How to Make $30,000 in 30 Seconds

Two Super Simple Negotiation Strategies

Aside from marketing, there is no better paying skill in business. This is any business, including real estate. Your two highest paying roles will be to bring in the leads and close on deals. But before you can close a lead you need to negotiate a profitable deal. The strategies that I talk about in this article work when you are meeting with sellers directly, so this is not relevant when negotiating deals through the MLS.

After my first two successful deals, which I actually did a terrible job negotiating, I went to a 3 day real state investing boot camp. Part of this boot camp was taking us through a system to talk to sellers. There is a very specific 5 step process. During this boot camp we were forced into groups of 4 to go out on an actual seller appointment. Because I had already done a deal I was "elected" to lead the negotiation. I was happy to do it. After all, I was there to learn and what better way than to practice in front of fellow students who were willing to critique me? This made it an opportunity I was not going to pass on. With that said, I was scared to death. I was nervous and did not know what tools to use. I could hear the nerves in my own voice as I opened up the conversation. The only thing I could think about was the 5 step process. I made it through the meeting and was VERY close to buying that house because I followed a system. I was proud and knew at that moment that I could get good at negotiating and just needed to practice. Over the years I have negotiated hundreds of deals, and learned some very specific strategies that have worked well for me.

Here are two tips that I use with the exact words I say with motivated sellers. To give you a point of reference, I will typically try to make a negotiation drag on as long as possible. If I am in and out of the house in less than an hour, I typically don't end up with the deal. The longer you are in their home, the more commitment they feel to working with you. Also, these two tips are only used after you have brought out as much emotion from them as possible. You are probably in their home because they are motivated to sell, and it is your job the help them feel that motivation long before you ever talk about numbers. The two simple tips are to bring them into reality and create a gap that needs to be closed.

Me: "So how much are you asking for the home again?"

Seller: "$200,000"

Me: "Ok good. And what did you realistically expect to get?" (By saying it this way you are indicating to them they are not being realistic, without offending them.)

Seller: "Well I was really hoping for the full $200,000"

Me: "I understand that you are hoping to get $200,000. What did you realistically expect to get?"

Seller: "Well maybe I would take $190,000 just to be done with it"

Me: "OK. So your realistic top number is $140,000 to $190,000."

Seller: "No I actually said $190,000"

Me: "OK. So your top number is $160,000 to $190,000. We can come back to that."

Each time I create a gap I will nod my head up and down indicating that it is acceptable to accept the numbers I am suggesting. From here, I would typically go back to talk about their motivation for selling. I want them to remind me why they need to sell their house fast. I might also spend a little time talking about the condition of the home and what I would need to do to get it ready to sell on the open market. At this point, I could also reiterate that I am investor and can close fast, but need a discount for it to work for me. I really want that gap of $30,000 to settle in before I come back to it.

As we work together to close that gap, we are creating a starting point to negotiate from. Getting a low purchase price is a process and this is just one step in that process. These two strategies have been extremely effective for me and is something I use right when the conversation switches to the numbers. It is a great way to knock $30,000 or more off their starting point.