By: Stephen Cook
I know that one of the toughest things for a beginning
investor is negotiating deals. We are often our own
worst enemy when it comes to this. For the most part,
I think that when we envision good negotiators, we see
smooth talking individuals with an answer for everything.
For many of us, this is a horrifying vision because
smooth and slick does not come naturally to us and,
if weíre honest, we donít want to come across that way.
So how do we negotiate a good deal when we donít have
the gift of ďslickĒ, and we donít want to become ďslickĒ?
I do not consider myself to be a smooth and slick
negotiator, but believe that Iím pretty good at what
I do. Negotiating didnít come naturally to me, but came
together over time and with practice. There were two
things that made me a good negotiator and can help you
First, you must be willing to stop talking and listen.
When dealing with someone in this business, whether
you are the buyer or the seller, you need to sell yourself.
You can not sell yourself without listening to the other
partyís needs. Listen for what is important to the other
party and then show them that you can address it. In
my negotiating, I keep the other party talking as much
as possible. When they run out of things to say, I ask
another question in hopes of learning a hot button of
theirs. When I hear it, I ask a question that acknowledges
I heard their needs. An example would be as follows:
Seller: ďMy house needs a ton of repairs, but
I canít afford to fix them in order to put the house
on the market. Plus, we canít really live here anymore
because the water is coming in through the roof.Ē
Steve: ďSo basically you need someone like me
who is willing to buy your home as it sits right now
to help you out. Is that true?Ē
My question to the seller acknowledges that I heard
their need, provided them with the benefits of dealing
with me, and got them to acknowledge that dealing with
me would be good for them. You must listen, itís very
The second thing that will make you a good negotiator
is knowing, without hesitation, what the deal needs
to look like to be a good deal. Other investors often
ask me how I get such good deals and I tell them that
Iím not willing to pay above a predetermined amount.
When dealing with sellers, know what your top dollar
amount is. For example, if I walk into someoneís home
and know I will only spend $150,000, then Iím firm in
my convictions and all of my questions are leading the
sellers toward selling me their home for $150,000. I
donít negotiate up because the sellers say that they
need more money.
Once they acknowledge that Iím the person to help them,
we need to come to the price that Iím willing to pay
in order to help them. If the sellers tell me that they
want $170,000, I donít give them $170,000 because they
say that is what they need. I stick to my guns and tell
them the advantages of dealing with me.
Price eventually becomes secondary to the seller and
dealing with me, the person who is guaranteed to solve
their problem, becomes most important. Be firm in your
conviction of what you need to pay. If you are only
hoping to get it for a certain amount, you will pay
more every single time.
I get good deals because the price that I have in mind
is all Iím willing to pay. As long as the number keeps
coming in my direction, I will negotiate until it reaches
the level where I need it to be.
To be a good negotiator, you need to learn just a couple
of things. First, listen to the other party, and second,
know what it is you are trying to accomplish before
going in. If you donít know, the other party will get
their way. As far as being smooth is concerned, your
flow will get better in time. Just focus on getting
what you want and listening to the seller in order to
lead them where you want them to be.
About the Author: Steve Cook
Since 1998 Steve Cook has flipped hundreds of
houses as an active Baltimore-area real estate
investor. Steveís unique specialty is the ďflipping
homes 1-2 punchĒ, a proven system of real estate
investing that powerfully combines wholesaling
houses. Also the founder of www.FlippingHomes.com,
Steve is dedicated to helping others in this thriving
online community succeed through understanding
and aggressively applying his time-tested, step-by-step
approach to flipping
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