CHA

23 Negotiating Techniquesto Get the BestDealPossible

llrlit:

,lli

You'vciust leimcd ofthe tivc most powerful "noahing-down" stratcgic$, Now you know thc kind ofclealsyou arc t.ying to stfllc. turc wlth $ellcni.'l'hatsaid,you.uc now (ctdy to lca(n about thc speclflc ncgotiatlngrechniquccyou need to liet sellcrsto particl pare in thcsedeals. In our frrst book, wc wcnt into dctail oD thc basic five'step sys. tcm you need to folbw when negotiatiDg with $cllers. Wc cdl thls the Inst,mt Olfer Syslem.What follovs is i summnty of those tivc sreps.l'hclr, after tl]e s nnnAry,we'll covcr 18 florc fleSotjttlfltl lrlst'dlt Oftcchniques that will hclp you finc tulrc aod go bcyond Ll.lc in order 1()get sellcrs to say,"Ycs!' to your crcative offcr. fer Systcm

The Fiye Steps of the Instant Offer System

Thc fivc stepsof our lnstant Offer S)'stem asfollows: are 1. Bulld. Rapport wlth the Seller If you want to get a grcat dealon a property, one ofthe most with lmportant rcquircrocdtsis to build :m emotlo|lel connectioD
l07

122

Mlking IJia \ion.y

lnvcstitrS itr Rcrl llrkt(

Notice the subtle diflereDce betwccn thcsc two ways of makyo$r offer'when you make a lbrmal offcr, ing havc given all '<)u conlrol over lhe deal to thc other party. Yoriyc madc an offer; they llct to s:ry ycs or no. Whcn y()u qualily your offer usinli thc "what iI" phrasing you aren't reilly making r formal offcr. Ye( once thc sellcr:rgrccs to your "wh.lt il'' offcr, thc scller has committed him. sclf to saying yes! Ihis is your way oI never fiakinlt xn offcr until the sellerhas xgreedto icccpt it. lhiokol-itinrhcfollowingw.y. Imaliineyou, the inves(or', r blscbrllpitchcr. As thc pilcher, rrc yor arc btally in control until tl)c nx)mcnt you throw thc birll. ()ncc you relcxscthc ball, who is i con(rol thcn?'l'hcbrttcr'.'lheselleris tllc bxlrcr who is wairing lbl you to pitcb thc bascball (thc 'bffcr"). Oncc y()u:ls thc pitchcr luvc thft)w|r thc ball, i.c., macieyour ol]tr, }()tl hxvc givcn xll contftt ovcf rhc ncxt sacpt() thc b:rttcr, i.c-, $cllcr. 'l hc b:rttct crn ciahcr choosc () liwiDS or nol- Yo( cuo oDly wxit and hopc \v)uldn't il bc nicc () bc xblc t() likc thr'()w thc pitch to scr if thc scllcr wxs l.ioing to swinB bclbrc yor.rcvcr rclcascd your ollcr? Ycs, wc know lhal is nol illk)wcd in bxscbilll, but n ,r_ xllowcd in in' l'hnl s (xltctly wh:rr r$ing whnt if' phrxsing &)c$ fi)r y()r. vcs(ing! It conrorits thc $cllcr to swiDg:rt yol|rollcr befi)rc y)u cvcr{)llcirlly it. ()nly whcn thc scllc. say$y(s t() your "whil il' ol-ltr, do you 'r)rkc nctullly mrkc it. Ifthc scllcrsilysno to your "whnt i1''oiler, yo si . ply movc on to irnothcr "whnl il'' olltf until you fin(l orc thxt thc sellcrsrys ycs to.'lhcn, you scc il-yoo c n put N dcrl togcthq b$c(l on this lcccPtible r'whnl i1." filld wc'vc wxtchccl huDdfcds ol iDvcstors ncqotirte dcals alDcl drxt almost all of lLem, cxccpt lhe n)ost sLlccessfuloncs, chase the deal in thc closing rtagcs ol thc nclioti;rtion.'lhis means that thcy givc .hc firrd powcr fo sny ycs or rro to:r deal over to thc scllcr. 'Ihcsc invesaors lerve the [cgotiiting tablc knowing that they've misscd out on drous.rodsof (bllffs in profits, but thcy do not know what thcy could havc donc diffcrcntly. Itut the pover of thc$c two seemingly innocent v/ords-'whnt iP-to work making you moncy.

3 / 2l Ncotintinsltchn4ucs ro cct rh( Bcsrl)c l l,orsiblc

12t

4. Make the Offcr I'hclr Idea

Have you cver hcard lhc exprcssion, 'Thc cook als/ays k)vcs his own cooking besr?" Wcll, the stme thiog is fruc in rc:rl cstatc. lfyou c:rn give owDership ol thc offcr ro thc sellcr, the scller will bc nruch nrorc conrnltted t() (hat specific offcr. And thi$ nreansyou'll hrvc l dcill that will stityclosc(|. It s cisier thaD you might think to nrxkc thc ofler the scllcr's idcr. llcrc's cxrctly how yoU &) it: Invcs(or: I don t know if we co(ld d() (his, bLrtwhat if wc wcrc:rblc to ptly yr,lr thc $1,8O0 pcr month, and al sontc poiDl during thc ncxt fivc ycxls conrplcrcly cl|.\h y()U()(t ofahc pn4)crty flt thc firll $2.{5,000 l)rice wc talkcdrhrough cnrlier.Is this s()fictbing thit \r()ul(l work for yot| or pr()blbly not? Scllcri I think th!t( w,uld work li)r mc. fnvcslor: Yl)rl lfurrt thxr would work lbr y(xtrrr y<r! knt t, thxl will w()rk lbr you? Scllcr: I kDow th:tt will worl lilr rc. lnvcstor: ()h. okxy. So if I m hcrring y()u riglr(, you wi|nl n)c to makc you nx)nthly paymcnts of $1,t100 pcr montlr tDcl t() cash yorl out al sonlc point within tlrc ncxt fivc yc;trs ilt the lirll t2.f5,O0O pricc. I)id I gcr rlrat riglrr? Scllcr: Ycs, you got that right. Scc how yorr, thc invcslor, werc rblc lr) nrikc ir rhe scllcr's ideaTAnd wc rll ko()w, wc gcDcrllly valuc our'()wn ideas more tlun othcr pcoplc's idcrs. Noticc nlso how you stjll conl inuc ro usc youl' kn()wlcdgc bout thc rcluct.tDt buycr right until rhc vcry cnd rr)d thc rrccnrcDt is linalizcd ()n prpcr.

)- PA

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il'lakj|l8lti8 Moncy lnvestinS ln Rctl E$tIc

You can even play out one more powerful technique hcre at the cnd to make surc the dcnl clo$cs highcr authority. lnvestor: Norv, Mr. Scller, I $,ant to make surc that belbrc I ask my paltnet to go donli witb this deal that you're sure this is a lit for you xnd you wanl to move forward. So F)u're abso' hr(cly sure tlrrl you fccl this is a wifl wi,r deal?Okxy, i[ that c:$e lct's put whirt wc'vc ius( agrccd k) dow on papcr. And now, you gt t() pull out youfxgreenrcnt aDd linish up thc detril work. lt's this dctail work llrat is thc subjccr ol our linil key b closing thc dcal.

