5 Negotiation Tips for Newbie Real Estate Investors
Your negotiation skills can make or break your success in real estate investing. Knowing how to negotiate will open the door to better deals and help you build more profitable assets over time. However, to get there, you must learn how to understand people and read their body language along with all the nonverbal cues. Here are 5 tips on how to get better at negotiating right away!
#1 Only Negotiate in Person
Nowadays, negotiations have gotten a bit more challenging since in-person communication has been limited. The truth is, it is nearly impossible to negotiate the right way unless you’re meeting the other side in person. Why? Because reading body language signs is impossible through a computer. If you talk to someone in person, you get a lot more information about their stance in the negotiation process - you can see whether they are nervous or displeased, whether they are looking for a quick solution or are they calm and dedicated to get what they want. Overall, by meeting in person, you will be able to make better judgment during the negotiation process. If for some reason you cannot meet in person at all, consider negotiating over a phone or video call. Just avoid texting and emailing!
#2 Learn to Say No
Many beginner investors feel like they’re not allowed to be direct during negotiations and simply refuse what the other person is offering. Remember, this is business - you don’t have to accept anything out of politeness. The goal is to get to an agreement that works for both parties. If you’re settling for less, you’re only setting yourself up for failure. In real estate, accepting a bad offer means dealing with financial consequences later on, which is something you should avoid. Hence, try to get to know your opponent as much as possible but learn to say no when they start pushing your limits.
#3 Know When to Stop
Just as it is important to say no, it is important to learn when to stop pushing the other person’s limits. Every seller has a cut-off point in the negotiation process. USually, they are not willing to negotiate past that point. You have to be aware of this so you don’t end up pushing too hard and causing them to back out of the deal entirely. Remember, the goal is to get them on your side and make them feel like they’re winning.
#4 The Three Most Powerful Negotiation Tools
Silence, time, and surety of close are the three most powerful tools you can rely on during the negotiations. Sellers want to make sure they’re not wasting their time with you so offering surety of close can put you in a good position. Moreover, using silence can help you get what you want, simply by letting the other person speak first. Instead of reacting right away, take a short break and let the other person initiate the next step. Silence usually makes people uncomfortable so they jump to conclusions just to fill the empty space. Lastly, you can always use time to give you an advantage when negotiating by promising to close the deal quicker than the other bidders.
#5 Balance the Interests
Last but not least, the best way to turn your negotiating efforts into success is to emphasize the shared interests between you and the other party. Remember, for the negotiation to be successful, the deal needs to be suitable for both parties. Think about the shared goals and common objectives you have with that person and how closing this deal will help both of you progress in some way.
Start Negotiating Smartly
These five tips will set you on the right path and help you negotiate like a pro - even if it’s your first time doing it. On top of these strategies, make sure to always use affirmative language and create a win-win situation, listen before reacting and be willing to compromise. Observe the other person’s behavior and try to gather as much information about their situation as possible. All of this will help you build a stronger foundation for your offer, which will allow you to negotiate with more power.