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Two MUST
have skills to help you in making big money in Real Estate Investing
by Linda Overstreet
We are switching gears here
a bit, especially as so many people are shifting from the stock market to
Real Estate Investing.
We have been learning and teaching real
estate investing for a few years now, and there are two fundamental
negotiating techniques you’ll need to learn to become successful with your
investing.
In fact, these two techniques will often
make the difference between success or failure in your negotiations with
sellers.
First Technique
Reluctant Buyer
In any negotiation with a seller, one party
wants the deal more than the other party. You want to always position
yourself as the reluctant buyer so that the seller is naturally put into the
role of selling you on any prospective deal. You do this by using the
reluctant buyer technique.
Being a reluctant buyer puts you in the
strongest negotiating position of all. It works so well because it taps
into the seller’s fear of loss, which is one of the strongest drives in all
of us.
Reluctant buyers use specific language
patterns over and over again. Of these language patterns, the most common
call for you to qualify any of the statements you make to a seller about
your interest in moving forward in a deal.
Examples of reluctant buyer language
patterns:
‘I don’t know if I will be able to do this or not
but…’
‘My partner may hate this idea, but what if…’
‘With all that’s going on in the world today I’m not
even sure now is the time to buy another investment property, may I ask
you a couple of questions first to see if this is even a property that I
would want to buy?’
Being a reluctant buyer means you are
structuring your negotiation so that the seller is constantly being put in
the role of selling you on the idea of making a deal happen.
Technique Two:
Negative Phrasing
The second technique that is so powerful
for you to tap into is called “negative phrasing”. Remember that most
sellers are scared when they are selling their house. For most of them it’s
the single biggest asset they own.
So in order to protect themselves sellers
will look for what’s wrong with any prospective offer. In fact, it’s been
our experience, and the collective experience of over 100,000 of our best
investor clients, that sellers are more motivated by the fear of loss and
being taken advantage of than they are by the desire to make a profit when
they are selling their house.
When sellers are motivated by the fear of
making a mistake and looking for what’s wrong they do something called
“mismatching. Mismatching means the seller will say or think the opposite
of many of the things you assert.
For example, if you say the price is too
high, they’ll say it’s too low. If you tell them that the property
management company they are using is mismanaging the property they will
argue with you that the property management company is doing a fine job.
This brings us to one of the most powerful
negotiating techniques available to you. It’s called “negative phrasing”.
Negative phrasing is a way to tap into this tendency of the seller to
mismatch what you say and give the perceived power in the situation back
over to the seller in a way that increases the seller’s comfort level in the
negotiation.
Examples of negative phrasing used with a
seller:
Example 1:
Investor:
What have you already tried to sell the property?
Seller:
I’ve been selling it for sale by owner now for the past
several months.
Investor:
Oh, and that’s been working real well? [Negative phrasing]
Seller: No,
not really. I’ve only got one serious buyer so far.
Investor:
That sounds pretty good for you. When are you going to be closing on
the sale of the house with them? [negative phrasing]
Seller:
Well I’m not actually sure if they are really going to
buy it or not.
Investor:
When does the written agreement you have with them say they will close
by? [negative phrasing]
Seller:
Actually we haven’t put anything in writing yet.
Investor:
Oh, then they’ll be coming back sometime this week with their written
offer? [negative phrasing]
Seller:
No, I don’t think they are even interested in buying it
from me anymore.
Example 2:
Investor:
You probably hated that idea huh? [Negative phrasing]
Seller: No I
didn’t hate it.
Investor:
Yeah but it’s probably not something you want to even bother talking
through right? [negative phrasing]
Seller:
Actually I think we should talk that idea through and explore the
possibility.
The real key with negative phrasing is to
soften both your voice and body language when you use it so that you come
across as naïve or optimistic rather than sarcastic or condescending.
We hope you enjoy learning about making
money with real estate on exiting deals profitably.
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