Epic Real Estate Investing - EPREI 024 : 5 Steps to Win/Win Negotiating with Motivated Sellers

Episode Date: January 18, 2012

This is show time! This is where the deals created! This is where the money is made! On this episode, Matt shares his 5 step process to win/win negotiating with Motivated Sellers. If you help enough people get what they want, they'll give you everything you want. We think that was Zig Ziglar that said that??? If so, he would've made a great real estate investor with that type of mindset. Enjoy the show! Announcing the pre-launch of EpicProAcademy.com. 75% off during pre-launch. This offer will never be made again. Learn more about your ad choices. Visit megaphone.fm/adchoices

Epic Real Estate Investing Podcast, episode 24. Without further delay. Your guru. Sorry. Your guide to a better life through real estate investing. Matt Terrio. Hello and greetings from the Epic Real Estate Investing podcast, the podcast that's going to show you how to build wealth through creative real estate investing.

So you'll have the option to realistically retire. the next 10 years or less and enjoy the good life while you're still young enough to do so. That's the goal here. My name is Matt Terrio, author, full-time real estate investor and family man. If this is your first time listening to this show, you're going to want to do two things. First, go back and listen to episode one for the ground rules of the show. And two, download the free real estate investing course, how to do deals, no money required, at free real estate investing course.com.

It's a step-by-step course of where I unveil the mystery around doing deals with no money or credit. Someone's going to finally give it to you straight, okay? Now, we've made it all the way to episode number 24, and I haven't promoted one product or one service. And based on your emails and your comments, I know many of you really appreciate that. And I promise that this podcast would be somewhere in the realm of 90 to 95% content. I promised that in the very first episode. And occasionally, I might ask you to do business with me, but I stress that it was going to be occasionally. Well, today's the day.

And by being episode number 24, that would actually make this podcast 96% content. And I have successfully underpressed and over-delivered, of which I believe is good business. And I actually thought my book, The Epic Approach, would be the first thing that I was going to share with you. However, it's still enduring the editing process. It's done. It's just being edited. So that will be available soon, and I'll certainly share that with you. And what I didn't anticipate was that the Epic Pro Academy would be ready first.

And just last Saturday, we entered a soft launch of the Epic Pro Academy. The official pre-launch begins this Thursday. It's actually tomorrow, January 19th. And I have several of you that have already taken advantage of the soft launch promotion. So thank you for your patronage. Thank you for your business. really excited for our future together. So head on over to Epicproacademy.com to watch a 30-minute video that I put together just

for you that answers the question, why real estate, actually answers several questions. Why real estate? Why you? Why right now? And most importantly, how? How you can get you some real estate, okay? And how you can get some real estate and join the ranks of the wealthy 1% of the population. Now, as I mentioned, the Academy is in soft launch.

And what that means is that the lessons are being refined on a weekly basis. It's important to me, it's really important to me, that the Academy is extraordinary in every aspect. I really, it's not going to be worth it for me. It's not going to be a success unless it actually makes a difference in the students' lives. So to be able to do that, I mean, there's a limit to what I know that my students will want out of the course. What's actually going to make a difference? So I will be investing a significant amount of time with my initial students during the next couple of months to assure satisfaction for all. And, you know, actually based on the rate new students are joining the Academy, I anticipate hitting my pre-launch capacity by the end of this weekend.

And, you know, during this pre-launch, I'm offering a 75% discount off the regular price. Not 50%, but 75%. As well, I'm also offering a 45-day 100% money-back guarantee. And once I reach my pre-launch capacity, I will be closing the doors to all new students until the official launch, till further notice. Don't know exactly when that's going to be. And when I reopen for the official launch, I will launch at the normal price. I will never, ever make this 75% discount offer again. Never.

I promise you that. You have my word on that that, that I won't make this. discount offer again, okay? So, if this is making sense to you, if it's resonating with you in any way, if it's resonating with you whatsoever, visit epicproacademy.com to view that 30-minute video. Get all the information that you need to make an educated decision about whether the Epic Pro Academy is for you or not. If so, join. Take advantage of this ridiculously low price. If not, that's 100% okay with me too. You know your situation better than I do. Now, just as I've done with this podcast, it's also my intent to successfully under promise and over-deliver with the Academy.

I'm not going to be satisfied until I accomplish that. So go to Epicproacademy.com, watch that 30-minute video, and make the decision for yourself. There, that's it. That's my sales pitch. You know, you might be able to tell I'm a little bit different, a little bit of a different kind of businessman. I tell you exactly how it is. I tell you what it is.

