like the idea of keeping it when you talked about the market like, “Here are the listings, here’s the market, here’s the issue.” The market is always going to be, which is the situation, that’s always going to be the issue. Now, I’m depending upon how much you shift around us against them, the us against them stuff is very powerful. I’d have to think about that some more to think through where I was coming from on being flexible and fungible. I can’t think of the proper term in who the adversary is. I like it with the adversary remaining the situation. That makes a lot of sense.

David:
As opposed to the person that you are trying to get on your side. It’s very important that, in Rob’s situation, he needed his realtor to go to the other realtor, form an alliance, and make Rob the problem or the seller the problem so the two of them could have some kind of comradery there. Then when they communicated with their respective clients, it was coming as, “This isn’t the enemy that we have to go take down. This is a problem that we can solve.” This seller thinks this house. I think that in Rob’s situation, the guy wanted around two million and Rob offered 1.4, and the guy came back at 1.8, so the two million guy felt insulted that Rob offered 1.4, Rob felt insulted that he only brought it down to 1.8 when the house has been on the market for six months or something. It’s not worth that much money. They’re both viewing that scenario from like, “Screw this guy.”
They basically needed to just get out of that frame of mind. Like you’re saying, Rob, you reset it so now you’re going forward. I would just encourage everybody who’s in the real estate space to maybe get honest with themselves that your emotions play a very big role in the decisions you make. I thought, Chris, that was fantastic statistic that you are 31% dumber when you’re in a bad mood and it makes sense because if you’re holding your cards to your chest and you’re all tight and you’re like, “No one’s going to take what I have,” you were in law enforcement, you know what it’s like. When there’s a threat, you get tunnel vision. You can’t see anything but that threat. You don’t know what’s happening outside. There could be very easy…
How many times did you see people in a foot pursuit running all over the place and then the suspect would make a big circle and come and get in their car, take off, drive as the most humiliating thing that ever happened? When you’re on the outside looking in, you’re like, “Oh, that’s exactly what’s going to happen.” If you get super afraid, what we say is zoom out. When you zoom in on what’s concerning you, you get dumb. You can’t see the big picture. You got to zoom out to be able to see the whole thing. Is there any last pieces of advice you can give before we let you get out of here for people that want to become better negotiators, want to experience tactical empathy, they want to start this journey of understanding is how to be better communicators where they can start?

Chris:
The first impression is the second most important impression. The last impression is the most important impression. Interactions, particularly, is something that’s at stake when there’s conflict. The last impression people usually leave are cheap shots. I would remind you, you can’t sell this house, you can leave it on the market. The last impression is the lasting impression. You really put a lot of great encouragement for further conversations to make sure they end all your interactions positively, and whatever you said to try to open a conversation positively probably bears repeating at the end just to make sure that the lasting impression is a positive one.

David:
Your new book, can you tell us what it’s called, where people can find it, and where they can find out more about you?

Chris:
The new book is the Full Fee Agent. The number of real estate agents that don’t get full feed just because they don’t ask. How do you ask? How do you set that out from the very beginning? How do you stick to it in a way that gains a client’s trust? Literally, we’ve had agents that have adopted this whole methodology work half as much and make the same amount of money because what a lot of it is in being a full fee agent is not wasting your time on long drawn out deals that you don’t make any money on because if you’re a full fee agent, you have a tendency to close and you have a tendency to repeat with clients.
It’s going to be up on Amazon. As of right now, November the 15th is the target release date. Best way to know for sure on how to get ahold of it is to subscribe to the Black Swan Newsletter because we’ll be putting the announcement out in the coming weeks. Go to the website, blackswanltd.com, upper right hand side of the homepage, click for the newsletter/blog, look through our articles, and also sign up for the weekly announcement. New article on negotiation comes out every Tuesday morning. Information about how to buy the book will be coming out in the newsletter as well, blackswanltd.com.

David:
Is that website the best way for people to follow or get in touch with you?

Chris:
It is. Yeah. B-L-A-C-K-S-W-A-N ltd.com.

David:
What’s LTD stand for?

Chris:
Limited. It’s a legal term.

David:
Nice. Great. Okay, I like that. Rob, any last questions before we let Chris get out of here and get back to his conference in Montreal?

Rob:
No. I just have one last question, or request rather, for the audience. If you’ve enjoyed today’s episode and you like hearing from us and you want our content to get pushed up in the podcast algorithms, then I ask that you leave us a review on the Apple Podcast website or whatever podcast streaming platform that you use.

David:
Chris, I want to thank you personally. Really appreciate you being here. I know this is probably not your first option of how to spend your time while you’re on the road traveling. I know we also had to reschedule because I was out of town so I want to personally thank you for being flexible with that and given our audience a lot of your time, your attention, and your wisdom when it came at an inconvenient moment for you so thank you. You’re a class act. Any last words before we let you get out of here?

Chris:
No. Thanks for having me on. I thoroughly enjoyed the conversation.

David:
All right. Thanks a lot, Chris. This is David Greene for Rob, just listening and wonder, Abasolo, signing off.