Reluctant Buyer: The Power of “No”

I stood up and said, “Sounds like this is not going to be a good fit. Thanks for inviting me over,” and I headed for the door. I got about half way across the room when Andy said, “Wait! Come back and let’s see if we can work this out.” Twenty minutes later I walked out of the house with a contract.

The negotiation was going well, but I was not getting one item I needed to make the deal work for me. We were close, but I was not playing darts. In this case, close was not good enough. There was one sticking point that I could not bend on, and Andy did not want to bend either. If a deal was to happen, someone had to give. I was in a position of strength, meaning he needed to sell more than I needed to buy. For that reason, I was both confident I would get the deal and ok if I didn’t. I was the one willing to say no and risk the deal by getting up to leave.

This strategy has worked for me over and over. In any negotiation, you really want to have the ability and strength to say no. It is easy to do if you are not emotionally attached. The side that can and does say no first, wins.

I love to tell this story. Steph and I negotiated a Lease Option with the owner of a house early on in our investing careers. This person was extremely motivated because he rented the house to his father and his father stopped paying rent. He did not want to evict his father, but it was creating some financial pressure having him there. We agreed to evict the father. After leaving the house with the deal, we started our diligence and realized that the house was not worth what we thought and no longer felt comfortable with the deal. Within two days we notified the seller that we were cancelling our agreement. He was in a complete panic and called us begging us to take his house. He was willing to give it away.

It sounds easy to leave your emotions out of a negotiation, but that is not reality. It can be especially difficult when you are just getting started or you have not done a deal in a while. The best way to overcome these emotions is to be looking at a lot of houses and making a lot of offers. If one does not work out it, is no big deal.