Seller Negotiation Hacks 5: Gently Turning the Screws
If you have been following this series of lessons, you are familiar with perfecting the art form of investing using the three tactics: “The Opener”, “The Higher Authority”, and “The Blow”. Now I am going to introduce you to some more subtle hacks that will gently turn the screws and tighten the negotiation deal in your favor.
Okay, so where are we? We had our first phone call with the seller and established solid rapport, we implemented “The Higher Authority” and “The Blow” to initially knock the price down….
Gentle Screw #1: Due Diligence and Aggravation
After the first phone call, I hop off the phone and start doing my due diligence. So I will look at Zillow, Google Maps, Trulia, MLS tax reports, comps, and so on… I put all my stuff in front of me and make that 2nd phone call.
The 2nd phone call is designed to build more rapport and dig a little deeper into the real why that motivates them to sell. I don’t want to call it “agitating” the seller’s situation, but at the end of the day we need to bring their real motivation of why they are selling to surface. You need to understand what that real motivation is and they need to be aware that you understand what that real motivation is… then you talk about it.
That second phone call we are really discussing their why and how good it is going to feel to take care of the problem. We might talk about any objections that they have or questions and concerns. I do a lot of “takeaways” in this conversation. I might say something like:
Okay, John. What is stopping you from hiring a real estate agent? Is it that you can’t afford to wait 30, 60, or 90 days for the money?
I kind of end it with a negative so he will come away thinking:
“I can’t wait that long….I can’t afford to pay commission or closing costs…”
I let them talk themselves out of it and come up with that working with me is the best solution. I will even go ahead and tackle other options they might think of by saying something like,
What about doing for sale by owner? Have you thought of that? Do you know how to fill-out a real estate contract, do the marketing, and all of that?”
Gentle Screw #2: I’m a Sweet Sensation
The 2nd phone call is really designed for them to come to the conclusion that I am the best solution for their current situation. I will talk a little bit more about price. I will mention things like comps that are foreclosures, fire sold, or sitting on the market too long. I will ask them if they are aware of this information and bring it to their attention.
I will tell them my partner and I are looking at 7 or 8 other properties in the next couple of days and that most people come to the conclusion that we are the best solution. I tell them that for the few people we are not the solution, but they go to a real estate agents and pay high dollar because they can afford to wait.
I will tell them:
I am just trying to get an understanding and that they said they wanted to sell because of “X, Y, and Z.” Originally when they threw out $100,000 and said you would be more flexible, it doesn’t mean $90,000. Realistically, we are looking at $60,000 or 65,000. I mean, it is kind of like testing a car. I would really have to look at the property and do a test drive before I know. But when it comes to discussing the price, we seem a little far apart. Is it okay if we have an open, honest discussion of where you are?
This conversation, if set-up the right way, will not come across that you being a jerk. It comes across that you have some really good reasons that you are thinking what you are thinking as far as an investment company. All right? So let’s say phone call #2 is going well…
John may say that even though he said $90,000, he might be more open to being more flexible with me. If my appointment is that night at 6:00 PM, that second phone call may have moved the ball from my side of the field to the 30 yard line on their side of the field.
Gentle Screw #3: Confirmation and Subliminal Persuasion
So now I have done two phone calls with the seller. If I have to make a third phone call I will. But the phone call I make after that is the appointment confirmation phone call. You really need to do this. I can’t tell you how many times you go to the appointment and the seller is just not ready to sell right then and there. They just want to have another conversation. When you walk away without getting the deal, it is a pretty discouraging. But, if you set this up the right way, you can set their expectation to sell.
When you call to confirm, you can say something like:
Hi John, it’s Cody. I am really excited to meet you face-to-face, shake your hand, and get to know you better. I really appreciate you giving me the ability to do business with you today. I just want to call and confirm our appointment for 6:00 tonight. I am going to bring my pen, my paper, and a contract because I am absolutely certain that we will be able to do a deal today that will benefit the both of us – but most importantly, I want to be able to help you take care of X, Y, and Z. I am really excited about that.
So I am just confirming the appointment and making sure you are confident that if we come to terms that we can go ahead and take care of this today. Does that sound good?
I get that verbal confirmation for the appointment before I go out to the property, whether it takes 2, 3, or 4 phone calls.
When I get to the property, I have many more Jedi mind tricks to ensure the deal is signed before I leave the appointment. If you want to know more of my secret techniques, keep an eye out for Hacks 6: Jedi Mind Tricks.
Until then, keep it cool.
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