5. tj$c thc "Two chair" closc to Lock Up thc Dcal

i Iow woulclyoo copc with thi$ silunlion? scllqfirgrcc Y(nrhld rL "whrt il'' olltr, you pullorlt yourllgrccnlcnt, you lill to y()ur sPokcl it io wilh tl)c scllcr,nnd (lrcn xt I hc vcry cnd jLrst bcforc hc siltnson (hc (,(tcd linc hc gcrs cold lcct. IIc stxr$ (o s:ry things likc, "Wh:rl if llrc root comcs crxshing in; arc you gointt to pny ,i)r thati' Or, .What i1'lhc ,rousing markcl colhpscs xl)d I havc to lin cck)sc oD thc P()pcrty l|nd il's {)nly worah 50 pcrccnt of it$ crrlicr vnluc? Or, ''Wh.rtif nry ncighbor'sdrughtcr's ,ruD('s psychictclls mc this iso'l n Sood dcrl?" Y()ur dcal is bcing 'whrt il'd" to dclthi' Ilcre is iLllcllcctivc trctic t() close lhc dciLlwhcn you nrc xt this poinl. It is Lhe simplest strxtcgy we cmploy. lt's crlled thc "two chair closc, Of coulsc, you renrcmber thlli chlldhood Snmc called mrLsicil chxinr wherc you and your fricnds woutd daDcc iuound a circlc ol' chairs thtt wlls jusl onc short ol thc numbcr of pcoplc circliflg around. Whcn the music stoppcd, )<)uwould all $cramblc for chair arcl the one left standing without a chair would be climinltcd. You s/ould rcmove a chair, str( ahe nusic, xnd bcgin drc next round. Vell, the "two chlir" closc rcscnrblcs lhis ltrme.

J / 23 NcSorirhdsTcchniqocs Ctl ro

lc ll(sr Dcal Posslblr

Al the cnd ofaDy ncgotiation, thc two parties involvcd ilways pliy out two rolcs, thc reluctlnt rolc and thc eagcr rol(. l he reluc. tant role is pliyed out by thc party who $tarts 1()question the dcal and who is beginning ao talk lhcmselves out of the dexl. IIc or she is xfraid ofmltking n bad dccisi()n aod $titrts to 8et scarcd. 'l'hc eagcr rolc is playcd by the pa(y who wants llr|3 dcal to stay cbscd and who tri6 to lalk lhc rcluctanl party into sticking k' the dcal- At rhc cklsing s(agcs, thc clgcr prrty in es$cn(c tlies to sell thc rel(ct:r ! Party ()n all (hc bcncfits of thc dcalKn()wing thlrt at tlrc cDd ol y(ntr ncgotintkln thcrc:trc thcsc rwo cnrpty ch:rirs,orc Dt rkcd "rchrttnt party":tnd lnlc nttrkcd .cxgcr pxrry, which chnir do you wtnt thc scllcr to sil in? ()f yorr wxnl lhenr l() sit iD lhc "ciulcr pirty" ch:li|', lhc only coursc, way to fiakc $urc thcv sit in (hc ctgcr ch:tir ar tl|C ck)sc ol (hc dsll is t() bcrt thcm rc rhc rcluctitnt ch:rir Y()u &, rhis try introdncinlt dollbl xnd c()rrccrn lhc vcry cnd t() lorc( ll)c tcilcr inlo thc cxgcr rt ()l sclling you on thc (lcxl. rolc l,c( $ wilk through :ln cxirmplc (rl how this works in the rcrl world. lnrxtiinc you h:rvc just liottcn {hc scllcr k).grcc tt) n livc-ycitr lcxsc opli(,r on tllcir housc ilt :t liLil pricc ltod liir nr()tlthly rcn(. Y()u know you cil|r nrilkc m(nrcy oD thc dc:tl ilnd witnt to orilkc surc i( st:ryscl()scd. Y(,u havc writtcn rp rhc dc:rl wiah (hc $cllcr, signcd ahc xgrccnrcDt yourscll, ilD(l D(rw tufll thc itgrccntcnt to thc scllcr Dd hxnd hinl thc pcn. llcrc is what you d() ncxli Invcstofl l.et's scct my nanrc gocs (k)wn hcr! ts buyer. Y(nrr nlmc gocs dowD herc as scllcr (hirDd them thc pen). I noticcd in thc living room i bit of watc. stain {)n thc cciliDS, ht|ve fixcd th:rt lcitk yet? ',ou Sellcr Oh sure, wc lixccl {.hat scvcralmonrhs ngo. lnvcslor: Oh, okay . . - Oet thc $ellcl contiluc t() rsrd fbr ahrce ao fivc sccro ds) llorv;tboul rl|c neighbors?'they don t lhrow t|ny loud pxrrics ) rhey? Sellcr: No, no thcy don't. l'hey'rc grclt (continues t() read fi)r threc to fivc scc(ntdr!).

t26

llaking Bi8MoncyI'rvcsring Ncrllsturc in Inv(stor: What about (hc wnler prc$$urc in the house? Is it stxble, or does it drop rldically whcn two pe()ple use thc bathroon at thc sl|nrc Limc? we think ]()u get thc idex.'Ihe longer thc scllct (akes (o sign thciI nrmc, thc nxrte polcntial Dcgativcs bring up. ln esscncc, -vou you arc gently introducing dorLblilr the scller'$ mind rhout yoLrstxying in (he dcal. This sparks :r fear ofloss in thc sellcr, aDd hc or she i ficdixtcly sits ilr that cagcr chnir.nd pushcs [orthc dcal to close. I)oes this work in evcry ilrstrncc? ()f corrrc not. Still, it is thc mosl cflective ch)sc wc hxvc cvcr used k) nrxkc sr|re lhc dcirl stavscloscd.

!'our Morc Sccrcts to Phrzrsing Your Offcr So thc Scller savs. "Yes"
1. ltlush Out thc Scllcr's Rc4, Dcadli[c to Scll
Ohvk)usly, you know wh(n thc s(llcr n(cds to sell, you hnvc il aD xdvar(x1tcin thc [cgotirrion. 'l hc thing is thrl nl:tny scllcrs \l()tr'l opcnly shxrc this cruciil piccc ()l inforDrllion with you. 'l-hxt you l(now l)ow to xsk li)r jl in tlrc rillhlwny. is, thcy w()n t r/r/lcss llcrc s h()w wc .c(tmrmcrrd you a!'k lor this inli)rni:rli(n. Wc cxll it tl)c 'Co l,on8' tcclrniquci l[vestor: Mr. Scllcr,whcn did you wxnt thc prop(rty han. dlcd by? six ororrths, l2 nrontJrs? Idcnlly, whcD w()uld yo! havc tbe pfi)perty hnndicd? Scllcr: I can't wxit thar long; l'm DrovinS in fivc wceks! Idcaily, | \rould hlvc h l ahc placc handlcd ycslcrday! 'l'his qucstion is alr ollshoot of thc "trkc awiy" phrx$iDli you Iexrncd carlier. I)1 csse cc, you nrc s:ryilllato thc sellcr, "Y r don'l nccd i quick solutidr riliht? You could wair lbr six rorths or evcD l2 n)onrhs xnd it wor dn r be any skiD off)'our back, right?' A moti.

