Most folks mistakenly think negotiating is a beat-the-other-side-over-the-head-until-they-quit thing. This couldn’t be further from the truth! Over the years, we’ve sat down with thousands of buyers, sellers and tenants and successfully negotiated hundreds of Win-Win deals.
What’s a Win-Win deal? It’s when both parties leave the negotiating table feeling like they ended up in a better place than where they started. They may not be in the exact place they wanted to be, but they are in a better place!
Here’s a nugget I learned from Pete Fortunato: No one is gonna say yes to a deal that puts them in a worse place than where they started. Given a choice between a worse place and the same place, folks will take the same place about every time – in other words, no deal!
For us, negotiating means: Finding what the other side wants, why they want it, and then helping them get it. It reminds me of something Zig Ziglar says: “You can get exactly what you want in life if you will just help enough other people get what they want.”
One of the biggest mistakes real estate investors make is failing to realize that no seller wants cash. This is worth repeating: NO SELLER WANTS CASH!
You’re probably scratching your head over this one. But think about it. Let’s say the seller wanted – and you gave – $50,000 cash for his house. The seller got exactly what he asked for – $50,000 cash! Next, you plastic wrap the cash to the seller’s kitchen table so that he can’t touch it. Is the seller happy?
You see, cash is just a conduit for the seller to use to get what he really wants. Maybe he really wants a new house, car, boat or vacation. But unless you ask the important questions, you will never know what the seller really wants and miss out on negotiating some seriously creative Win-Win deals that don’t involve cash.
Another common mistake we see investors make is not being curious enough – not asking enough questions, or failing to dig deep and probe. All too often, the investor spends the first fifteen minutes telling the seller all about himself. Truth is, the seller doesn’t give a hoot about you. The seller is only concerned about himself and his real estate problems. The focus should be on the seller right from the start, not you!
Think of it this way: When you go to the doctor, does the doctor spend the first fifteen minutes telling you all about herself – where she lives, what she drives, where she went to school? No way – she doesn’t have time for that! Usually, a doctor’s first question is, “Where does it hurt?” And that’s followed up by a lot more questions, right?
Remember: Negotiating is an art – it’s a learned thing. At the March 8 meeting of the North Georgia Real Estate Investors Association, our guest speakers will be Kim Cook and Jean Kramb. They will discuss how they find motivated sellers and negotiate Win-Win deals.
Bill and Kim’s North Georgia Real Estate Investors Association meets on the 2nd Thursday of each month, from 7 to 9 p.m., at the Hilton Garden Inn off Main Street in beautiful Cartersville, Georgia. For more info, go to NorthGeorgiaREIA.com.