Great negotiators have a lot in common. Like any skill it needs practice. Fortunately, you probably have opportunities to negotiate something practically every waking working hour of every day.
So Practice. Kick Butt. Repeat.
Here are some tips to help:
1. Attitude Is Everything
In every negotiation, going in with a right attitude is important. Your attitude alone can sometimes make or break a deal. What’s the right attitude to display in negotiations, you ask?
- Take responsibility to not let negativity override your conversation – that’s the last thing you want to bring to the table. Negotiation is also selling – who wants to buy from Eeyore?
- Keep a ‘gateful mindset’ in the back of your head. Every day above ground is a good day. Be thankful for it. That good feeling will make people more comfortable around you.
- Watch your words. Be mindful of what comes out of your mouth. When people become nervous, they tend to talk a lot. If you have confidence, you will be able to articulate your position better.
- Be humble and thoughtful. Be interested in whatever the person you’re dealing with is talking about, and be engaging. The best negotiations are the ones where both parties walk away from the table satisfied. Try to figure out what the other side really wants. Is it something you could give up easily and still have what you want?
- Honesty really is the best policy. If you are trying to trick the other side or are using less than honorable tactics, you will be nervous. Your demeanor and attitude may reflect it, which will make the other side nervous. If the other side figures out what you’re doing, you can kiss that negotiation goodbye.
It’s important to write down your priorities instead of just winging it. Be clear with your intentions. Get a notebook or a piece of paper and write down what you should say and what you shouldn’t. This will give you a lot of confidence. It’ll be more difficult for the other side to push you somewhere you don’t want to go.
Sometimes, the feeling of nervousness, fear, or intimidation is inevitable. But another thing you need to remember is that these feelings can affect your attitude when you walk into a negotiation. So, take a moment and step outside of what you are feeling and ask yourself, “Why am I feeling this way? What should be my attitude?” and consciously change the way you feel about the situation. It may take some time and a lot of work to be a master of your emotions, but you’ll get it.
2. Know Your Weaknesses
Pay attention to what might be stopping you from answering from calls from private lenders, from making calls, from reaching out to sellers, or from people you need to talk to make the negotiation work. Pay attention to what’s stopping you from negotiating.
Often the action that makes you the most nervous or fearful is an indication that it is the action you should be taking. Think of when you asked a member of the opposite sex out on a date that you thought was out of your league. Remember that feeling? Don’t you think it was the right thing to do? If you were rejected, I bet you felt better than if you had chickened out.
These are the types of personalities you should be watching out for:
- The Doom Sayer. This type of person is a worrier and doesn’t want to take any social risks. These are the ones who are going to lose accounts and are not able to move fast.
- The Over Preparer. This type of person is never satisfied with anything. They feel like nothing is going to be good enough. They tend to over-analyze and they under-act. Some of the symptoms are buying courses and books they’ll probably never read or listen to countless webinars but never taking action. Paralysis by analysis
- The Hyper Pro. This type of person is obsessed with looking good – not physically though. They’re constantly worried about what other people think, to the point where they won’t even try.
3. Learn from Successful Real Estate Investors
It’s important to cultivate relationships with people who matter. To do this, you want to tap into a team because doing everything on your own can be a little tough. Plus, unless you’re a teenager (I’ve heard they know everything), there’s a lot you just don’t know how to do. Other people can make your life a whole lot easier, and profitable.
Attend real estate investor organizations and meetup groups in your local community. Try to make friends with successful real estate investors in your area and learn from them some of their negotiation techniques. Masterminds are a great way to do this too. Connect with the people around you and build a dream team consisting of bankers, brokers, insurance agents, mentors, apprentices, repairmen, and other people that you are going to need. Cultivate friendships with them and give generously – nobody likes a taker or a user. Figure out how you can help each other.
One tip here. There are lots of people who talk a big game but don’t necessarily deliver. You should do your due diligence with people you’re considering for your team, just like you should for houses to buy or renters to fill your vacancies. Ask for references, have them show you demonstrated successes in the past, and run away if something doesn’t feel right.
4. Listen More. Talk Less.
You have to remember that when you’re talking to people, you don’t always have to respond. If you throw in a question, leave a little quiet space. Maybe count to 10 if you feel the need to jump in and answer the question. Ask yourself if you are really listening to what they have to say or just waiting for your chance to talk. Here’s Alex Joungblood take on this (it’s about half way down).
If you are in a conversation with a seller, really pay attention to what he/she is saying. You can learn a lot by reading between the lines or just their body language. You were made with two ears and one mouth for a reason. Use them in that proportion.
5. Understand How People Behave
You interact with different people, so it’s a given that you’ll also encounter different personalities. You can generally group these personalities into 4 types:
The Analytical Person
- Might appear a little cold
- Might be a little slow to react
- Focuses on future direction
- Wants to be right
- Does not really want to be involved
- Show your support
- Take time and don’t rush them
- Provide facts and figures
- Appears to know what they want or where they’e going
- Quick to React
- Makes decisions based on facts.
