Negotiation is a very important skill that you will need in many aspects of your life, especially real estate investing. The art of negotiation and persuasion is one of the skills that separates successful people from those who are not as successful. First and foremost, it is important to understand that during a negotiation you should be looking at the situation through the lens of the person or people on the other side of the equation. What do they want out of this deal and is there any scenario in which you can give them what they want? This is the first question you need answered during any negotiation so that you will be able to base the entirety of the process off of what they want in order to reach a desired solution for all parties involved. Look at the situation from an objective lens and ask yourself if you would accept what you have to offer if the situations were reversed. If not, it may be time to reevaluate your strategy. Many people make the mistake of going on about what they want rather than listen to others. This can be a fatal misstep since you already know what you want so the best use of the conversation is to find out what the other party wants in order to try and fit the puzzle pieces together and develop a solution. Throughout the rest of this post, I will go over many skills and techniques that apply to negotiation in general and tie them into the realm of real estate so you can better understand how to use these skills in practice.
Asking the right questions
When in a negotiation, it is important to make sure the questions you are asking are targeted at a specific outcome. This will allow you to guide the conversation where you want it to go and maintain control over it without making the other party feel out of control. Oftentimes, asking the right questions will allow you to gain access to information that will piece together exactly what the other person is thinking and what they want out of the transaction so you can better formulate your responses. Some of the key components to find out when dealing with real estate specifically is what the other party’s motivations are, what their timeline is, if anyone else is involved in making a decision other than who you directly speaking to, and what their ideal outcome is if everything were to go according to their plan. The best way to have these types of conversations with this type of transparency is to establish a mutually beneficial relationship from the beginning and express greater care about the other party’s needs rather than yours. Establishing this feeling will make the other party feel less guarded and more open to sharing abundant information with you as long as your questions are focused and all have an end goal.
Listen more than you speak
A big area where people get into the most trouble during negotiation is when they talk more than they listen. This can deviate from the objective of the conversation, to find out what the other party wants most, and instead focus in only on yourself. Not only is this counterproductive for negotiation, but it can also come off as annoying to the other party. You never want to make yourself unlikable in negotiation because it severely inhibits your ability to get what you want. In real estate, letting the other party speak while you listen will allow you to gather more information and formulate a solution that fits both party’s wants to the best of your ability. This principle goes hand-in-hand with the “asking the right questions” section in the sense they both in combination allow you to understand the other party and develop well-rounded solutions to benefit all.
A confused mind always says no
When presenting a solution you think would work for both parties, it is important you explain the solution and process thoroughly for everyone to understand. This is especially true if your solution is something uncommon that you suspect the other party may not be familiar with. When doing this, make sure you emphasize the benefits of this approach for them and why it is better than any other avenues. If you don’t do this well enough and your reasons are not well-justified leaving the other party confused, they will surely say no to any proposal. If you are unable to do a good job explaining to the other party why this solution is advantageous to them, you should either re-evaluate your explanation skills or the solution itself to find out if it really is as good as you thought. In real estate, there are many unorthodox ways to buy and sell property the layman may not be aware of. When trying to negotiate deals, it is important that you are able to explain your solution objectively and its benefits to the other party clearly and concisely. Leave no room for interpretation in your solutions and there is no doubt that if you do your homework, you will hear a lot more yeses than you would have otherwise!
Ask “how can i do this?” Instead of saying “I can’t do this”
When a negotiation is at a standstill and no one seems to be able to develop a solution that benefits everyone, it is important to stay persistent and exercise every option possible if you truly believe whatever it is you’re negotiating for is worth the fight. When presented with roadblocks and hurdles, doubts from outsiders, and sometimes failure, it is important to ask yourself the question “How can I do this?”, rather than state “I can’t do this.” Using the question allows for your brain to delve into any and every possible solution to the negotiation whether that be seek help from outside sources or thinking more critically about the things you may have thought of. Making this simple mindset shift will make you a millionaire because you will be more able to solve problems most people would just give up on.
Make the outcome a win-win
This point has been touched on a good amount in this blog but deserves mention again as it is the key to any successful negotiation. In order to develop effective solutions, it is imperative you find win-win outcomes that get both parties what they want. You don’t want the other party to leave a transaction feeling like they lost or got ripped off as this will only lead to a bad reputation for yourself through negative word of mouth in the not-so-distant future. You want to be a problem solver everyone loves to work with. This is sure to get you more business in the field of real estate investing and help you during any other situation in which you need to negotiate or persuade another party in general.