The art and science of negotiation is a skill that is very useful in real estate investing. Here are 6 negotiating tips that anyone can use.
Do Your Homework
Before you try to get any real estate deal or really any negotiating situation you should do enough research. Otherwise, how will you know if it is a good deal or not. Know the facts, values, and the numbers. There is always a magic number you should know before walking into negotiations. The magic number will be the maximum amount you will offer. Know it and stick to it.
Don’t Get in A Hurry
Getting in a hurry during a negotiation is not good because you will end up making decisions you later regret. Try to critcally think about the offer from all possible angles before you make your decision.
Go off the Facts, Not Emotions
Probably one of the biggest mistakes people make when negotiating is that they get their emotions involved. You should strictly look at the numbers, if you can’t get a good deal walk away.
Don’t Make it All About You
The ability to put yourself in the other persons shoes will take you a long way. Think about what the other party wants. Then try to come up with solutions on how you can provide them with something they want while also getting what your want out of the deal.
Start the negotiation or conversation about what they want, figure out the solutions, and then what you want. If you genuinely want to help the person out and make their concerns your concerns, most people will want to help you out to and come to a middle ground. Be stern but fair. Don’t give anything to the other party without getting something equal in return.
Do Less Talking and More Listening
A lot of people may think that talking someones ear off will convince them to take their side. In contrast, this most likely will have the opposite affect. If you do all the talking how are you going to figure out what the person wants. Because the more you know about what they want the more likely you are to be able to negotiate. All conflicts are better solved by listening than talking. There is a rule in negotiating that is the 70/30 Rule. When negotiating, you should listen 70% of the time and talk 30% of the time.
Don’t Be Afraid to Walk Away
The most powerful negotiating position is the ability to walk away. If you don’t get the deal you don’t be afraid to walk away and never look back. When you walk away, you have all the power. The point when one party decides to walk away is when the other party will either come up with their best offer or let you walk away. There are plenty of opporunities out there don’t get stuck on one that just doesn’t work out.
Keep these tips in mind next time you find yourself in a negotiating situation and I promise you will see better results. Don’t do all the talking. Try to listen and figure out what the other person wants. Then offer solutions and ways they can get what they want while also providing you with what you want. Don’t get emotional. Only look at the facts and the numbers. Most importantly don’t be afraid to walk away.