- Willing to take risks
- Get them what they need in a timely fashion
- Don’t try to change their mind with a direct approach
- Try to understand their objectives and find common ground
The Amiable Peer
- Places priority on relationships
- Dislikes rejection and conflict
- You can talk to them about personal issues
- Wants to be right
- More relaxed; unhurried
- Show personal interest
- Establish a cooperative effort
- Talk slower
- Be patient
- If you disagree, talk more about their personal feelings and opinions
- The fun person
- Appears communicative
- Warm & animated
- Motivated & social
- Support their dreams
- Don’t argue with them
- Keep everything fun and active
You’ll know which category the person you’re talking to belongs based on how they respond to your presentation. Pay attention to the subtle cues they give you with how they speak, their tone, or their pace. Synchronize yourself with their vibe and the things they want to talk about.
6. Don’t Be Careless With Your Words
People can hear two words that have the same meaning, and have completely different reactions to them. Here are some words that people can take the wrong way and sour a negotiation. Then we’ll give you some possible substitutes that’ll improve your chances:
- Sold sounds pretty final – especially for a motivated seller who is emotionally attached to the house. Instead use the word help. As in this deal will “help the seller” fix their situation.
- Deals. Top sales people never offer deals to their prospects, they offer opportunities.
- Sign. People will tell you they don’t want to sign anything unless they’ve had time to read it, give it a ton of thought and have their lawyer reads it. In the meantime, your competition is circling. Instead of asking them to sign, tell them to approve or authorize your agreement.
7. Actions Speak Louder Than Words
Body language reveals the truth about what people are thinking. Pay attention to your body language – what your hands are doing and where your eyes are looking. When you’re in the midst of a negotiation, non-verbal can help convey assuredness and lead to a prospect saying ‘yes’.
Watch the body language of the other person as well, and try to mirror his gestures without being too obvious. If they cross their legs, you cross your legs. If they put an elbow on the table, do the same — although not at the same time. When everyone is in sync, it will naturally make other people feel more comfortable around you.
8. Ask the Questions You Need Answers To
If you want the right answers, you have to ask the right questions. Focus on getting the information you need to make the deal, not giving any superfluous information. Questions will reveal the other party’s priorities. Consider having a script and go over it before the negotiation begins. If you have people out selling for you, go over their questions and give them scripts as well. Ask them what’s working and what’s not. Constantly improve the scripts for the next negotiation.
9. Don’t Be Afraid of Objections
If you’re a real estate investor and you haven’t faced some sort of objection, you probably aren’t trying very hard. One way or another, you’re going to hear disagreements about what you’re offering. If you don’t, you’re not asking for enough.
When you do face an objection, the first thing you should do is pause for a moment. Let it sink in. Let them know that you heard them and you listened. Acknowledge that they have the right to object and don’t butt heads with them. That will only lead to unwanted tension which will then lead to a failed negotiation.
10. Saying ‘No’ is OK
In the real estate industry, you’ll hear a lot of ‘no’. In fact, you should expect to hear a ‘no’ in most transactions—but stay positive and look for the yes. Not taking ‘no’ makes you sound desperate. Like Joe McCall said in his podcast episode, it can be very off putting for a buyer. See rejections as an opportunity for feedback or constructive criticisms. Do not take it personally. Getting hurt is inevitable but just shrug it off. Most successful real estate investors have had more rejections than… well… let’s just say they’ve heard a lot.
Look at rejections as a detour sign. It might mean it’s time to move on to the next negotiation and it saved you a lot of time on a dead lead.
11. Don’t Be Afraid To Walk Away
It’s been said that the most powerful tool you can bring to a negotiation is the willingness to walk away. If you’re desperate, it’ll show. When you’re willing to walk away it helps keep your emotions in check and pave a much clearer path to the things you need from the seller to close a deal.
Being willing to walk away means that you’re only looking for deals that make sense and fit the type of investing that you’ve committed to. You can pass off deals that aren’t a match to other investors for a cut, but you need to stay in your zone of competency. The numbers have to make sense. This is a no-brainer, but so many new investors get excited for their first deal or two and can’t walk away. If for whatever reason you think you can’t walk away then the likely hood of you making a great deal goes down exponentially.
Remember These 3 Things & Negotiate Like a Boss!
1. Always have a positive outlook.
Even if you hear a lot of objections, a lot of criticisms, and a lot of rejection, at it in a positive light. It’s going to be an opportunity for growth that will propel you to become better in dealing with people.
2. Prepare a script.
Even though you’re armed with a script, you shouldn’t just read it word for word. That would be weird. A script should serve as a guide in asking the right questions, getting the right answers, and staying on track.
3. Be natural.
Don’t be too uptight or too tense, rise above your nervousness. Be natural and let the conversation flow.
Share with us what you’ve learned!
Every tried and true real estate investor has got some tricks up his sleaves from doing a bunch of deals. If you think we’ve missed something or maybe just want to share something you’ve easrned, comment below.