Part of the real estate investment business, of course, involves buying real estate. For new real estate investors, there’s a lot of apprehension about buying properties. There’s a lot of mistakes made, too, and probably more than a few failed deals!
Even for those successes, there was likely opportunity to save more on your deal than you did.
Negotiation tactics are part of really winning at buying real estate. Real estate deals can be tough to navigate—every seller is motivated by different things, values different things, and responds to different things. Learning how to deal with a seller with charm and charisma is one thing (and an important thing), but being able to step up with bold tactics is a skill to develop if you really want to win.
It does come with risk. Remember, not every seller will respond well to every tactic, and it’s up to you to gauge and judge for yourself which strategy is appropriate.
These are just some of the tricks and tactics you can utilize to get a better deal out of your seller.
5 Negotiation Tactics to Lock Down Real Estate Deals
Set out some bait and see what you get. Nibbling is the technique where you, the buyer, ask the seller for concessions not all at once, but in small increments. You chip away at them, one by one, so that they don’t seem like too many or too much all at once. The danger of this tactic is annoying the seller or asking for too much over time.
But, if you deploy this tactic correctly, it can serve you well. For instance, if the seller is ready to close the deal and you ask for a concession at the last minute, they might just give in to you just because they want to get it all over with and it isn’t worth the fight to reopen negotiations.
Nibbling really comes down to wearing the seller down with small demands. It’s annoying, absolutely. But it works!
Let Silence Happen
Human beings are incredibly uncomfortable with silence. If you learn to be comfortable with it, you will have a distinct advantage over your competition. Say you’re in negotiations. Whether it’s with a seller or some other kind of business deal. They make you an offer. Instead of answering immediately, you are completely silent in response.
And you stay silent.
How uncomfortable would that be for the other party? Chances are, they will break the silence—and interpret it as your being displeased with their offer. You may not have to negotiate at all for them to lower their offer.
Silence can be a powerful tool, used correctly. The danger is in coming off as too distant or aloof. You do have to eventually give them something to work with, or you run risk of frustrating them.
Gather the Intel
When you’re in competition with other buyers, one of the greatest advantages you can have is the power of information. What can you know that the other buyer might not? For instance, if you know just how motivated the seller is—maybe they need to close quickly because of a job offer—you can swoop in and give them the timeline they need to get things over and done with. You do that by listening.
Stop talking so much and listen. Figure out what the seller wants and needs, not just what you want. The more you can learn, the better.
There is also information to learn about the area—especially if you’re a remote investor. Think about comparable home sales, demographics, and other information that you can point to help you better negotiate.
Make a Trade
As we said, figuring out what the seller wants is important. Ideally, you aren’t the only one walking away from the deal satisfied. Trades in a deal can be very beneficial. Say a seller needs to close in a month: you can agree, and ask for a price reduction in turn. Or have closing fees waived. Really, the goal of trading if that you make no concessions to your opposition without getting something in return. Haggle a little!
Stop Looking for a Power Trip
There’s no doubt that negotiating comes with a lot of powerful feelings. A successful negotiation can really inflate your ego. But in a negotiation, that ego has to be checked at the door. The best and most successful negotiations happen when you can get your opponent to let their guard down.
You do that through presenting yourself as less threatening: humble, complimentary, and as a friend. Give praise. Say nice things. Be agreeable in your words and tone without giving them ground. If you’re in a negotiation to have your ego stroked, it’s not likely to go very well!
Turnkey real estate companies already have the properties you want and need for real estate investment. So why sink hour of time and stress hunting and negotiating when there are opportunities ripe for the picking in great markets across the country?