To get great deals on property and
buy them without using your own money, you’re wise to learn how to
negotiate well. Often you can negotiate a no-money-down deal if you
are willing to learn how and apply it to many transactions.
You can actually negotiate in all areas of a real estate transaction: price,
terms, closing time, earnest money, contingencies, conditions.
Negotiate for all of it. Most real estate investors and Realtors negotiate
only on price. Learn to negotiate in many areas, using price as the
Rule 1: Negotiate only with the decision maker.
Go out in the next 24 hours and negotiate for something. Remember, only
negotiate with the decision maker. When you’re at a restaurant, for example,
ask for the manager and build rapport by chatting and start a dialogue
“How long have you been working here?”
“I’ve been working here two years,” the manager says.
“What a great restaurant; Cindy the waitress is awesome. It’s our first
time here. We’re just wondering, do you sometimes do special things to get
people to come back?”
“Yes, we do. There’s a little discount or sometimes dessert. Do you want
“We’ll take some dessert.”
“I’ll bring a piece of cheesecake.”
“Well, since there are two of us, can you do any better?”
You might think this is funny and crazy, but if you go out and start practicing,
you’ll get better at asking. When you buy a car, you negotiate with
the salesperson, who rarely can do any negotiating. The sales manager
there might make all the decisions on the pricing of the car, but it’s the
finance manager who makes all the decisions on the financing of the car.
Talk with the right decision maker, no matter what the situation.
Remember, rarely in life does something work all the time. However, if you
try these negotiating tactics many times, they will work some of the time.
Have you have ever gone to a restaurant and seen people yelling at the
waitress? The food is no good, the chicken is cold, the fish is bad, and
the poor waitress is about to cry. She wants to help, but what can she
do? Nothing; she’s not the decision maker. Then she goes to the manager
and the manager comes over to your table. This manager is the person you should complain to . . . the person in charge. Negotiate on a
property only with the people who control it and can make a decision.
Ask them, “In whose name is the property? Is it yours? Are you the one
who can make the ultimate decision to sell?”
Here’s a good example of how a few well-selected words can bring in
thousands of dollars as a result of skilled negotiations.
When you call on a house advertised at a price of $200,000, and if
that’s a good deal, many investors may just offer the listed price. Let’s
say the property is worth $280,000. The seller tells you it’s worth
$280,000, and it is. It is a great deal. Many investors would just accept
that great deal and have $80,000 of potential profit. Not bad!
However, what if you ask, “Why are you selling?” What if they respond
that the mortgage is $150,000 and it’s going into foreclosure. The sellers
need to pay off the debt—$150,000—plus they need $15,000 cash
so they can move. Now you know that they may take $150,000 plus
$15,000, or $165,000 instead of $200,000. That one question could
possibly save you $35,000.
Then you ask, “Can you do any better? What is the least you would
take?” What if they say, “Well, if you could get me $10,000 soon, I’ll
take it.” You just saved or made another $5,000 by asking some key
questions. Perhaps you are skeptical and think that this does not work.
It definitely does not work if you do not try it! This is exactly what happened
to a student of mine, Carl, in Atlanta. By asking those key questions,
he saved or made an extra $40,000 on what he knew was already
a good deal!