I'm completely transparent. There's nothing to hide. Okay? Either way, you can breathe now. We've got at least 20 more episodes or so to go before I pitch anything to you again. And on that note, let's get on with today's show. I know last show I promised a great interview with the Flip That House Girl, but we were unable to coordinate our schedule.

So I've got something just as good, if not even better, for you today. We've done a bunch of interviews actually lately, and maybe it's okay if we do take a break for a minute and get down to some real nuts and bolts real estate investing. So what I've put together for you, I'm going to share with you my five-step negotiating system, the one that I use when I visit a motivated seller's property. But before I go there, speaking of negotiating, I wanted to share an awesome comment I just received over iTunes. And it's relevant to today's show.

And it comes from Michael Curry. Michael writes, actually, I have to read the headline because this is the great headline. It's one of the greatest headlines I think I've ever read. Michael wrote, one of the best real estate investing podcast's exclamation point. Isn't that awesome? Thanks, Michael. Michael writes, this is probably one of the best podcasts I've ever listened to. Matt gives so much information and insight on how to expand and grow your real estate investing business.

Matt gave a tip in one of his podcasts stating that the next time you go to a hotel, ask the guest services attendant if they could do you a favor and upgrade your room because it's a very special night for you and your significant other. Well, I followed the same exact tip in my stay in New York City, and they upgraded my room from $150 a night room to a $300 plus a night suite on the 25th floor. The point of this tip is just open your mouth and just ask and good things will come. Thanks, Matt, exclamation point, exclamation point, exclamation point. There's like five or six of them there. Well, Michael, you're welcome, and thank you.

I mean, I really appreciate all the nice words. and you know what is so satisfying about Michael's comment is that he took one of the most mundane suggestions that I think I've ever made on this show. I actually forgot I made that suggestion on this show. Has nothing really to do with real estate investing. Well, nothing directly to do with real estate investing, but actually has everything to do with it indirectly. He took my suggestion and he gave it a shot and he got results. He got great results. So there are several points inside of this that I want to draw your attention to.

First, this is a people business. Business happens between people, and you've got to communicate with them. That's the first point. Second, he opened his mouth and asked for something. And because he asked, he got. That's the second point. That's a biggie. Even he recognized that one.

Third, he found some money for his transaction. He found some money. By asking that question, he made $150 a day during his stay in New York City. He made $150 a day while on vacation. Or maybe he was on business. I don't know. If he was on business, he made an extra $150 a day while he was working. So you've got to get that there is cash value to your negotiating.

I mean, how many of you make $150 a day? That's a $50,000 a year job. And Michael made that salary while on vacation, while visiting New York. The fourth thing he got here, he probably looked like a rock star to a significant other, right? and you can't put a price on that. And the fifth thing here is, and what I believe is probably the most important thing, is Michael did it.

He took the instruction, he applied it, and he got the result. That is a huge lesson. I mean, there is no bigger confidence booster than that. And confidence inside of your real estate investing is priceless. Michael took a small step with a hotel room and experienced success. Now, I have no idea what his experience inside of real estate investing,

is if he's just beginning or if he's been doing this for a while. But either way, the bigger step, that next step is going to be that much easier. And the more steps up the ladder that you take, the easier it gets. And the easier it gets, the more money you make. There's real estate investing thing. It's a process. It's a journey. It's an evolution.

And it's not about doing one wholesale deal or flip so you can go pay your bills. That's not what it's about. It's not even about the money at all. It's really about who you become along the way. And the freedom that you get to experience in life will be in direct correlation to who you become. I so hope you're getting this because it's everything, not just in real estate investing, but life.

And when you start stretching yourself, when you start getting out of your comfort zone, when you start moving at the speed of instruction and you start taking action just for the sake of taking action because you know by taking action, it creates stuff in your life. Once you start doing that, light bulbs will start to go off.

You'll see things that you can't even see right now. You'll start to discover things that you don't know, you don't know. There are things in your life right now about your life, about your success, about your real estate investing that are completely invisible to you. That's why moving at the speed of instruction is so important. You must travel as far as you can see. and when you get there, then you'll see further.

I mean, that's how it works. Don't do what everyone else does. Don't wait to get all of the answers before taking that first action. You'll never have all the answers, by the way. I mean, traveling from your home to work every day, how far would you get if you decided not to leave for work until all of the traffic lights turn green? You might have heard me say that before.