3 / 23 }lesotiatlng'ltchnntucs

(o Gct rhc Eest Dcal Posiblc

t27

valed $eller is obviou$ly going to stafld up hcre and say they flced :r much quickcr solutiorl th4n that. Most motivated sellers :rre under thc 60{ay timer 'l'hey harve less than two monthli to sell or le4$c their property belbrc it cattses a maiorprol,lcm for thcm- Thc ck)$cr thcy come to their truc deadIine, the n}orc motiviltcd thcy beconre. Alwiys mike sure yor llush out why this dcadline is so impottirnt to tbc sellcl.'Ihis is yet nnodrcr way you arc buildinS their motivation. Invc5ror: when did you wrnt lhc propctty handlcd, six ol()nths?'fwdvc montbs? klcrlly whcn would you hrvc it hin dlcd? Sellcr: No, not thrt long. I wrDl il h:rndlcd in thc nexl lwo Irrvcstor: ()h. in thc ncxt two wccks. I'nr x littlc confu$td. Why is it importrnt to you to hxvc thc propcrty hxndlcd in thc ncxt tw() wccks? Scllcr: llccxusc I livc ,rbout cighl hours drivc to this placc, nlrd I took two wceks olfof work 1()clctLnit up iL d scll il. lnvcstor: Olr, bu( :rt lcnst it's no big dcul ifyotr nccd lo (nkc nrore timc olT work a,rd to drivc (bwn hcrc for anothcr wcck ol'two righrT Scllcr: Ycs, it is r big dcnl. I'nr going to gct this Plxcc sold iD lhc ncxt tw() weel(sDo lxl(er whatl Seehow you not onty flushcd out thc scllcr's timelinc, btrt you nlso go( dre $cllcr lo emolkm:dly ltcl his scnse of urgcocy ilnd moli' vatk)n.'l-hc more yor| do this, thc bcttcryourdcnl will gct. And findinll out thc seller"s "red" deadlile to sell i$ an iDrportrl1t part ol'd]e equation.

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iD MrkinB Dig l\,!onq lnvesLing lkrl llstnte

2, Gct Agrccment on the Concept, Then PIn Down thc Details

Always do your bcst to ltet the scllcrto agree to:r broad, vaguc offcr that oullines a gcneral concept, irnd work ftom that concept to l plogressivcly finer picturc ofrll the dc[ails. Invcslor: I wilnl to nrilkc surc I heard what you iurit told me .ight. So whnt you'rc rcally srying is th.rt you wxnt me to txke on thc responsibilily ol'(hc proPcrty so you don t havc to be r hndlord cvcl again, and you irst ltct n gualantccd nro|rthly pxynrcnt. Did | 8ct that riSht?" 5(llL.l Ye\ you lru.rr(l nlc riFlrl. Invcstor: Okry. Hnlrr. wcll. I do|r t know if I could (k) this, Mr. Scllcr, bur wh:rt il l could givc you it gu:rrxnlccd nl()nthlyprrymcnlIbr u pcriod ol limc nfi(ltukc cllrc ol lhc dry. t()<Lrynririntcnirncc. :lrrd lhcn at sonrc point down thc road I wcrc t() cl$h you ()ur ()f lhc propcrly. ts this sorrrcthiDg wc shoul(lspcnclrny tiDlc trlking xbout, or probrbly not? Scllcl: Ycs, wc should talk abol( it. I n)cur it's nol my litsl choicc, but likc I tdd you crrlicr I (knr't havc timc to bc x lxDdlord ilnynlorc. Wlrltt specific:llly did you hivc in mind? Scc how you got thc scllcr t() nSrce ('|r lhe gcncral conccpt of yr)u nritkiDg hinr i SunraDteedmoDthlypaynrcnt lorx Pcriod oftinrc rD(l thcn cn$hinghim ollt (bwn the rond. fhis dcscriptive stntc. nlcnl could bc dcscribing r lca$c oPtion, n subject t() purchasc, or cvcn an owncr-carry dcnl, WhcD you get alrc sellcr to xllrcc to thc aonccpt, llen and onb, then do yo]u|.tovc lo pin down the dctl to spccilic nuflrbers. Ifyou includ( all the outnlbersin your triltl 'wl)at il t)tTcr, lherc is too much inlbrnrrtion ahat tl)e scller might obicct to. Rlrbctterto introducc fcwer vnriables into tbe ncgotiating cquation ro hclp you dctcrmine whcre you need !{) spend time workin!: with lhe scllct, *'hcrc thc sellcr is unwilling t() go, and wherc the scllcr is happy to go-

dg J / 2J NcSorirri Trchniqu(i to c.t (hd Bcstl)caj Possrbl(

129

lnvestoc So if we wcre to makc )'ou monthly paymc'nts for siy livc or six ycffs and tlrcn cnsh you olrt tt thc $2!15,000pricc wc werc talkinS:lbout earlic( isthis somcthinli we should cvcn bothcr lo tNlk throrlgh, (rr nraybe not? Sellcr: Well, I don't know nbort Iivc or six ycnrs, but ycs ir \ r(,m( rlri,rS\c .lx)ulLltrlk .rbout. Invcstor: ()h, you tell me. Whnt's thc l()ngest period of time )ou'd l)c willing lo go kn()wing thtlt I nrxy very wtll cnsh vou oul cxrlier if I can scll at r prolit earlier :rnd knowing tlr$ thc longcf you give lrlc thc morc willinS, I anl lo ltct closcr to price? thxr $245,0O0 scllcr wcll, I miliht bc willin8 to llo ns k)ng xs th.cc r)r fou( ycirrsInvcstof:Oir, four or fivc yclrs is (hc most you'd lrc willing l() go7 (You just u$cd (hc llxDlic'fcchniquc whiclr yr)ull lcirn xbo(t in :r nDnrcnt.) Scllcr: Ycrh, I gucss I could go as knrg xs livc yclrs.

3. Ask Thcm Why I'hcy l'hink thc Dcal ls a lit

Onc powcrfut wxy t() build thc olhcr sidc's n[livalion t() do lhc dcrl i$ io siDply rsL tl)cm why thcy said ycs to son)clhing. (:oDlinuing oD with ah carlicr Dcg{)tinti{)n: lnvcstori So il wc wcrc ablc lo nrrke you oronthly p:rymcnts foftrt nrost Iivc yeirN irnd thcn c:Lshyou out at $240,0O0 or $245.000, wbich I'nr not surc we could do, bua il wc c.(tuld do that, would it work lbr you, or probarblynot? Scllcr': ycrr,tllat would work lbr nre. Invcstor: ()h, okry- Tcll mc, why clo you llcl dris is il fit for you? Sellcr: l]ecause a! lcnst I don't hxvc to bc a Imdl()rd evcr ;rgain. Yes, I couid flake more moncy each month if I rerted it out mysclf, but then I'd h:rve to (leal with rennnts. Plus, I get

130

Mxting Bi8lnDcy Inrclli.g lr R(al[slrrt tl|c txx dcductkm lronl s(:tying oD rirlc. lt may noa bc idcal, bot it srrre s()rnds good tr) Ine nller thc lxst fc*, nr(r hs hnviDli to do lhrt cviction and thcn clciln up rhis placc. Nolicc thltt when y()t rskcd lhe scller why hc fclt it wils x flt lin hinr, you put rhc scllcr o thc spot to justify his yc$ dccision. 'l'his lxps iDlo thc power ofc()Dsis(cDcywhich srys thitt pcoplc will tt'()lo 8rc.rt lcngtlrs to nrxkc r(rc thcy ind orhcr pcoplc pcrccive thc r l() bc xcling consistcnrly with rhcirpasr acriorrs. Whcn scllcrs :rrcrirliinrrlizingthcir yesdccisi(nt, thcy xft publicly rlliroling thcir dccisi()D d() (llc dcll- 'l llis, in rrrrn,nritkcs cven nr{)rcinrportitnt k) it li)f thcrrll() rctnxin c()nsist(ot lrrl(lIinnlizr th( (lcxl,Sc( h()w y()uurc lrycring irl ,rro(hcr l(vcl lr)w:t[drk)sing I pr.()li(xblc dclll.

