Negotiating Real
Estate Deals
Why should you sometimes go slow when
negotiating real estate deals? It's all about the power
of time investment. Let me explain with a story.
One of my less-pleasant experiences selling real estate
was when I sold a home for a real decent guy, and the
buyer was a lawyer. I was new to real estate, and this
lawyer knew all the angles. Without getting into all the
dirty tricks he used, I'll just say that the buyer had
everyone involved angry, frustrated and worn down.
As a final blow, he arbitrarily decided that he wanted
the price lowered by another $5,000. Now that's hardball
negotiating. The seller was almost ready to throw away
the whole deal, but he had been trying to sell the home
for two years, and we had been working with this buyer
for months. None of the agents or brokers involved
wanted to see all their effort go for nothing.
There were three agents under two brokers involved in
the sale. We all agreed that suing the buyer wasn't
worth it. Instead, we gave in. The seller had enough of
the buyers tricks, so each of the other five parties to
the sale (3 agents, 2 brokers) agreed to each forfeit a
$1,000 of the commission, just to make the deal close.
This is an extreme example of using "time investment" to
your advantage. After investing so much time, none of us
wanted to lose everything. The lawyer knew that, and
used it. In this case, there was nothing in the contract
that allowed him to renegotiate the price, making it
unethical in my mind. Still, it was effective.
Negotiating Real Estate Deals - Ethically
In other cases, it is just good negotiating. If you want
to get the best price on a car, do you think you'll get
it after spending two minutes with a salesman? Let him
invest two hours showing you cars, and he'll be begging
the manager to let the car go for your low offer. The
same is true with real estate negotiation.
Remind the seller about time, to let him remember the
time he has already invested. To do this politely, say
something like "Look, neither of us wants to lose the
time we've spent on this and start all over, so why
don't I..." Then offer some small concession.
He is subtly warned that he could lose his whole time
investment with nothing to show for it. The words "start
all over" may even scare him. You set the scene, and
then you offer a way out. This is non-offensive too, if
done right. You say "Neither of us..." to let them know
you're both in the same situation, and it's not just you
threatening them.
This is, of course just one technique of many for
negotiating real estate deals. Take the time to learn
several, at least.
About the author:
Steve Gillman has invested in real estate for years. To
learn more, go get your free real estate investing
course at:
http://www.MakeThatOffer.com
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