The word YES is so simple. And sometimes it’s so easily obtained. Yet, as a real estate investor it sometimes feels like you’re in a never ending pursuit of the word.
Just in the past week we worked hard to get this simple little three letter word from:
- The seller of a home who agreed to sell us their beautiful home for a price under market in exchange for a flexible closing date while they wait for their new home to be built,
- Prospective tenants,
- Private lenders as we seek to find people with money to lend to us in exchange for a secured return on their investment,
- Potential joint venture partners as we look for a couple of new partners on two deals we have closing in the next 60 days,
- Even the home sellers we have firm deals in place with as we ask for access to their homes before closing to get estimates from contractors and to show to interested tenants.
It really does feel like we’re in an endless pursuit of the elusive word: YES.
And not everyone says yes. One of our long time friends gave us a really rather firm no when we invited him to invest in one of our latest deals. It stung for a second because it was more firm than we thought it needed to be but we were also happy he didn’t waste any time telling us where he stood.
Most of the time we are able to get to yes. And as we get better and better at obtaining the magical word we’ve realized there are a few little secrets that work wonders. They are as simple as the word itself.
SECRET #1: Nobody wants to admit they follow the herd but inside every one of us there is a sheep that is really concerned with what the herd is doing.
Even more significant than our inner sheeps desire to do what the herd is doing is how much more likely we are to be influenced by those sheep if we perceive them to be just like us. In other words, if you’re talking to a doctor about becoming a joint venture partner the best thing you can do is tell that doctor about the fantastic returns you earned for another doctor you’ve partnered with. Or, even better, show them a testimonial from that doctor.
SECRET #2: The effectiveness of fear cannot be understated, but use fear with caution. In many cases we try to focus on the positive reasons to take action. But, until you show someone why they should be afraid of not taking the action we desire AND give them a clear explanation of why the action will alleviate that threat a lot of people won’t take a step forward.
And the fear of loss is incredibly powerful. It’s why we have open houses for tenant showings. When there are a lot of people walking around the house asking questions at the same time it’s easier to get applications from people. Even if they aren’t sure if the home is right for them, the fear of missing out on the home is enough to inspire them to submit an application to rent the home.
SECRET #3: Label someone with the characteristics that you want them to have. It’s kind of like when I suggested we be careful when using the words successful and failure. The same goes for when you’re speaking with someone about the action you want them to take.
For example, when we speak with joint venture partners we try not to focus on telling them about how risky the stock market is for the majority of investors to motivate them to invest in real estate. Instead, we try to find something they have done that demonstrates how smart they have been with their money. Then we acknowledge that smart move, and we try to align their smart moves with how investing in our next deal is a smart move. When you assign a trait to a person and then try to persuade them to do something that they see as consistent with that trait you’ve already assigned to them, then it will be easier to persuade them to say yes.
Of course, this has to be genuine or it will never work!!
SECRET #4: Less is more. We’ve been learning this one the hard way as we currently have three properties available in our rent to own program in one market. In the past we’ve only ever had one at a time. And in the past we’ve found it’s easier to fill the properties. What we’ve come to realize is that previously we were able to honestly and simply point out that “yeah this property doesn’t meet every single criteria on your list but it’s the only one we have available right now“.
Right now, we have three available and a fourth coming up. And we’ve let it be known that they are all available. As a result, we haven’t yet found a single tenant buyer. Everyone always asks about the other properties and never commits to the one they are looking at. As long as they know we add one or two to our portfolio every month people seem content to wait for the right one for them even if that never comes. It comes back to the fear of loss as well.
As long as someone has choices they feel like they have options other then yes or no. As soon as you limit the choices and force a YES or NO answer the fear of loss kicks in and it’s easier to get a yes out of them. If they feel like they can delay their response because they have other options and the options aren’t in short supply, the delay is inevitable.
SECRET #5: The power of WHY is crucial. If you haven’t read the book Influence by Robert B. Cialdini then you should add that to your reading list right now. One of the big lessons I learned from that book was to always follow up any request with a reason why you are making that request.
In his studies, even if the reason given was nonsensical people responded favourably to the request by a large margin, over when no reason at all was given. In his example, someone asking to bud in line at a copy machine asks to go ahead of them and simply adding “because I need to make some copies” to the request resulted in a large increase in positive responses over simply asking to make copies. The same goes for any request you make of a lender, partner, buyer, seller or tenant. Give them a reason for your request, even if it’s not the best reason in the world, and you’ll find a big increase in the yes answers you get.
The pursuit of the elusive yes is a lifetime adventure for real estate investors. I believe that even master negotiators will always be learning to tweak and tailor their presentations to make it a little easier and a little faster to get to yes. And I think these five little tools will go a long way in every negotiators tool kit. What tricks do you use for persuasion powers?
Photo © Julie Broad