/r, Play Dumb

ln rnv |lqoti:rlion. rhcrc rc tw() pux)ft!, x psychl)l()gicxl l):ry. ()11 irxl x ti||rncirl pry()fl. llxrcly cxn y()nhxvc both. Wltich ()Dc(k, )(ru wl|nt? l)() you wlnt l(, hc llrc cxpcrt:urd ulic tll kinds {)1,:tnc} rcirl (stltc t(rmin(,|()gyr() intpfcss th( scllcr rn(l tccl rcxlly g(x)d xb()u(y()ul-scll-lh(psy(hi)k)gictlp:ry()11-or. yr)u willinB r() tel iu.c llrc scllcr icll Itc is smxrtcr thnn you rrc itr(l tlcl in c()ntr(Jl rhc i cxchxDgcin ()rdcrlbr yol| (o nrxkc:tlilit prolit-lhc linlrcixl pny()t-t ? wc dorr't know xbour you, bui wc rc surc williog l() pxy thr scllcr in psych()k,gict|ldolkrti llny d:ry of thc wcck :ts l(nr8 its wc rc tftding li)r rcal dollani io rcrurn. l riginc y()u wcie thc scllcr. lf you wcrc bciDlt rortlly h()ncst, rvolrld y()u rxthcrscllto an invcstor whom y()u felt wxs $nralrtcrth:tn you, or woul(l yorr llther scll lo nn iovestor yoll tre!,you wcre sr irrlcr thin? Wc w()n l :tsk you rc sh()ut your answcr t{) thc w()r.ld, bul il you rc likc lnosr pcoplc, you prob^bly would rathcr scll t() lln iDrcstur who wxs dunrbcr thitD vou. Wiry? If ahe invcsk)r w(re sorxrtcr (lrrn you, you would hrvc b worry abour tlcrring rikcn rdlxDtlltc ol Aur il you fc{l smi(cr rltrn the in}cstor, rhis puts you xt cisc :rnd belps you lecl conlidcnt. Arcn t you, or any scllcr lbr

3/ 2J NcSotillin8'llchntqucs to Gct thc BcsrDcrlPosslhlc

lJl

that matler, morc likely to m:lke r decision to move forward wilh r dcal if you llre relaxcd a,rd ftclin[i Sood about yoursclfl Of coursc you are more willing to sny yes to the deal. Ibw, as an invcstor, do you play dumb? You movc thc conver' s:r(ion:rlong by asking questbns. You let thc sellertcll y()u thc fa!_ts rnd figures. And you .reucr, erer tty K, imptcss the scller with display$ offancy tcrmin(,logy and Sencral "know'it'all'ncss." lf yor do nced to iniccr r fhct, tfse fxfrguuticlike, I u'as talking tith lhis rcal csk c broket n.I hc blal wc lhdt iI s cttslom.try Jbt lhe scller k) the ti e insut tr,'cc ll)llcl ut ckrsitrg." Pdll,r 'l'wo Iinxl wrys t() "plirydonrb."liinrt,trlk slow rnd prusc n k)t. Mosl bcginning invcstors who nrcct wi(h scllcrs xrc ncrv()lrs. lr d l)ciDg ncr vous they tcnd to rrcc nhcildwirlr thcir pacc of spccch, h)sing lhc scllcr froDr thc start, 'l he scller won'l ask you lo skrw down, he'll simply bc conli$cd rnd shut dowo- Don'l lct this hrppcn t() you. lnstcxd, pncc your$cll likc frcquent pauscs li)r:r dctjl) brc:rth. /lsk a fricnd () go wi(h you oD an irppointmcnr or two l() scc if from thc outsidc thcy noticc you g(ring s() fast thxt y(nt kNc lhc scllcr, (,r il y{rur p.lcin8 is slow cnough t() hclp thc scllcr ltcl comlbrtrblc. Sc(o|ld. nrrkc surc you do 4// nxth sk)wly rnd stcp by srcp. Look llt rllc lblbwing cxir tplc: I'rvcs(n: Lcl'ri scc herc, yolr hnd thc propcrty lislcd rt $20O,OO0 for tcw nrontbs. What Derccnt would thc rcil cslltc agcnt h:rvc lloltcrr lhcr? Scller: 6 pcnccnt. lnvcsaor:()h, so lct's scc, 6 perccDt of$ t 00,O0Ois 56,000. So ifyou hrd a pricc ofi2U),OOO, thc r..al csti(e a8cnt coNnris. si{)o would lrnvc becn 56,000 plus $6,000.'l'bat's $12,{)00 in ctonmission. Did I gct that right? Scller: Ycs. lDvestori Okay, so $20O,O00 miDus the $12,000 q/ould luve ncanl you would lr1lveg,otlen $l8tt,Oo0, if y(\t g()t a fullPriccd ofTcr with the r c. esta(ergent. Did I do thc math right? Somctimcs I get the numbsrs mixed up.

laz

MrkinU ltig llon(y Irvcsting id Rerl Sslnt(

'l his mxy secm unneccssary to you, cspccially if you rre a wbiz with mrrlh. but wc have ol)scrvc(l thirl most scllcrs gct ferl nervolrs when you talk about nuorber$.Mitybe thcy arc rcn)enrbering back to elcne)rtrr,{ school and h.lving 10 pclform nth on thc bhckboaftl in lionl of thc !r4n)lc class-:rnd m:rking r nri$trke- ()r mxybe thev jnst arcu't good with numbcrs. l hc best l\,xy to makc thenr ltel coll)lbrtablc is to t:rlk thcm through tirc nuorbcls vcry sl()wly-l)l)n't b[iD!! in a fr)rcy cxlcLrhlor. Il thc srllcr ollcrs t(] kn(l you .t calcLrlltor st-!, Crcirt, bul I'or rx)t t(xr Bood with thcse things. (jin y(xr lrh nrc (,ut lllr(l ligure this out wilh lne?"1|)c wLLlk thcnr through cxxctl), wh:tt k) punch in lhr cxl(uhtor, ard lcl tlrcDrgi\,( you rll thc rn(ixn s\rvcl.s. y()Lr l()w mLrchbcttcr lhis will m e thc scll(r lecl? scc 'l-his is l vcry di!fcrcnl appl():rch lionr tu()stinvest()rs\rho wrlk int() lh( living r(ronrwith tllcir luncv rcvcrsc k)!tic, turbo.clrxrgcd crlcuhl(ns llrrl thcv usc (o wltil) our itoror(izittiu)chirls gllr bc li)rc tlt( sellrt s cycs. llcorcnrbcr, tlrr."( irrvcskn-sxrc nr:lkiDg tltcnr sclvcsl(xr( g(xxt irt thc cxl)sose()l lhc scllcr. ll is x tlxntsl,rd tiorcs lll()rc inrpoft:rntlix lhc icllcr t() lccl sDrxrttltxn it is li)l y()u,thxt is, il yonr rcal goll is lo ntrkc Droncy. pky dLrl l)l So N()t onlv will atnrakcthc s(llcrs lccl nr)rc rlnrlbr(rblc, l)ui il will als()gcl thc scllcls 1()bc rn()rcwillilrlt l() l)clp y(xr in (hc tlc!,() lixtidr. l his, in turtl, \l,ill r:riscthc scllcrs scll:cstccnr givc thcrn l() () I lccljng ol bcing io conlrol. nILIiingthclll rx)rc likcly t() clcci(lc scll lo y()u.ll will:rlso inv()lvcrhc scllcrsi thc wholc ncgorixrion ploccss ts c(tlaborxtofstitthct lhxD ns conlpctjtofs.

