Epic Real Estate Investing - Creative Negotiating Strategies for Presenting Offers | Episode 210

Episode Date: June 20, 2016

We’ve been talking a lot about creative investing on the podcast lately and we’ve received some great feedback.  Many listeners are wanting to know how to get these creative deals settled.  Today Matt shares 10 creative negotiating strategies that will increase the likelihood of you getting your offer accepted.  ------- The free course is new and improved!  To access to the two fastest and easiest strategies to a paycheck in real estate, go to FreeRealEstateInvestingCourse.com or text “FreeCourse” to 55678. What interests you most? E.ducation P.roperties I.ncome C.oaching Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Broadcasting from Terrio Studios in Glendale, California, it's time for Epic Real Estate Investing with Matt Terrier. And welcome to Epic Real Estate Investing, the place where I show people how to escape the rat race using real estate. Just shift your focus from making piles of money to making streams of money, change that one thing, one time, and you're on your way. You are on your way to financial freedom. It's not the most exciting path. I promise you. you, you have been warned.

It is dull. It is boring, but it is the fastest. And once you get there, life then becomes exciting. And speaking of exciting. Well, let's keep getting creative with our real estate. Lots of great feedback. I love the energy. This is probably the most interaction I've had with my audience in so long.

You guys are fired up about this creative structuring, the creative deals, the creative financing. We're going to talk about more creative stuff today. We're going to back up a little bit, though. We've got the creative deal structuring down. the creative financing down. We've got our toolboxes filled. Let's back up and go over 10 creative strategies to help getting your creative offers accepted. Ten creative negotiating strategies. Okay, just little tips and tidbits you can drop in there that's going to increase the likelihood of you

getting these creative offers accepted. And remember, your negotiating skills, that's all the intellectual currency, right? We've talked about that. That's your intellectual currency and that can put money in your pocket faster than anything else. By me, by asking the mere question, excuse me, Mr. Seller, what's your bottom line? That question right there can make you $5, $10,000 every time you ask it. So you're negotiating skills that can put money in your pocket faster than anything else. And they're completely free for you to use. All right?

You just have to use them. You've got to use them. You've got them, but they only work if you use them. Now, it's not too difficult to find good deals and execute your strategy. I mean, it's a challenge, especially if you're just getting started. there's a learning curve, but you can find good deals, you can execute your strategy, and then you can realize that profit. But if you add these creative strategies, the creative negotiating strategies, to your toolbox.

And if you do that, you can turn no deals into good deals, and you can turn good deals into great ones. So with regard to creative negotiating, you probably already use this one. Let's get started. You probably already use this one. You start low, right? You start low. You offer a price lower than what you're willing to pay because you want to leave room for

negotiating you want to leave some room there pretty simple but from this point forward this is what I want you to do this how I want you to do it I want you to offer a very odd amount like instead of offering a hundred thousand dollars mr. seller offer a hundred and one thousand three hundred and sixty four dollars something just very specific what it does it gives the impression you know what you're doing and it instills a bit of confidence in you from the seller indirectly inherently what it says it says you know your numbers and it says you have a very good reason for this exact price.

Okay? So go ahead and start low, but then also give a very odd amount. Got it? So that's number one, offer an odd amount. Number two, introduce precedent for the offer that you're making. You know, something like, you know, my dad purchased his house just like this.

Introducing that somewhere in the conversation really helps with your creative offers as, you know, sellers, they have a tendency to get a little nervous. And so this gives them some comfort about what you're doing and what you're proposing. And like, because it's been done before. So you know what you're doing. So it gives them a little bit of comfort and, you know, create some space for them to actually accept and follow through with it.

So number two is introduce precedent for the offer. Number three, this is one of my favorites. Ask for stuff you just don't need. Ask for just funny stuff. One doesn't have to be funny. It can be real, too. But stuff that you don't need. Make stuff something like, ask for the patio furniture.

If it's nice, of course, don't be ridiculous. Or ask for the appliances. Or ask for, say, the boat that's stored in the garage. Ask for stuff that you don't need you. What happens is you put the seller in the position to win a concession should he or she have, you know, refuse one of your requests. And you also add a point of leverage if some sort of renegotiating down the road is required. You have something to give up in order to get what you really want.

And when you're giving something up, the seller's going to feel like they win, and so you're more likely to get what you want. Okay, so ask for stuff that you don't need. Number four, another creative strategy is to play dumb and ask questions that you might already know the answers to. You know, you just don't want to show off too much your expertise until at least you have the contract signed. And be the professional that you are.

I'm not saying be an idiot. No, be the professional you are, but be careful not to intimidate the seller. you know, you can think Colombo. Remember Colombo? You guys are probably too young for Colombo. But I mean, I have some 40 plus year olds out there. Think Columbo. Like, oh, I'm sorry, by the way.

Or, you know, I'm not sure how this goes or how does this work again and something like that. Because you can instill a little bit of fear into sellers if you wield too much of your hot shotness here, too much of your epicness. You know, causing them to feel like they're being taken advantage of or they need to call their lawyer before they proceed because now they're a little bit concerned. that I'm dealing with the smart cookie here. All right? So not necessarily, you don't have to play totally dumb, dumb, but don't show them how smart you actually are. Don't let them know.

