Don’t Ask: “What’s Your Asking Price?”

Posted on March 23, 2012 by

What’s Your Asking Price?Cruising yard sales and working at a pawn shop are two of the best ways to learn how to negotiate.

I’ve spent years doing both, and one of the biggest mistakes I see people make is asking the seller, “What is your asking price?’

Big Mistake – huge!

Think about it:  when a seller prices an item for sale – whether it’s a boat, house, or trinket – he has a ‘written’ price in his mind.  Usually, he will ask one price, but will take another.  So when you, as the buyer, ask the seller, “What’s your asking price?” he mentally sees the ‘written’ asking price in his mind and gives you that answer, instead of the price he will actually take.

For example: I recently had to buy a stove for one of our flip properties.  I went to a used appliance store and chatted with the owner.  As he showed me several stoves that would fit my needs, I asked him how he got started in the used appliance business and how had the economy affected him.  I was genuinely interested – since his business would indirectly affect my business.

As we passed by the stoves that I liked, I asked him, “What do you need to get out of this one?”  I didn’t say a word as he quoted his price, I just simply moved on down the aisle.  As we continued the conversation about the economy and his business, I stopped at the next stove that met my needs and asked, “What will you take for this one?”  I never mentioned the word “price.”

We cruised through his entire stove inventory until I had narrowed my choice down to three.  Then I asked, “Tell me what you need to get for this one again?” 

Not surprisingly, he quoted me a lower price than he had the first time.  I simply nodded my head and kept moving.  “And this one?” I asked.  Again, a lower price.

Within 30 minutes, the seller had reduced the amount he was willing to take on the stove that I wanted.  And never once did I have to ask him to lower his price.

The business owner felt good about our transaction for two reasons.  #1:  He got to talk about his business, and #2:  He set the price, not me.  He didn’t feel like I beat him down.

He walked away knowing he’d struck a good deal and I walked away knowing I’d paid the exact price I wanted to pay.  A win-win situation for both of us.

Take your time when negotiating a price.  And remember – it isn’t only about what you are willing to pay; it’s also about what the seller is willing to take.

Bill & Kim CookBill & Kim Cook are a husband and wife real estate investing team. They live in Adairsville, Georgia and have been investing in real estate since 1995. They specialize in buying single-family homes, mobile homes and mobile home parks. They also run North Georgia REIA and teach folks how to successfully invest in real estate.

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