'fhrcc Surcflrc Techliqucs to Gct thc Itest Price

Whcn il coDrcs to pricc, n):tnv i vcrtoN hxvc lroublc getling llie scll(r to colne d()\\,n l \1rLy in that s(ill kc(ps both pllrlics facling good:rl)out fhc oegotiation. ltcmcmbcr. 1()I,ct sellcls a()parficipule in thc lirrncing, which is thc kcy cirmnr()n clcronrinxtorin xll l,Lrr'

3123 Ncaotilrina ltchnigucs to Gct thc ll6t Drll PossiDlc

ta3

chasc Option dsnls, you nccd 1o maintain rappofi throughout thc cnlirc negotixtion. Bully tnctics ol banging thc sellcr ovcr thc bead witl all thc rL?airs )'ou will nccd to do. thc hiSh co$t ofclosing, aod thc rjncr.ll lick ofappcal ofthcir honrc mi8hl work ifyou wrc Detl()tiatingan :llkllsh olfcr, but it is not the hcst wxy !o Lct thc scllcr() be flcxiblc on tctmlj. llerc ittc lhrcc surefifc tcchriqres that you c?n Llsc to $ofterr the scllcr !rp with rcspcct to their a$king pricc li,r the prop. crty,'l'hey work bcsl whcn yo! nsc thesc thrcc techni(ltlcs in ttrnr, onc right allcr thc ollrcr. Wc'll I,ivc y()u 1ln exxmplc ol whll (llcy s'ound like in { negotiition, thcn wc'll tio bick through cach 1)l lhc (lucc tcchnklucs glvirut you insidcr tips l() makc them nrorc cll(c. livc lor you, lnvcsaor: \vhxr wns it y()u rvcrc skirrg for thc proP(rly xg:ain? Scllcr: l'nl nskinB $35O,{)0O thc propcrty. for ()h, ilnd whitl {itl yo\ rcalisllc.tll! (xpcc( () llc( Invcs(or: lbr it? ('lcchDktuc#l) scllcr: llcrlis(icrlly, I think I ll gct:rr lc$t SJ:t5,000ro

$:t,t0.o0o.
lnvc$(or:()kxy, $o you rcxlisticrlly cxpcct t() llct xrolrnd tr) or #2) Okiry,th:rt SJ30,000 $1J5,00(), so . . . ('lcchni(tuc r)rnkeli sclsc to nrc. ILDnr. li a rcal cstnteagcnl cirnrcin lrstc ri8ht now with:r scri(nrs l)(ycr who was willing lo givc y()rl thrt l ll $3J0,(x)0, so,you'dprobnbly or turn thrt dowr huh? ('Icclrlriquc#.J) Sellcr| rt this pointI'd ptobnbly tikc it iustio bc (knrc No, wirh ir. lnvcstor:Surc, I undcrstand.Lcas see, 6 pcrccnt ol $33o,ooois . . . Iling on x second,it's bccD a long day fi)r nrc: is 6 pe(cn. of S100,{)u)i! $6,U)O,so 6 pcrcent of S300,{X)0 (Notice $ l8,Oo0;. . . ind thcn 6 perccritof $3o,o00is hmm. . . you'rc pllryiqi dumb iSaio ind doing lhc rnath very sklwly-)

tJ4

MakiDg8ig ]toncy rnvcstingin l{c!l Eslarc

Seller: Ihat's $1,80O. Invc$tor: Oh, thankr. Let's sec, $18,000 plus $ 1,800 is just about $20,000 of commission. Okay, so bottom linc you'd be gcltinli $310,000 out ol it. Okiry, thnt makcs sense. l)id you noticc how comfbrtxblc it ltlt lo take the scllcr's askaDd turn it into S310,000?You didrr't havc to ing price of $350,O0O in kick, club, or scrcn'ri.You sinply us(l thesc tLrec teclr,riqucs turn t() gct thc sellcr's pricc $40,OO0l()wer Lct's tio throutih dlch lccllniquc in lhc ordcr thrt you will bc using lhem.

llcst I'ricc 'l'cchnlquc Ooc: "Wha( Re..llstlc.tll! F,xpcct to Get?"

Did You

L(x)k ;rt thc scllcr with thxl insidcr glint in your cyc lh:rt s,rys, "llcy, comc on now. Wc both know tl)al you nright bc askir)l.i $J5o,{)Ooli)r thc propcrly, b!|t you &nr't rc:rlly cxpcct ro gct rhnr nlLrchrlo you?"'Ihis (lucsti()nwill usuilly gcl thc pricc d()wn by 3 pcrccnt &) 10 Pcfccn(. Whxt hnppc'rsif thc scllcr (locsD'tcorrc dowi xt nll?At lllis point you d()n't fight with hinr ()r hcr nbouait. You hr\,cn'( k)st xnythiog by nsking,alrd you slill luvc two rnolc tcchtriqlcs to usc.

Bcst Pricc Techniquc I'wo: Thc Ra[gc Tcchnique

-l'urn wlxtvcr the lowcst [umbcf the scllcrgivcs to you xbout thc pricc iol{) n ranllc with thcir nlnrbcr rs thc high cnd of thc ran8c. ll'rhc sellcr doesn'r obicct, hc h:ls,usl icccptcd the low end ofthe rangc {s the ncw point from which yolr rvill Drgotirte. ID our cxrmplc:rbovc, wc xskcd lhc scllcr, "So you rsdisticnlly cxpect 1o gct around $310,000 to $al5,OO0, or so? " 'lhis is a qucstion. but not o'1c you wanl to have thc scllcf answer. You simply slaac the

I / 21 Nr8ori.rinF ltchniqu(s to cct LI|eUrs( lJsl Possrblc

135

question, nodding your hcad up and down, ycs, thcn move on to your next question a few scconds Intcr, Bccausc you &)n1 want the sellcr to obiect, y()u ir6t do 't give rhenr much tinc io which to voicc thcir objection. It's importxnt hcre t() ood yo(rhcad up and down:rnd give ()ut itll the nonverbil cucs that you llrc agrccing with llre scllcr cven thouSh you xrc subtly chitDl3iDgthcir ltnswcr io :t wily rhxl fits lbr you. As for lhc rimgc t{) usc, lhis will dq)cnd ()n y()ur l()cnl rexl cstxtc n)arkct.lfyou irrc in l slow nr rkct, bc xSlires$ivcin y{r rch{)icc ()l opcning rxngcs. Il you llrc itrvcsting in :. hor mtrkct, usc sDtllcr oPcning r:rngc. lf lhc $cucr doc$ objcct lo your rrhge and sayssonlctlting likc, "No, nol 1i330,000to $340,000 brr $315,000 ro $140,(X)0," yorl rc$pond:r$ lbllows: 'Oh, $J.J.t,O00ro $:t35,0{)0. Okry." No(icc y()u h{vc iusashrunk thc rirnLc you usc in rcsponsc to thc scllcr's ()bicc liur. l his lcts you tcst rhc wxtcr aDd IiDd or( whcr(, tltc sctlcr's rcxl linri(s xfij. Y()$ ciln shrink t(,rtr ritngc two or thrcc timcs until y()rr liDd lhc poiDr thnt thc scllcr is c()mfortitblc with.

llcst lrrlcc 'l'cchnlquc 'l'h rcc: Introducc a Ilctltlous Suycf through a ltcal l]{itatc Agcnt to Hclp Knock 3 P(rccnl to 6 |tcrccnt Off thc t ricc
This onc is scll-cvidcnt. lt thc rcllcr w{}uld xcccpl :rD olTcr through i real cstatc ilgcnt, hc would h:lve t() pay thc c{)onnission t() thc rcal cstarc agent. So, i csscncc, he is slyinS the price would be lowcrby 3 pcrcent t() 6 pclccnt to covcr the coDDlission. Son]c sell crs will point out that they would be willing !o pl|y for x buycr's 18,cntcomD,issi{)nbut not lbr { listing comNissio[, ln dtis casc, thcy xrc saying that they arc williDg t() knock 3 pcrcenl ofr'tlrc purchas Dfice.

