Let me explain….
While searching for something to watch on TV, I ran across a show on A&E called Barter Kings. If you’re not familiar with the show and what it’s about, essentially, in each half hour show, A&E follows what is called “two ‘trading strings,’ the dramatic chain of events as items of little value are traded up for items worth thousands!
“At the heart of every trade is the art of the deal…
“It takes a ton of strategy, charisma, and all out manipulation to close them. It’s a world filled with amazing characters, fascinating items, and most of all, surprising, unpredictable journeys. When it comes to Barter Kings, anything can happen.”
Watching how these guys negotiate their trades to be able to ‘trade up’ reinforced several things I have learned over the years about negotiating a real estate wholesale deal.
Below are the 7 lessons about negotiating that were reinforced while watching last week’s episode of Barter Kings:
- Don’t get excited – keep your game face. Keeping your emotions in check is essential when you KNOW 100% you’ve got a smokin’ hot deal. Case in point, I remember getting a call from a seller about a property located blocks from one of the area universities here and just about lost it when she was telling me where it was located, that it didn’t need a lot of work and what she was looking to get for it.
- Never feel guilty about getting the better end of the stick. Remember, what we’re offering is to pay ALL cash, as-is, with a quick close! We are investors, which mean we are in it to make a profit. And to do that, we have to get it at a discount. The benefit to the seller is that they are getting cash today, without having to list it on the MLS and sit around and hope and pray that their house, which may or may not be in disrepair, gets sold – QUICKLY.
- When in doubt, bring up the spouse. I’ve spoken to many sellers, usually men, who make mention of the fact that their wives have been on them about getting rid of a house that’s just sitting there not making them any money. Pointing that out in your negotiations can prove to be invaluable. It’s still great to bring it up even if that is not a point of contention in the home.
- This thing isn’t bringing you any money. Great to point out, especially in the case where the property is just sitting vacant, not bringing in any income.
- Let them think that they are right in their belief that the item is not worth a lot. By allowing the person to think that their item isn’t really worth a whole lot, they have pretty much sold themselves on why they should get rid of it, and don’t expect much for it. The same principle applies in our own negotiations. Stepping back and letting a seller list all the reasons why their property probably is not worth very much (in most cases they are correct), and offer you a number where you need to get the property sold to a cash buyer, is like being handed a gift on a silver platter, so to speak. Those kinds of deals don’t come along every day.
- Find a soft spot. In the case of the two Barter Kings, soft spots for them were children, grandchildren, etc. For example, when someone would mention that they were looking to barter because they were trying to do something for their children or grandchildren, the barter kings reminded them of that fact. We refer to it in our business as pain points. Herein lays the benefit of letting the seller do a lot of the talking so that you can listen for things like that, and remind them of the reason they are looking to sell in the first place.
- Closing the deal takes skill and strategy. Having the skill without the strategy to best use that skill is useless. Skills can get you only so far. From time to time you’ll see them researching the value of the item they are looking to trade up to, as well as their own item, all of which makes for better negotiations.
As with wholesaling, by making the mistake of putting a property under contract without doing sufficient due diligence on such things as the neighborhood, the block the property is located on, back taxes, liens and judgments, etc., you run the real chance of eating into your profits in the end.
Please understand that by no means am I suggesting employing the use of manipulation as was mentioned in the show bio above, or anything unethical or the outright exploitation of others.
I am suggesting that you use the insights from above to reinforce and improve your skills as a real estate wholesaling ninja negotiator. Just don’t be that guy/girl who operates without ethics and morals.
Now go negotiate, ninjas!
Iman Yusef-Yahya, also known as ‘That Philly Wholesaler Chick,’ hosts a content-focused blog at http://www.RealEstateWholesalingExplained.com.