D3TV – Reluctant Negotiating

Negotiating as the more reluctant party is a powerful strategy for getting what you want.

As real estate investors, it is easy to be chasing the other party.  They are reluctant and this puts us to a disadvantage.

I talk to a lot of people who want to sell their houses.  Some of them are motivated to sell and some are curious about what they can get.  I only have so much time and money available, so I need to focus my efforts on those that are truly motivated.

I realize now that putting myself in the reluctant position is way to filter out the simply curious.  If I take a moment in our conversation to explain a bit about my business model and then ask the seller how their house will fit in that model, then the sellers filter themselves.  The motivated will work with me to make it work.  The curious will not play.

In my case, I buy houses to rehab/flip or rent.  I explain to the seller that I can’t buy at retail prices – I need to fix the house and then sell it and still make money.  I also tell them that if I have to give them cash up front, then my costs are higher and I will not be able to pay them as much.  I can pay more if I get to make payments over time – either seller financing or delayed payment.  Then I ask them how they can adjust to make this work for both of us.

They need to convince me.  The simply curious do not care about any of this.  They just want their price or they want me to just make an offer.  The motivated understand that solving their problem is going to require them to work with me to come up with a solution.

Have you had a similar experience?

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