13 6

Mrking lJls Moncy hvcstjng iu Rc!l lls(rtc

'l wo key P()ints with Lhis tcchnique rte lbr you to use the ncg. shown in the cxample and to make $ure you do thc ativc phansinga.s math $lowly to ensure thc sellcr leelr comfortable witl'! thc final So whcn )'ou ve uscd thc$c drrec tcchniques to talk the scller's pricc trom S35O,O00 down lo $J10,{)0O,does rhis nrxke S:ll0,U)0 thc linll price? No, it sinlply mcans tha( $31O,0O0 thc slxrtintl is ofwhit thc scllcr wirnts. If you xrc writing notes on i scriltch Point pxd iD fronl of thc scllr, ft) rot writc any Drnrrbcr(bwn ,,nrr7 yorl ltct ti) (his numbcr. Thcn whcn you writc this nuntbcf down, yo irrc lcSilinrizing it rs tlle 'top &tlxr" pricc. Dcpcnding on thc tcrnrs yolr ncgotiillcjy()u |r1ay go:rhcnd tnd givc drc sellcf this ()p dollnr ()r F)u migh( fccl thirt y{)u still [cc(l t() ncgotilltc thir, k)wcr. Pricc, Al (hc vcry lcist, you hxvc jusl lc{lncd how to sinrplyrnd ct$ily gct lhc pricc d()wn by lrl lcrNt lJ pcrccnl (() lO pcrccna or morc ft()nr thc (,ri8inulxsking pricc-

'l'hc Fbur Most Common scllr Obicctions and IIow to Handle l'hcm
Sclfcr Obic.ction O'rcj lVhdt's Y.t.,r.Prograrr,?
Whilc lhis iSht not $ccnr likc xn objcc(ion, it is ll subtlc onc. What ihc scller is rcrlly saying is, '(--onrcon, Mr. Invcsr()r, tcll mc what you crD offcr mc so I cnD nr:rkc I slr:|p dccision il l $hould spcnd rDy linrc with you ()r not," llcr's cxactly how you sltould nnswcr thi$ qucstion: Pft)granr?I {lon t hxvc r program. I guess my pft}8rnm is rc nrc! with propcrry owncrs and talk with thcm. If I c,tn buy lbcir property in a wny thcy fcl is a lit itnd I fccl I cxn turn a ptofit on it thcn I buy it. If not, thcn I don't buy it. Do I necd to bavc a fancy progritm to buy thilr propcrly?

ltclniqucs ro Gct rhc ncsr Dcal t ossiblr l / 2l NcSotiatinS

ta7

Sce how you arc relirminli the ncgotilltion in a way thrt thc scllea knows you ffe thcre t() listcn to their mceds:lfld to see if you ctn both mect their,rccds lnd nrrke ll prolit too.'l'hiswill go x lonli wxy lo ltctting thc scller to ll.ork rzirl, you radrer thin ag:rinst you in (hc neSotialion.

Scllcr Obrcctlon 'lwot Are You .. Raol Eslate Age r?

A8:rin, dris one migbt not sound likc an objection, but in most ca$csit is. lhis obicctior typicxlly (onre$ when you cxll up thc scllcr on thc tclcphone. Y()n scc, nrcst scllcrs who rrc sellinS l:or Salc lly ()wncr 8et fk)odcd by c.rlls lrun) r{lcnts k)okinli t() list thc ptopefty.'fhesc scllcr's quickly lcrrn thc (r'1ly dclcnsc to th(sc crlls is t() quicklv scrccn ()ut thc calls Iionr xgcnts lionr thc crll$ fronr ciir'cctbuycrs. Scllcrs t,)ilrk i,T thcsc concrctc rcrms. (:xllcrs :rrc labclcd ciahcr "buycnr" ()r''xltcD(li " M()st scllsfs sinrply (k]|l't h;rvc olhcr cilcllorics lbr l)copl( who cltll xbollt tllcir propcr ly. Y()uDccd to orakc surc you cnd up iD thc buycr cttcti()ry. li(c xre not sayi0g thrt rcrl cstrtc lgcnts rfc'r'l provi(linll N grcirt scrvicc out lbcrc.'l-hcy ovcrwhclnringly irc. It's iust n pcrccp' tioD thrl nlxny scllcrs havc, llcDrcmbcr, r(al cstirtc rl.lc'rls irc t l.llclt rcsourcc lor any scrious invcsa()rto axp into. l]) 's why, in ()rrrIinit book, wc detxiled how yolr cat) cffcctivcly work wjflt rcitl estrtc agcDlslo y()rrrDrmuxl bcnclil. As nn iDvcstor, you nced t() nrlkc srrc you don'l gct sorted into this 'out" brskcl ak[8 with thc.lgcDls. 'lhc singlc nrost cfltctivc wuy to respond to this obicct.i()n is (() siotply !Dswcr as lbllows: Scllef: Arc ),ou a real cstate ltgent? Invcstor: No, do I nced to be? (Said tioridly as ifyou wcrc : raid the sellcr werc oot li,oing to sell to y()u unlcss you *,erc nn agent.)

r3rl

Mnkin8lliS trkrrcy lnvcsting ir llcalEsiltc

Scller No, no you don'l birve t() bc. Il's just that I keep get_ ting xll thcse calls frcm real estatc agcots iryirrg to get a listing on tl)is bouse, x,rd I' gettih{an bit tired ()1it, thxfs all. 'lllis resloDse instantly refirmcs thc scllcr's ltbel ofyou.tnd puls vou in the Prcfcrrcd cxtegoty oI"buyer" Wh:lt ifyou:rrc ll rcal You l|nliwcr lhc sellcr's q[cstjon as litlowsl cstirlc :rgcDt? lDvcstor (who in tlris cirse has x tcal cstxtc licctrse)r Actu. xlly, I nm xn agcrlt, bnt I rvirs iDlercstcd in maybc buyinli this l)f()Pcrty ns an invcsl,neDl.Y()u Drobxbly would Dcvc, cvcn ()nsidcr iln ollcr fronr :ln invcstor, cvcn if it was aD :rtlrxctivc ollcr, $()uld you? ()l ,\gxin, yo nccd 1()quickly get ()r.rl rhc rgcDt cllcl:ory and licl thc scllcr to Pcrccivc y()u :rs il brrycr,

Scllcr Obicction 'l'hrcc: 'l'hc Attomcy Obicction

'l'his objcctior tcnds to bc thc onc ilrvcstors d,-cr(l thc nrost. 'l-hcy know llr:|t nriny i(tr)r Dcyswill kill xrry (lcxl lhat is crcrtivc nrrd thc rronstrrdard. ll you ncg,otiitcd r l)urchasc OPtioll dcal 1tncl scllcr t;tkcs rhc papcrwork to thcir xrtorrrcy, nr:rDyut(()rneys will li.ill(hc (lcalsi,r)plybccrusc thcy ltfcn't rcxl lamilinr with nonst1lnd ard fclrl cstatc lfirnsnctions. IIcrc is llrc most eltcctivc wiry $,c brvc li)uod to dcnl with thc ilttorncy objecti()n. 'l'his ft'sp()nsc co'ncs in threc stePs: Stcp One. vnlidatc the scllcr's choicc to hxve thcir a(tomcy chcck tlrinl!{ over an(l n)xtch thcir nccd tr) do thcir due diligcDce. Sellcr: I ll nced to ru|l this by my rltorDcy. Investor: ()f.'ourse you r('ill.'l'hat makes !!ood scnsc. ( ftis v.lidatcs their need to ralk wirh lheir attorney.) I rlso nccd to

