Do you like secrets? Here’s a golden one:
All of the profit in a deal is up for grabs.
However, it’s up to you to use the right words and ask the right questions in order to get your share.
It’s up to YOU to get what you want before you close.
You do that through compelling and timely negotiation. Understand, not all real estate negotiations are a head to head battle. Sometimes a successful negotiation can be accomplished by asking a single question, and that leads us to another secret. In fact, the very secret I promised in the headline.
Asking for what you is as simple as real estate negotiation gets. But! Just because it’s simple, don’t underestimate it’s value. You don’t have to be a negotiation ninja with decades of practice for it to be effective. Just ask. Other skills of negotiation will develop as you go, but begin by just asking for what you want.
Now, asking for what you want on a regular basis can take some practice and must come as naturally as drinking a glass of cool water on a hot day, because if a seller even senses a smidgen of desperation, you’ll be met with more “nos” than “Yeses” and sometimes the seller will even turn the table on you and start asking you for stuff.
You have to act like you don’t need it. You can’t be afraid to ask. And that can take practice.
The moment you are afraid to walk away from a deal, you have lost.
So, don’t show fear. There’s nothing to be afraid of anyway. All the seller can say is no. No big deal.
Just in case asking for a price reduction from a seller does indeed scare you, here’s a place you can practice.
This practice tip I’m about to share with you was given to me 20 years ago and has since paid me no less than $20,000 in the two decades I’ve been using it.
Here it is:
The next time you check in to a hotel, as the front desk clerk is looking for your reservation, lean in, look around, and surreptitiously say (like it’s a secret between you and the clerk), “This is a really special night. Is there anything special you can do for me?”
That’s it! Just ask the question. You’ll be surprised by the results. Almost every time, I get something for simply asking that question. Sometimes it’s an upgrade, sometimes it’s a reservation at an exclusive restaurant and this one time when I arrived to my hotel room I was met with champagne and strawberries. I never know what I’m going to get, but I almost always get something.
That exercise is great training ground for your real estate negotiation and overall business. Plus you’ll experience some plush upgrades while you’re practicing. Now, that’s the kind of training I like!
Listen, negotiating has actual dollar-bills-in-your-pocket type value. Don’t underestimate the cash value of your negotiating skills.
Your skills will save you thousands, tens or possibly hundreds of thousands of dollars throughout your real estate investing career. The amount will depend on how confidently and consistently you ask.
Last year a seller told me he wanted $200,000 for his property, which wasn’t a bad price at all. I could have done the deal at 200k, but I prefer to put as much profit in my pocket as possible so I acknowledged his price and asked this question:
So what’s your bottom line?
That’s it! Do you know what he immediately said? I can’t take a penny less than $185,000.
I put $15,000 in my pocket by just ASKING ONE QUESTION.
Another question that works very well for me in the same scenario is, “What were you realistically expecting to get?”
Sometimes a seller won’t drop in price, and that’s fine, but you need to ask EVERY time. You’ll get a concession far more times than not.
Ask until if feels like breathing.
Practice asking when there’s no pressure, when there’s nothing to lose. Because, if you only ask when you need a price reduction (the smell of desperation), it’s not going to work very well.
There are many ways to request concessions in real estate, and if you practice asking every time, regardless of need, then you’ll get to a point where you’ll be making money with just about every question you present. Don’t underestimate the value of your real estate negotiation acumen, and don’t underestimate the value of asking for what you want.
You’ve heard the old adage, It never hurts to ask. But it can hurt you NOT to ask, especially over the span of your real estate career.
So get out there, ask for what you want, quit leaving money in the deal and grow that bottom line.