Question about Negotiating Deals

Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes

I have been negotiating with a seller, he wants a day to think about the deal. Do I wait longer since he needed time? My offer was 5k less than his asking, he wanted to meet in the middle; Increased my offer by 1500 and he went to shake my hand and then said no he needs to think for a day but would most likely accept (his words) is this a good sign? The house has been listed for awhile but there is an emotional attachment. Any thoughts or comments are welcome.

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Aaron Mazzrillo

Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes

10y

So you've increased your offer by $15,000 and he dropped his asking price by $2,500? You have a lot more to learn about negotiation than worrying if you should wait a day to contact the seller or not.

When you make that big of a move, the other side knows you probably can move some more. You can't go $15,000, then $1,500. He is out-negotiating you and you are on the verge of appearing needy. What you should have done was made your initial offer and when he countered you, you then say that you always put your best offer first because you don't like to play games and get into a bidding war. Then, if you have room, up your offer by just a little just as he has reduced his. In reality, you have much less room than he does. If the property is free and clear, he can go all the way down to zero. You on the other hand have expenses and margins to deal with.

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Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
So don't worry about making money on the deal?! If I give him the asking I will have very little profit. His initial asking was just shy of 20k higher than my offer. My question is do I contact him now or wait?
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Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
Originally posted by @Account Closed:

@Brandy Johnson Give the seller the asking price and close the deal and leave out the weasel clause.
what is "weasel" clause?
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Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
Originally posted by @Account Closed:

@Brandy Johnson It is an escape route if you decide you don't want to buy.
Ohhh ok, thanks
1 Reply
Aaron Mazzrillo
Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
10y
So you've increased your offer by $15,000 and he dropped his asking price by $2,500? You have a lot more to learn about negotiation than worrying if you should wait a day to contact the seller or not.
When you make that big of a move, the other side knows you probably can move some more. You can't go $15,000, then $1,500. He is out-negotiating you and you are on the verge of appearing needy. What you should have done was made your initial offer and when he countered you, you then say that you always put your best offer first because you don't like to play games and get into a bidding war. Then, if you have room, up your offer by just a little just as he has reduced his. In reality, you have much less room than he does. If the property is free and clear, he can go all the way down to zero. You on the other hand have expenses and margins to deal with.
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Adrienne Bryson
Flipper/Rehabber · High Point, NC · Member since 2016 · 276 posts · 183 votes
10y
You let this deal get away from you. He's manipulating you with a common, almost cliche, tactic. He's going to push for a higher price so be ready. Give him his time, if you chase him he will feel like he has all the value and therefore all the power.
Keep in mind you are also bringing value to the table. Why is he selling in the first place? Use that. Obviously if there's an emotional attachment there must be an equally strong or stronger motivation for him to even consider selling.
When he pushes again, remind him that you're trying to work towards a common goal and that in order to achieve that goal and help him, you can't give him any more on the price.
Dealing with sellers you have to be strong saleswoman and a strong negotiator.
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Darren Budahn
Investor · Milwaukee, WI · Member since 2014 · 811 posts · 420 votes
10y
Can I give a thumbs down to john Andersons contributions to this thread
4 Reply
Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
Originally posted by @Aaron Mazzrillo:

So you've increased your offer by $15,000 and he dropped his asking price by $2,500? You have a lot more to learn about negotiation than worrying if you should wait a day to contact the seller or not.
When you make that big of a move, the other side knows you probably can move some more. You can't go $15,000, then $1,500. He is out-negotiating you and you are on the verge of appearing needy. What you should have done was made your initial offer and when he countered you, you then say that you always put your best offer first because you don't like to play games and get into a bidding war. Then, if you have room, up your offer by just a little just as he has reduced his. In reality, you have much less room than he does. If the property is free and clear, he can go all the way down to zero. You on the other hand have expenses and margins to deal with.
No i increased my initial offer by 1500. He wanted to meet in the middle after my initial offer which was almost 20k lower than his asking. I'm not sure where your numbers are coming from.
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Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
Originally posted by @Adrienne Bryson:

You let this deal get away from you. He's manipulating you with a common, almost cliche, tactic. He's going to push for a higher price so be ready. Give him his time, if you chase him he will feel like he has all the value and therefore all the power.
Keep in mind you are also bringing value to the table. Why is he selling in the first place? Use that. Obviously if there's an emotional attachment there must be an equally strong or stronger motivation for him to even consider selling.
When he pushes again, remind him that you're trying to work towards a common goal and that in order to achieve that goal and help him, you can't give him any more on the price.
Dealing with sellers you have to be strong saleswoman and a strong negotiator.
Over the phone before I viewed the home, I got him to decrease his asking by 12k. Then after i saw the home and the work needed i offered him 15k lower than that amount he reduced it too over the phone. He wanted to meet in the middle so i increased my offer by 1500 to close the deal. I may not be articulating this right. I'm not sure if your comments are based on the same numbers, we seem to be discussing 2 different situations lol
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Adrienne Bryson
Flipper/Rehabber · High Point, NC · Member since 2016 · 276 posts · 183 votes
10y
The exact numbers weren't quite clear originally @Brandy Johnson. So it wasn't as bad as I thought at first, my bad!
However, the rest of my comment remains. He is most likely trying to "make you sweat" so he can push for a higher price. Use his motivation and the approach of joint problem solving to keep him on track.
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Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
Originally posted by @Adrienne Bryson:

The exact numbers weren't quite clear originally @Brandy Johnson. So it wasn't as bad as I thought at first, my bad!
However, the rest of my comment remains. He is most likely trying to "make you sweat" so he can push for a higher price. Use his motivation and the approach of joint problem solving to keep him on track.
Ok thanks Adrienne. My initial thoughts was to make him wait. He is selling to move to a different part of town. The home belonged to his great aunt who left to his dad. But his dad has passed and he is very attached to the house. It's also been listed for a few months way too high.
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Adrienne Bryson
Flipper/Rehabber · High Point, NC · Member since 2016 · 276 posts · 183 votes
10y
Hmm... It's possible he's not 100% committed to selling. He "wants" to sell but from that information alone sounds like he doesn't "need" to sell. Those deals are harder to work.
Just keep plugging along! He'll let you know if he is willing to deal, otherwise...on to the next!
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Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
Originally posted by @Adrienne Bryson:

Hmm... It's possible he's not 100% committed to selling. He "wants" to sell but from that information alone sounds like he doesn't "need" to sell. Those deals are harder to work.
Just keep plugging along! He'll let you know if he is willing to deal, otherwise...on to the next!
Exactly, thanks for the suggestion. His wife was pushing him to make the deal so I'm sure she will have him calling me soon enough lol
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Aaron Mazzrillo
Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
10y
Originally posted by @Brandy Johnson:

Originally posted by @Aaron Mazzrillo:
So you've increased your offer by $15,000 and he dropped his asking price by $2,500? You have a lot more to learn about negotiation than worrying if you should wait a day to contact the seller or not.
When you make that big of a move, the other side knows you probably can move some more. You can't go $15,000, then $1,500. He is out-negotiating you and you are on the verge of appearing needy. What you should have done was made your initial offer and when he countered you, you then say that you always put your best offer first because you don't like to play games and get into a bidding war. Then, if you have room, up your offer by just a little just as he has reduced his. In reality, you have much less room than he does. If the property is free and clear, he can go all the way down to zero. You on the other hand have expenses and margins to deal with.
No i increased my initial offer by 1500. He wanted to meet in the middle after my initial offer which was almost 20k lower than his asking. I'm not sure where your numbers are coming from.
My error. I misread your post. Thanks for clarifying.
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Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
Originally posted by @Aaron Mazzrillo:

Originally posted by @Brandy Johnson:
Originally posted by @Aaron Mazzrillo:

So you've increased your offer by $15,000 and he dropped his asking price by $2,500? You have a lot more to learn about negotiation than worrying if you should wait a day to contact the seller or not.
When you make that big of a move, the other side knows you probably can move some more. You can't go $15,000, then $1,500. He is out-negotiating you and you are on the verge of appearing needy. What you should have done was made your initial offer and when he countered you, you then say that you always put your best offer first because you don't like to play games and get into a bidding war. Then, if you have room, up your offer by just a little just as he has reduced his. In reality, you have much less room than he does. If the property is free and clear, he can go all the way down to zero. You on the other hand have expenses and margins to deal with.
No i increased my initial offer by 1500. He wanted to meet in the middle after my initial offer which was almost 20k lower than his asking. I'm not sure where your numbers are coming from.
My error. I misread your post. Thanks for clarifying.
No problem, Aaron. Thanks for your comments.
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Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
Just wanted to post an update. The seller contacted me today and accepted my offer. I am meeting him again on Thursday to sign my contract.
2 Reply
Brandon Shewbridge
Virginia Beach, VA · Member since 2016 · 44 posts · 20 votes
10y
Can you call him now or should you wait was the question right?
So many investors forget that they are actually selling too when acquiring. You are pitching to the seller that he should part with his house for your money. You are selling them on why they should give it to you at a less than market rate. If investors were just buying, they would be paying what the sellers are asking without any negotiating.
Given that, you just learned your first sales 101 lesson. Never leave the current appointment without setting the next one. In some cases you should set it for them and instead of asking what time, suggest two times and let them pick.
Given the information that you have provided regarding his attachment, I would have handled it by saying something like this: ”Mr. Seller, I know this house is important to you and I want you to make sure you are ready to sell it. I do have other properties that I am considering in addition to this one. I don't want to give your money to someone else without giving you a little bit of time to consider it. My final offer will stand for 24 hours and I'll call you at this time tomorrow for your answer."
First you would have established better rapport and more credibility by sympathising with his attachment to the house. It also would have put him temporarily at ease assuring him that you want to make sure he's ready to sell. It helps take the pressure off. Second, you're letting him know that the money is his, but that you could take it away if he doesn't accept your offer. It's just a gentle reminder of the potential negative consequences. Last you are effectively setting the next appointment. By setting the time of the call you've given him a deadline about when the decision needs to be made, and you've given yourself the time that you will have your answer.
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Adrienne Bryson
Flipper/Rehabber · High Point, NC · Member since 2016 · 276 posts · 183 votes
10y
Congrats @Brandy Johnson
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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
10y
If you are $5k apart and can't meet in the middle because you are concerned you can't make enough on the deal...then your margin is not high enough here. $2500 is not an amount to worry about unless it's a property you shouldn't buy.
[email protected]301-893-4635 Podcast Guest on Show #192
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Thoai Han
Real Estate Agent And Investor · Philadelphia, PA · Member since 2016 · 46 posts · 7 votes
10y
@Brandon Shewbridge great advice.
@Brandy Johnson congrats on the deal! With technology nowadays, is there a reason you don't want to email him the contract and he return it to you signed and dated?
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Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
Originally posted by @Brandon Shewbridge:

Can you call him now or should you wait was the question right?
So many investors forget that they are actually selling too when acquiring. You are pitching to the seller that he should part with his house for your money. You are selling them on why they should give it to you at a less than market rate. If investors were just buying, they would be paying what the sellers are asking without any negotiating.
Given that, you just learned your first sales 101 lesson. Never leave the current appointment without setting the next one. In some cases you should set it for them and instead of asking what time, suggest two times and let them pick.
Given the information that you have provided regarding his attachment, I would have handled it by saying something like this: ”Mr. Seller, I know this house is important to you and I want you to make sure you are ready to sell it. I do have other properties that I am considering in addition to this one. I don't want to give your money to someone else without giving you a little bit of time to consider it. My final offer will stand for 24 hours and I'll call you at this time tomorrow for your answer."
First you would have established better rapport and more credibility by sympathising with his attachment to the house. It also would have put him temporarily at ease assuring him that you want to make sure he's ready to sell. It helps take the pressure off. Second, you're letting him know that the money is his, but that you could take it away if he doesn't accept your offer. It's just a gentle reminder of the potential negative consequences. Last you are effectively setting the next appointment. By setting the time of the call you've given him a deadline about when the decision needs to be made, and you've given yourself the time that you will have your answer.
Thanks for the info! I will know better for the next deal :)
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Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
Originally posted by @Thoai Han:

@Brandon Shewbridge great advice.
@Brandy Johnson congrats on the deal! With technology nowadays, is there a reason you don't want to email him the contract and he return it to you signed and dated?
Thank you! Because I am completely green and didn't even consider that option lol. I will do better but I am learning
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Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
Originally posted by @Russell Brazil:

If you are $5k apart and can't meet in the middle because you are concerned you can't make enough on the deal...then your margin is not high enough here. $2500 is not an amount to worry about unless it's a property you shouldn't buy.
My response was in reference to the comment to just give him the asking. I could meet in the middle, it was $1000 higher than my MAO but I was hesitant to do it being inexperienced in REI. I appreciate all the comments here.
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Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
Originally posted by @Adrienne Bryson:

Congrats @Brandy Johnson
Thank you, Adrienne!
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Steven Velasquez
Real Estate Agent · Jamesburg, NJ · Member since 2015 · 30 posts · 7 votes
10y
@Brandy Johnson - Way to go Brandy! You've received some sage wisdom from the people in this thread. May I recommend a simply fantastic book on negotiation? I have listened to it three times and it won't be the last time either. "Gambits" they call them. Knowing which gambit to apply in the different situations will help you in your bright future.

http://www.audible.com/pd/Business/Weekend-Millionaire-Secrets-to-Negotiating-Real-Estate-Audiobook/B0182L1VHO
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Brandy Johnson
OP
Real Estate Consultant · Greensboro, NC · Member since 2016 · 50 posts · 10 votes
10y
Originally posted by @Steven Velasquez:

@Brandy Johnson - Way to go Brandy! You've received some sage wisdom from the people in this thread. May I recommend a simply fantastic book on negotiation? I have listened to it three times and it won't be the last time either. "Gambits" they call them. Knowing which gambit to apply in the different situations will help you in your bright future.

http://www.audible.com/pd/Business/Weekend-Millionaire-Secrets-to-Negotiating-Real-Estate-Audiobook/B0182L1VHO
Awesome! Thank you, Steven. I will take all the help I can get
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