J/ .2t:lcaoriat'trgltchnlqucsto Ccr rlrc BcstDl Po$'hlc

tf9

do my duc dili8cnce. I hlvc to chcck on thc propcrty valucs and to double{hcck R) mxkc $ure you:rrc on tiale and all (hat. (This matchcs thcir Dccd qith your nced to bc prudcnt and do their due dilige cc.) Step'l'wo. Pncc their nttorney's rcirction so you progranr thc scllcr to say ycs evcD il thcir rttorncy sirysDo, lnvc$(or: lfut bcf(xc you $pcnd tl)c $.i00 to 500 to llnvc yourittorncy chcck thisovcr (yo[ irrcpoi|rlinS our thrt it woD't bc licc to gct thcir il(lor'ncy's opiDiur-ii will havc.r hcfiy pricc ti8), I wrni t() nri*c srrrc thlt you'rc spcnding your nroncy wcll. I ciln guafilntcc you lhll your i|ltorrrcy is not going 1()likc thc fxct lhlt you ilrc rgrccinlt to thc price up fr()Irl rrt todrry s vahc,rrrd Dot ch rging sI It|lurc valuc. I lc's goin8,t() kick rod scrcxm nnd nrxyl)c cvcn th()w { fcw books:rcross thc roonr. (Y)u rrc wdkiDg thcnl tlrftru8,hhow thciratbnrcy firighr rcirct. ()l-c(,urtc, no rcxl xt()rncy will cvcr rcilc( (luilc so strongly. S() il won'l bc rs big ol :r dcrl il thcir rtlorDcy has a strong slrtcmcnt or lwo:rb()Ut thc dcil.) N()w, you u[dcrst:rnd th:l( wc [ccd to bc rblc lo h:rvc lhc optioD t() buy xt thc pricc wc igrccd ot bcciusc lls invcs(oni wc hxve t(, mrkc il prolit or wc crrr'( do thc dca!.Now, ifwhcD youf iLtlorncy hasr tit :lboul this, which hc will, you'rc not Boing to wrnt to nr()ve f()rwaftl wirh this dcxl, rhcn I wrnt to silvcyo tlrc $400 or $500 thil y()uf aLttofncy is going tr) chnqic y()u, nrrd wc cn|l iust cxnccl lbis irBrcc. mcnt right oow. What should wc do? Should wc calrccl l.his dciLl right now or slDuld wc kccp moving forwird? Sellcr: Oh no, lct'$ kccp moving forw;rrd widr rhis. I ir$a would flcl betrcr to have my altorney t,.rkea look nt the pnperwork wlren wc'[c done, that'$ xll. h thc cxamplc above, wtj wcre talking ab()ut a lcase opti()n dcal. If we wcrc talking about buying lhe prupcray srbiect to thc ex.

140

]!':rkinBBig l,loDcyInvcsting in Rcallisrate

"You'rc attomey is Soing to islioli financing you might inslead sa.v, your lorn in fhce for a while. Iirt hile die filct lhat wc're lcrving ]'ou undcrstand thal onc ol drc rcasonswe'rc willingto make up thc fbur bxck pnymcnl.sxnd lake ovcr thc monthly payment is bccausc of(hc lo$, intcrest r:rtc lollo you hxvc in pl:rce. If we hxd to bri S in our ()wn k)rn, we would not gct snch a g()od inlcrest rale Ph$ wc'd h:rvc about lt.1,000in lorD costs. l'h:lt wolld kill thc dcrrl for us." Step 'l hrcc. Sjgn upthc dc^l s!.tbjecllo their irttorncy's

'l hc linal thing you nccd k) do is () siSn up thc (lcal subiccl to" tlrcir'llltorney'$rcvicw IIclc is how (l1cclrusc sholrl(lrcx(ll 'I hls agt'eenetrl ls sublecl lo scller's u.tbr ay's rculcllt. In lhe (uerlt lhal scllcr's atlk)t'rrc_l' utunts k) catnarl lhis 48rec menL sel[et s ctlkrt c.ym(ly c.utccl Lhis qreentcnl b.l Sioing &rill,cn ,lolicc k) . ]n crc l lhul utrille
,tolit.' lt' (4rrccl ir n't liu?tr by 5 t'M tr!

lIrcn lhls ugrccmenl sh.lll tcnai

ln.lullJbrcc .!.n.1c./Jecl.

Noticc lhat you makc this clxusc rcrd thal thc scllcr hns dccklcd t():rcccpt ahc oll-cr xnd nru$t takc il dcliDitc stcp withi ir limitcd pcriod of tin)c to cxnccl (hc dcnl. I'his drlnrllicxlly incrcascs thc ocldslhxt yorf lrxve ir Llclrlbcci\rrsclnarclio, o[ lhcir part rcsLrlts iD x pcrnr;rnent dcill.

'lk

wr_vI fucl xbout it is lllat iflhc scllcr isn t willing to siLr up the dcxl \*,ith lLe right to c:tnccl ilicr tilking with thcir rttorncy, thcn they probrbly don't wml to &) the dcrl. I would r.rtircr know this up ltont beforc I invcst nny m()[c of my timc wilh thcnr. I lct thcm givc mc lotice by f:rxing mc a slrort leltsr. lhis makcs them llel

3 / 2J N.Sotiatins tcchdqrcs

ro Gct fte lt.sr Dl lbssiblc

t4l

nrore comfortable it won't be too hardfbr thcmto cancel that il' dreywantt(),but it still rcquircs thatthey(lo it in writing. r

Sellcr Obicction Fouft Thc Scller Wants a Large Down Paymcnt

Nothing will flrin your (lAy lnlitcr thiu sellcrs who insist (hrt y()u nccd (o p:ry thcnr a d()wn prynrcnl. Now, s(,nrc sclleni wor'r'( bud8c ftom lDis, and thcrc i$ nothing you crn do. lipicnlly, thcsc $cllcrs irst arcn a nx,tivatcd to scll (lrickly. Rrlt nx)st modvatc(l scll' crs:r.c willing to lt&c tl kx lc:ii moncy up front lhan they initially arskfor, IIclrj irrc two wxys to hilndlc this objcction.'1hc first is uscd whcD yr)u :1rcncgolilting I lcxsc olr(ion, Scllcr:I nl willinS t()(b this livc-ycxrlciNc()ptiur, but l'nl goinS t(' nc(d :r d()wn pxynrcot ()f $l{),OU) t() do i(. lDvcstor: I undcl-rilirndtlrat you nccd $onrc moncy lrp li()||t so tl t you crD llcl sccurc in thi$ dcxl,'l'hxt sccms rcl|"\onltblc tr) llrc. ll you wcrc iusl rcntiDgou( this propclty, whxt w()ukl you collccl rs I sccurity dcposit? Scllcr I d (r)llcct xt lcxsr 5l,4OO rs x hsl nronrh's rcnl. Invcslor: Oh, thilt much. Wcll, if I could l:rlk my par(ncr into il, wh:rt ifl wcrc t() givc you $2,t100 li()nt.'fh 's r Irll up nlo[lh's rcnt plus x hclty sccurity dcposit. Scllcr: l'd nr()rc tluD thar. 'rccd Invesfor: Oh. Wcll, again my p:l(tncr miSht kill mc lbr ol: Itring this nruch, bur what if we Bavc'you S3,40O up fiont. Thnt's { full mon$'s re|lt and a $2,00(] security dcposit. I kn()w that's not ideal for you but I'm bcndinS as farrs I can. Would you bc willing to bcnd n litde hcre !x)? Scllcr: Surc, I gucss thnt would be okay with nlc.