I've been listening to the epic real estate investing podcast, so I got this down. Don't let them know that. All right. Number five, and this can be very effective. Use what's called the limited authority strategy. And we're all hip to this one. We've all seen this before.

I mean, if you've ever purchased a car, you're totally hip. You've seen this. It's the old, let me check with my manager on that clothes. We've all heard that before. And in the context of real estate, you might want to try something like, you know, sounds okay, but I'm going to have to check with my partner. Or if sounds okay, I'm going to have to check with my wife, something like that. I have to check with my accountant. This can make it easier for sellers to accept your offer if they know there's something that you can't do as opposed to something you won't do.

You got it? So that's the limited authority strategy. Six, be a reluctant buyer. You know, as much as you may want that deal, you got to maintain some posture or a disposition of uncertainty. You got to be a little doubtful if the deal is even going to work for you. I don't know. Is this really going to, I don't know. If you look like you really want the deal or you're excited about the meeting, it can cause the seller to hold their ground.

But if you're reluctant, the seller then, you know, kind of inadvertently tries to sell you on accepting the deal. And when they do that, once you do take on that deal, they're going to feel as if they won. You know, once you reach that agreement, they feel like they won. And that's a good place for the seller to be when they feel like they won. They feel good about it. All right. Number seven, you want to isolate their motivation. You know, one of the things I almost always say when speaking what the seller is.

And sometimes it comes right at the front, right at the beginning of the conversation, sometimes in the middle. Sometimes at the end, you got to use a little bit of discretion here. But what that is, I say, you know, I think I can make this deal work. but I've got to know what is more important to you? Selling for top dollar or selling fast? What is more important to you? Selling for top dollar or selling fast? You see, when you get there real desire isolated,

you've got more to work with now. You know which direction to take your conversation. You know whether you're going to be negotiating the price or you're going to be negotiating the terms. But use your gut on this. Even though sometimes it's appropriate to ask this up front, it's more effective if you wait until some rapport has been built between you and the seller.

All righty? So what's more important to you? Selling for top dollar or selling fast. Number eight. And now this is an old school technique, but still very effective. Try to get some yeses from the seller before you actually make the official offer. Like, so Mr. Seller, if I gave you your price but got my terms, would that work for you? Or if I close in 14 days like you want, but I got $2,500 off.

Would that work for you? Okay. Even if there are still some details to be ironed out, the sellers will tend to say yes to your offer if they've more or less already agreed to it. Got it? So that's number eight. Number nine. Hold the problems for last.

Carry out the problems before you discuss those. I mean, as much as you are there to solve that seller's problem, agree on as much as you can upfront, you know, like the escrow period or the vacancy date or the repairs that the seller mentioned. do as much of that as you can, get as much agreement up front as you can before you discuss the real problems of the seller. It's going to feel to the seller like the property is already sold, and they'll find it difficult to lose a deal over an issue or two that you need to go in your favor. Got it? All right, so that's number nine, number 10, and I saved the best for last, as this is my

favorite, because I've built my portfolio with using this creative strategy, and I think I use it just about every time. I make the offer seem like it was the seller's idea. For example, when I send out my three-option letter of intent, rarely does a seller call back and say, hey, I like option number two. Good to go. Let's rock it. Rather, they'll say something like, actually, just this week.

This happened just this week. This very thing happened. The Epic wealth fund, we're in pretty aggressive acquisition mode at the moment. And so we've ramped up our prospect and we've ramped up our marketing. and we're using the three optional letter of intent as one of our primary tools. And this week, a guy in Memphis called the number on our LOI and said, I like option number two, but can I get a bigger down payment? And because I heed creative strategy number one that I shared with you today,

offering lower than you're willing to pay, the deal still worked based on what he wanted. So I replied with, are you saying you'll take option number two if we can get you a bigger down payment? And after we worked that number out, I said, okay, well, we can do it your way then. I'll have the contract to you shortly, and in the meantime, here's what I need from you. See how smooth that was? See how smooth that is going into the close?

I said, okay, we can do it your way then. I'll have that contract to you shortly, and in the meantime, here's what I need from you. Deals closed, deal's done, right? So the three-option letter of intent, it does so much more for your business than just offering alternative deal structures to sellers. It creates deals and opportunities where there wasn't one before. It often justifies your lowball offers. It keeps the conversation alive. It keeps the conversation going.

And it puts you in a position to easily follow up with an elevated negotiating position. So if you haven't picked it up yet, you can at epiclloi.com. It's totally free. And you can even grab the calculator there that I used to put that whole letter together. Epiclloi.com. All righty? To your success, I'm Matt Terrio, living the dream. You've been listening to Epic Real Estate Investors.

the world's foremost authority on separating the facts from the BS in real estate investing education. If you enjoyed this show, please take a minute to visit iTunes and share your thoughts. Thanks for listening. We'll see you next time here at Epic Real Estate Investing with Matt Terrio. This podcast is a part of the C-Suite Radio Network. For more top business podcasts, visit c-sweetradio.com.