I’ve been in the Real Estate investing and selling business since 1983. Over the course of that time, I’ve bought many properties, and sold over 2,500 homes as a Real Estate Broker. In all of those deals, whether they were mine or for a homeowner or investor, I’ve noticed common negotiating concepts that have led to not only great deals, but that left both sides feeling like winners. Sounds pretty great, right?
In an effort to pass on this success, and consequently winning vibes you and others in your negotiating ring, I’ve decided to share the fundamental concepts to creating those win–win deals so you too can find happiness at the bargaining table of life.
1. KNOW YOUR INTENDED OUTCOME
You must know what you want going in. What would be the ideal situation, and what can I live with if I cannot get the ideal situation. Make two lists: “What I want” and “what I can live with”. Keep these lists clearly in mind as you move through your discussions.
2. SEE IT FROM THE OTHER PERSON’S POINT OF VIEW
This is a concept most people miss, not just in negotiating, but in all areas of their life! They are so busy thinking about what THEY want, they never stop to think of things from the other side. In negotiations, this is a must. You have to know what is MOST IMPORTANT to the other side. How do you find this out? You simply ask. Dig deeper, find out what they REALLY want. Once you find out their MOST IMPORTANT WANTS (Good news: it’s often something easy to make happen) you can go about finding how to deliver this.
For example: I once got a deal over two other investors with better offers because I let the seller remain in a house for five months longer, allowing his daughter to graduate high school with her senior class. His daughter was happy, he was elated, and I got to broker a great deal. Win–win-win.
3. KNOW ALL OF YOUR OPTIONS
One of the great things about Real Estate investing is there are always multiple ways of getting the job done. Sometimes different plans work for different circumstances. When creating deals, it is key to look at ALL OF YOUR OPTIONS.
For example, You could go to a seller and say I can buy your home for $190,000 all cash, or I can buy it for $210,000 with you carrying back a 2nd mortgage of $50000. Once you buy the property, again ask, “What are my options?” You think for a bit and list:
I can sell the home.
I can rent it, or do a lease option.
I can check the zoning with the county. Oh look, I can rezone the property as “Commercial” and get a better lease on it. Oh and it’s near the freeway! I can put a billboard on the back of the property and massively increase my cash flow.
By laying out all the options, and checking out all that can possibly be done with the property you can find “the highest and best use of the property” to maximize your profits and cash flow.
When negative situations arise, (which they often do, it goes with the real estate territory, not to mention, life in general) I’ve found it necessary to keep my head when all around people are losing theirs”. This is the time to take a step back, again, look at all options, and move forward swiftly and with conviction, to solve the situation in a win–win manner. You want to find a way to get the deal back on track (if possible) and get over, under, or around the problem in a timely manner.
If you find yourself in stuck in a tricky spot, especially when it comes to negotiation, pull out these key concepts. While targeted specifically for real estate in this article, these tips can be used for ANYTHING. Real Estate negotiating, getting a raise, or even parenting. If you can master these three concepts, there’s no reason everyone can’t walk away from a negotiation feeling like a winner.