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What is the secret to mastering real estate negotiation?\u00a0Let me give you an insider tip right now: It doesn’t have anything to do with low balling the seller, trying to haggle\/beat them down on price\u00a0or anything that might immediately come to your head when you hear the word “negotiate.” Instead, I take a different approach that lets me buy houses at a discount and gets the seller excited to work with me.<\/p>\n
Preparation for the appointment happens before you step foot in the property. It happens as soon as the lead comes in. You should have some sort of system that documents all the relevant information. While you are on the phone with them, you need to discover what the seller\u2019s situation is for selling at a discount, how motivated are they, whether they\u00a0converted the garage into a living space, whether they\u00a0did\u00a0any partial rehab themselves, etc. Not only that, but speak in a way<\/a>\u00a0that makes them want to visit with you specifically to solve their problem. Think of every little factoid as another round of ammunition on your belt to help you secure the deal. If you want to be a professional, you need to come prepared. Related:<\/strong> The Top 5 Ways to Negotiate Major Discounts On Your Next Property<\/a><\/em><\/p>\n After the phone call and the appointment is booked, there is still more to do. Start by running your comps on the property. Now, I don\u2019t try to sit there and be a “desktop appraiser” (even big banks have tried to do this and failed). I pull more<\/em> comps than I need and bring them to the field with me. Then, once I am in the field, I physically drive each comp and make mental notes as to how the comp compares to the subject property. From there, I try to narrow it down to the 3 most relevant comparables. Besides, if you are a new investor or new to the area, there is nothing more important than driving the comps. It will help you:<\/p>\n In addition to that, I would recommend printing off whatever records there are for the subject property on your local central appraisal district’s website. Beyond that, I keep a stack of folders in my car just in case I need them. You never know when you will need to pull one out and write a contract on the spot on the hood of your car that you weren\u2019t expecting. It has happened to me more than once!<\/p>\n When you are about to pull up to the subject property, I recommend parking on the side of the road or a few houses down from the house. The reasoning is simple \u2013 if you pull into their driveway, it can feel like you are trapping them in on a subconscious level. So just put in the extra effort to walk a few more feet. Once I am inside the property with the seller, most of my discussion is about anything other than the house.<\/p>\n I talk about sports (if I see a Dallas Cowboys bumper sticker on their car) or hobbies that they might have. Just pay attention inside the house. Look out for pictures, items or doo-dads that may give you any indication as to similar interests you may share. For example, I love to go fishing and if I ever see an outdoor channel on their TV, an animal trophy hanging over the mantle, or a picture of someone holding up the “big one,” I know we have a lot in common. Even if you can\u2019t find anything on a personal level to connect with the seller, just be yourself and be nice and courteous; after all, it\u2019s their house. Many times older people will say I remind them of their own kids or grandson, and that\u2019s when I know I have built a relationship with the seller, and it gives\u00a0me a much higher likelihood of getting\u00a0the contract, even if my price isn\u2019t the best.<\/p>\n But getting back to the title of this section, you don\u2019t want to go around and beat up their house. Don\u2019t go around pointing out the hole in their drywall or how they messed up the partial rehab they attempted to do themselves. Don\u2019t beat them up on the price and argue with them. Instead, always try to educate them and build a personal relationship<\/a>. In one of my previous blog posts, I discussed some excellent tips on how to educate the seller \u2013 one of the biggest tips to take away from that is how I break up the prices and use that as information to present to the seller.<\/p>\n<\/a><\/p>\n\n
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<\/a><\/p>\nDon’t Be a Know-It-All<\/h3>\n
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