6 Powerful Negotiation Strategies To Use With Sellers (And In Life)
Throughout your life, everyone you meet is uniquely different They have different temperaments, personalities, educational levels, status, and experience. They have their own goals, dreams, and desired outcomes. Throughout life, and certainly in your multifamily real estate business you will be negotiating for your own desired outcomes. You’ll be negotiating with brokers, sellers, buyers, renters etc. You’ll also be negotiating with co-workers, your spouse, and your children. You can’t escape the need to regularly negotiate. Fortunately, negotiation is a skill you can study and learn. Here are 6 quick strategies that will help improve your negotiation skills.
1. Using the Deadline
It’s critical to use deadlines when you’re negotiating. They keep the negotiations under control and are very helpful in getting results. When you start a meeting or even when you’re negotiating over the phone, tell the other party that you need to be somewhere at a certain time. Let them know they may not hear back from you for a few hours. It’s also very helpful to set a date when the offer will expire. This will motivate people to take action.
2. Using Competition
Using “competition” is always helpful on either side of a real estate transaction.
If you’re the buyer, reminding the listing broker and the seller that you’re looking at several properties is an effective technique. If you’re the seller, letting prospective buyers know that there are other people interested in the property also works well. This can be a very powerful strategy.
3. Using the “Flinch”
A “flinch” is a small facial expression or sound that subtly communicates displeasure with whatever was just said or presented. Although a flinch is subtle, it can create serious concern in the other party’s mind. Use flinching to react to a financial offer or when the other party is becoming too aggressive in the negotiation. This is an extremely effective negotiation tactic.
4. Using Silence
Everybody becomes uncomfortable during silence. People want to fill the silence when it happens. After you express an important point in a negotiation, just look at the other party and smile.
Don’t say a word.
The longer you can wait without talking, the more uncomfortable the situation becomes. Eventually, someone will have to break it. Typically, the first person to speak during these situations loses an edge in the negotiation. Very often, that first response will be unguarded. It could give you valuable information, as well.
5. Leaving the Negotiation
Preparing to leave a negotiation, or actually leaving, is a very powerful strategy. It can backfire, as well. It can really upset the other party, which you may have to deal with later on in order to reopen negotiations. Remember if it’s a buyer’s market, the seller could be more willing to negotiate only because there are less buyers. But if you are competing in a seller’s market, walking out of a negotiation could mean they simply select the next buyer in line. If you are the seller, you should also remember there is always another property for sale. The buyer could just shift their attention to another property.
6. Using Valuable Concessions
Ask for more in your offer than you expect to get…
…because it leaves room to negotiate and give up non-essential pieces. It can be very helpful to negotiate valuable, non-monetary perks or concessions into your contract. These perks could satisfy the buyer or seller without impacting the financial terms. An example of this could be a quick closing. Never say yes to the first proposal. You could likely do better. When you immediately say yes, the other side is usually not happy, because they feel like they may have given too good of a deal.
Negotiating For a Win-Win
Arriving at a solution that leaves both parties feeling as if they have won is ideal. A win-win solution requires preparation and knowing what motivates the other side. People are not always focused on the things we think they are. We never know what the other side is thinking. Sometimes some gamesmanship is required. If you will have an ongoing relationship with this person after the negotiation, such as in seller financing, seeking a win-win is critical.
I hope that you have found this information to be valuable and I encourage you to study and practice negotiation in your life. I know that it will help you get closer to achieving your goals of investing in multifamily properties.