Thread: What to Ask When Negotiating

When negotiating a purchase, the 'WHY' question precedes What, but when selling, the 'WHAT' issue should come before the 'Why'. You can't scratch an itch until you find it. Because negotiation is essentially a problem solving technique, you've got to understand the motivation of the other party. I have a sort of pecking order for motivation. I place greed at the very bottom in terms of probably negotiating success. What I look for are personal factors. You can read the full article for free HERE

Somewhat related, serial entrepreneur and financial blogger James Altucher differentiates between selling and negotiating and why he believes that selling is more important.

10 Keys to selling anything

The best negotiators ask a LOT of questions and spend twice as much time listening than they do talking. Only when you get to the REAL reasons why someone is selling can you formulate an offer.

Price is rarely the real need. You'll get a lot more offers accepted if you make an all cash offer AND a terms offer.

My daughter just got a great deal with zero down, zero payments, and zero interest. The balance is due in 1 year

There have been some great lessons about negotiating at CashFlowDepot.com this week.

Negotiations are not about beating the seller down on their price. It's about determining what the seller really needs and what you really want, then creating solutions which will work for both of you.

Too often real estate investors negotiate on price alone. That's a big mistake and the main reason why deals are lost.

See the article "Should You Negotiate On Price or Terms

Here's an example. My daughter got a call last week from a postcard she had sent out a year ago. The out of town seller was motivated to sell because the house needed $40k in repairs. She didn't have the $40k and the house could not be rented until the repairs where complete so the house is costing here money every day it just sits there. It is a free and clear house worth $180k fixed up.

The seller has called several investors who made low ball all cash offers.

Before making an offer, my daughter talked to the seller to determine her main motivation to sell was that she just didn't want to spend the money to fix up the house and didn't want it anymore.

So my daughter made two offers. One was an a low all cash offer.

But she also made an offer about 10% more with zero down, zero interest, and zero payments with a balloon in 12 months. This is the offer the seller accepted.

The seller didn't need the cash now. But price was important to her and that's why she turned down all the low ball all cash offers.

When you make two offers you are much more likely to get one of them accepted.

On Friday, I'll tell you my daughter's exit strategy which put $15,000 in her pocket plus $875 per month in cash flow.

While you're at the Blog, you should also take time to read "How Much Money To Your Make While You Sleep?" (It's 5 pages long so get comfortable before you start reading)

Your #1 objective as a real estate investor should be to stop trading your time for money and instead get your money working for you can get money coming in while you sleep!!