r42

lunkinSUiS ltoncy ltrrrsting in RcalEstrtc

Your response refrained thc selle.'s request for down payment into then) sharing wjth you thcir necd to fccl secure in lhe deal. lrom herc, it w:rs,ust a short hop to talking about a security deposil. l{cmembcr, il you |ue t{lking with thc sellcr about down pirymeDls yorr can only lose. convention say$th:rt down Paynrnts by invcslors itte bctween I0 perccnt () 20 pcrcent. You nced to shif( thc convcrsatiorr to sccurily dq)osits wherc convcntion says you (Jrly ncc(l Lo Sivc the scllcr % to l/, prccnt qp front.'l'his is why wc strcss thaa you nccd to cootrol l|ow you Lrbcl thc vari(xrs Prrts in thc ncgotirtbn. Usc the sccood $,ay whcn you xLrc nego(i:rting itny other lype ol-oer'ner'carry dcxl. Scllcr: l n) willing &) qrrry birck thc ljnnncinS ll5 bnla:rs yo( llivc nrc l0 Pc.ccnl down which is Xi20,000. Invcstofl | uDdcrstnDdyour nccd t() Lct :r hcnlthy chunl of moncy up lioDt to nrai(c$ulc you lccl sccutc in thc dcal, lJut to bc lcurk, silly xs it sccms, I crn :rclrnlly buy four or fivc lro(Ncs wilh thc sxmc !i20,000. I'nl willing to givc you iL chunk ol: nx)ncy up front t() slrow y()u I nrciln busiress :urd s{) yolr cxD flcl sccufc, l)u1I nccd to bc olxking a snrart irvc$tmcnt mysclf. Ynr undcrstrD(l rhal, don t you? I wxnt to bc fair hcrc, but I l1ccd () bc ftlir to l)rysclf too. Sellcr: Ycirh, I undcrstxnd. l.ook, if you arc willin{i to ll,ivc n]c thc 1\rll$200,000price wc wclc tllll(ing nbout enrlicr with S lO,0O0 down wc luvc a dcxl. l,rvcslor: Oh, so bxsically as long as I rgrec t() get closc to your $200,0O0 pricc you'rc okny wirh getting $5,0O0 lo $10,000rp frort. (Nolicc you iust uscd the lnngc tcchniquclwice-oncc on thc $200,000 pricc a|rd oncc on thc $10,(J0O dowlr payment. See how casy thiri is?) Scllcr: I couldn't do $5,t)00 down; I mi{lht go 1|slow :rs down, il you agrec to thc $2Oo,0O0price. $t|,OOo

2{ Nr E U l i r u I I f ( L | n r q u c . l ', G ( r l h c l n - l D ( l

fo\.ihl(

Invcstor: C)h, $()il l agrcc (o thc Iull S200,000 pricc you'd bc opclr to 56,000 t() S8,0OO lron(. up Scllcr:I didn't sxy $6,000;l said S8,(X)O. ()kay. Invcstor: Oh, !7,OOO ${i,OoO. to Sellcr: I gucs$ | eould livc with 5ZOO0,flut I culrldn t txkc

Scc how you usc(l whirr y()r irre lcxrning in tl)is bo()k to gcl lh( )Fn p:ryme|rt front lO pcrccnt irll thc wny down lo J.5 percc t? ll' you fin(l(hc riglrt tcnll|!l)uycr, you will pr'obal)ly nx)st,il uot ull, gel y{)ur lcnrnt-b ycr's opti(nr Pxymcnt! ol this nr()ncy l)ack lhnrr ()rrc ol our sl (lcnls,(jhcryl, wxs ncl.lotirlinS x smxll h()!rsc or rvilh x srllcl wh() s:lidhc w()uldhc willing to cnrry bxck thc Iinunc ing. llc suid l){:would crrry:r li'1\tnnr.tgr8ens k)llg xs shc ciorc irl rvith SlO,(XX) d()wr. (ihcryl fijspo|rd!.tlthat lihc ccrlxinly t|ndcr' $(x,d hiI l(,ltct :r (lown prynrcnt s() hc would lc(l s(crrrc irl 'tccd (lr:rl. llul lo bc lirnk, with lhxt s:rnrc$lO,(X)l) lhc shc coul(l g() ()ul rnd b(v thr!"c or ti)rrr lx)uscs ind rrr{kc r nruch bcttcr (xtc ()l rrlufll (xr hcr nxnlcy. 'l hc scllcr srid hc Undcrsl(x,(l tlrat rn(l crnrc l)ick .lnd silid hc w()uld rkcd:rl l(rsl $2,500 &rwn! (ihcryl kcpt hcr c(x)l ind rcrncrrrl)(rcdt() pliry lhc rcluclunl huycr.And slrccrlnrly rcccp(cd his olli'r (,f buying thc pr()pcrly li)r &Jwn in(l (hc owncr cxrryi|rg l)rck thc buf ii 155,(X)0-wilhS2,5(X) :rnce:r$u fi|lil md ll.irl.tc wilh inlcr(st rt 4.72 pcrccnl. Chcryl lxtcr fcsol(l lllc propcrty on x r(lrt to-()wn l)irrisi||rd nradc I nicc cxsh l-low lionl thc sprc:ld l)clwecn her prynrc,)ls rD(l thc rcDt for lhc phcc. Slrc xlsl) sr)ld ir lbr S22.(X)0nx)rc thxD sh( pilid for ia-And thc fiDal pxrl () thc dcrl wrs lh:rt sllc :rlso collcctsd $5.OOooption monry lrorrr hcr tcnaDt-buycr up froot, so this wrs rcxlly x n(rthiDg-down dc:rl fbr hcrS()therc you h;rvc thc f()ur D()st cr)nrnon scllcr obiccti{)ns rDd how to hilndlc rhc . Re r(nrl)cr thnt nost sellcr obtections :rr itrs( thcir wxy ofsxying lhc)' fccl x bir uDconrf()rtablc.flsc this is a sigDxl to sklw things down, go brck ovcr things, and makc surc you:lrc

141

lztiry

AB Uor|GyhrdinA

tn ttlrt tb&rc

continually bulldlng your lcvcl of rapport with thc seller. If the 8llcr fcls conrfoft4ble wlth you, then you will havc c much bettcf chancc of picking op thc dal. Mo$t sellcr obiectlods mclr awry whel sellers fcel a seDscof emotlon4l conncctlon stth you, thc inve$or. S'olcam aobuild this (lnrrccdon-

Negottattng Wrap Up
You've ,ust leamcd 23 $peclfic techniqucc to hclp you get thc bcsr dc.l pocslble. Remcmbcr, dl of these technlqucs wort bcst when you arc rblc to establish an emotioo.l connccdon wfuh thc $cllc'r. Al9o, lt trkes prdcticeto putthese ncwtcch[iques into actlon. Repctitlon ir thc bc$ wly foi you to hrcrtrgllrc lhcse ncgorhting attltudc's and lmSu.ge pdncros. thc froyoff irswonh thc ttrnc .nd cffort to mas&:rd|cs sraataglcs.Ovtji thc ycatr, our rtudcnts h4vc wed thcm to buy, 3|rLl,and lc.sc optloo o!r St(X) mtllior! worth of tc.l csht. 'llEy wlll wo.* for yoq too.