What Not to Do When Negotiating – Part 1Posted on July 1, 2014 by
Jimmy Napier made the following quote and I truly believe these words are a key to create wealth in today’s real estate market.
Quote: “You Make The Majority of Your Money In Real Estate During Your Negotiations”.
Last month I made reference to what I believe will be the key to success for real estate investors in the event the economy tanks like the economist Harry S. Dent has recently predicted. As you may remember I talked about how every investor needs to learn how to talk to sellers face-to-face and negotiate profitable deals without thinking that all every seller wants is all CASH. Since then I have had much thought about things I have experienced through my career of over 35 years that were what I call “Deal Killers”.
If you want to be a successful real estate investor you need to not make the same mistakes I made when negotiating with sellers. For the first 20 years of my career I had no training of what to say and what not to say, I learned negotiating by just opening my mouth and saying what I thought every seller wanted to hear. I can’t tell you how many deals I screwed up just by saying the wrong things or by not asking the right questions. This article is about some of the things I have said and how those things were deal killers for me.
- Stuttering and Stammering – In the beginning when I had no money and no credit and I would sit at a kitchen table to talk to the sellers about buying their house there was one thing I knew for sure, one offer I couldn’t make was to offer to pay the seller all CASH for their house. As I talked to the sellers my mind would go blank and the only thing I could think of to offer the sellers was all CASH. Because I was trying to think quickly while talking to the sellers I would stutter and stammer which made the sellers recognize that I didn’t know what I was doing and because of my confusion I rarely bought a house when I would stutter or stammer and was red in the face.
- Look and Act Scared – Because of my inexperience talking to sellers and not knowing how to come up with a solution to buy the sellers house I have been told that I looked and acted scared which was another red flag that gave the sellers no confidence that I was capable of paying them every month for their house.
- Trying to Mimic a Seminar Speaker – After I attended a couple seminars and listened to the speakers I tried to mimic what they had said but it wasn’t too successful for me. I didn’t have enough experience to make much sense why I said the things I did. When it came time to make the seller an offer to buy their house I would say I had to run the deal past my partner before I could make them an offer. Just because I couldn’t make an offer myself that made sense to me I said what the speakers told me to say but the problem was I would leave without making an offer to buy the property and I would never go back. You see, I didn’t have a partner to run the deal past. I was just doing what the speaker had told me to do. I didn’t have enough money to buy the speakers course so I had to rely on my memory of the words they said to the audience.
- Over Dressing for Success – Another seminar speaker told his audience to go home and buy a $2,000 suit, a man’s diamond ring and a Rolex watch and drive up to a sellers house in a Mercedes 500 SL and try to buy the sellers house when I didn’t have the availability to borrow money nor did I have access to other people with money at that time. I didn’t do everything he told us to do, but I did dress up as much as I could afford. I quickly realized when the sellers saw me all dressed up they became less flexible, they asked more for their house and expected only all CASH. I quickly learned that this method wasn’t working for me so I quickly started dressing like a normal person who needed seller financing terms and had limited money.
More next month…