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James Trautz
  • Real Estate Agent
  • Kissimmee, FL
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5 Successful Steps In Negotiating a Deal

James Trautz
  • Real Estate Agent
  • Kissimmee, FL
Posted Nov 20 2015, 14:35

Negotiations are nothing more than creating a win-win situation to create a desired outcome. Given my background, I’ve negotiated literally hundreds of contracts and deals by following 5 basic steps. I’d like to share them with you. These steps are simple and foster a desired outcome for both me and my clients. Here they are:

  1. Identifying YOUR goals
  2. Identifying the client’s problem (s)
  3. Providing solutions
  4. Handling Objections
  5. Asking for the Close

In the investing world, "Identifying your goals" typically transfers into profit margin. But to get there, you need to know your numbers – The ARV, repairs, taxes, holding costs, entry and exit strategy, etc. Being confident in the numbers and recognizing YOUR strategy allows you to be disciplined in determining how far you're willing to go in the purchase or sale of a property, realizing of course, that sometimes the best deal is the deal that's never done. Being disciplined equates to sound business decisions.

Identifying the client’s problem(s) is nothing more than recognizing HIS motivation. Does he have back taxes that can’t be paid? Is he relocating? Is he approaching foreclosure? Is he going through a divorce and needs to settle FAST? Regardless of the reason, once you know his motivation, you’ll begin to understand HIS mindset, understand what he’s willing and not willing to do and begin to create solutions that meet HIS needs. Knowing the client’s motivation is the key to everything else in the deal.

I never try to "sell" a client on anything – EVER. What I do is to present solutions to overcome his problem(s). Of course, I know up front from "pre-qualifying" him over the phone earlier what the solution is, but rather than me telling him the solution, I allow HIM to choose it himself. For example, I recently had a client who had some equity in his home, but not enough to cover the repairs needed to sell it or the closing costs required to close (commission, transfer stamps, etc.) without taking money out of his pocket. To make matters worse, he had put down money to build a new home BEFORE actually selling the one he was in (boneheaded – but hey, he's the client). Anyhow, the solutions I provided were two-fold: First as a Realtor (I ALWAYS disclose that I'm also a Realtor), I broke down the numbers for him as to how much it would cost him. Obviously, that wasn't going to work (I knew beforehand that it wouldn't), so I offered him a couple of other solutions as an investor. In the end, the only solution that worked for him was to allow me (more specifically – my JV partners) to purchase his home for what he owed on it. The important thing to keep in mind is that HE was the one who came to this conclusion – I simply provided the options.

Assuming you understand the client’s motivation and you provide him the solutions required for HIM to overcome his problems, objection handing is nothing more than an exercise is restating the obvious: He’s got a problem; you’ve got the solution, and now he has to make a decision. He’s either onboard with the solution(s) you’ve provided or he’s not. Time to decide.

The last step seems to be the most difficult for so many people. We do all the work, present all the options, answer all the questions – then, for some reason, we’re afraid to ask for the close. In my business, I’m very transparent. I tell my clients that I’m in business to make money, but that the goal is to create a situation that works for both of us. I reiterate the problem they have, as well as the solution I’ve created for them and tell them how much I’m willing to pay to get them out of the jam that they are in. At this point, it’s very “matter of fact.” I ask for the close, but I NEVER BEG. I remind them that there is no pressure on my part – If they accept my offer, then their problem is solved. If not, then I’ll simply move on to one of the other 10 million people here in Chicago.

My experience has shown that if you create win-win situation for all parties involved and you’re transparent in what you’re doing, more often than not, you’ll have a deal. If you don’t, they probably aren’t motivated as you thought. Either way, I’m here to provide a service. If nothing else, my clients understand that they’re dealing with a professional.  

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