But how silly would that be? I'm going to sit right here in my driveway, and I'm not leaving this driveway until all of those lights turn. green. How far would you get? You would never get to work, would you? No. I mean, that's what normal people do when getting started in real estate investing or getting started in really any business or any new endeavor. And if you do what normal people do, you're going to get what normal people got. Mediocrity. At best. You know, I'm really passionate about this, as you might be able to tell. And maybe you think I'm making a big deal out of or over-hyping Michael's hotel room

discount. But it is a big deal. It's huge. You can tell in the way that he wrote his comment, it was huge. Lots of exclamation points. And if you don't see that, if it's not huge to you, it's likely because you're not taking enough action yourself. You're not on the court playing the game. Yes, I mean, it's fun to be a fan and stand on the sidelines and watch your team win. I love it when the Lakers win. I feel good when they win. I love it when the Dodgers win. I love it when the Rams win.

Although that's not very often these days. But how do you think the players feel when they win? I mean, as good as it feels to me when my team wins, it's nothing like what the players are experiencing down on the field. Nothing. I mean, as good as listening to podcasts and attending seminars and watching webinars about real estate investing, as good as that all may feel,

it doesn't compare to actually getting on the field and playing the game. And if you haven't experienced it, trust me. People love to learn, but very few love to do. And all of that pales in comparison to actually being on the court and winning your own game. So today's the day. Commit to getting out of the stands and on the field. Play the game. And you know what's so cool about real estate?

If you play this game, if you prepare for this game and, play it as if you were a professional athlete. I mean, if you prepare and train for real estate just as professional athletes prepare for their sport, and then you get on the field, you get on the court, and you play with as much intensity, I mean, play to win, you will earn a greater and longer lasting income than that professional athlete. How's that for perspective? I mean, that doesn't matter if you're Alex Rodriguez, if you're Kobe Bryant, or you're

a first day rookie in the NFL. because there's somebody up there that writes Kobe Bryant's check. You know how he made his fortune? Real estate. Mm-hmm. And my last note on Michael's experience, he's got a great story now, doesn't he? I mean, he can share that story over and over. And inside of real estate, those types of stories make you money.

They find you deals. No? Actually, they have deals delivered to you. Those types of stories, they attract deals to you. I mean, most people are so scared to do what Michael did that they're so impressed when they hear someone or meet someone that actually did it. And when they hear that they won, boy, forget about it. Most people look up to people, respect people, and give their business to people that aren't

afraid to get on the court and play the game. And when you actually win, all the better. And that's as true for your real estate investing as it is for negotiating a hotel room. Don't ignore the numerous lessons in here. They're invaluable. Okay, so let's get on with today's topic. Five steps to win-win negotiating with motivated sellers. Let me come down for a second.

I get so excited when I hear about success stories. All right. So five steps to win-win negotiating with motivated sellers. Okay, so let's imagine you just got a hot lead from someone in your network, or you just got a call off of one of your direct mail pieces, or maybe you knocked on a door of a distressed seller, and you've been able to establish that there is indeed motivation there. It doesn't really matter where you got the deal or how you got the lead right now with regard to this episode.

We've discussed that in the past several times. So today is what to do once you find the lead, specifically a motivated lead. Now you've made an appointment to visit the property. You knock on the door. They answer, now what, right? Okay, perfect. We're in the right spot. I've got five steps for you to work you through this.

Actually, I've got five leading questions. I guess they're steps or questions, but I've got these five leading questions that are going to run you through the steps, It's kind of like on automation. So I need you to memorize these questions. Okay, so you might want to get a pen, paper, or you might have to come back and listen to this later, depending on what you're doing right now. Okay, so if you commit to these five questions,

if you commit these five questions to memory, you'll naturally go through these five steps. Okay? So step one, you've got to build rapport. I cannot stress this enough. If there's no rapport, there's no deal. There's no negotiating. You've got to build rapport.

I mean, the heart of any negotiation is, the affinity and the trust you build with the other party. To build rapport with the seller, you want to ask relevant questions, and most importantly, you want to listen to the answers. I mean, really listen. You have to listen as if there's going to be a test afterwards. You have to listen until it hurts.

I mean, the fastest path to building rapport, the fastest path to being interesting to other people is to first be interested. So the seller answers the door, and your first leading question is, thank you for inviting me over, Mr. Seller, or Mrs. Seller, can you show me around? That's your first question.

Thank you for inviting me over. Can you show me around? Now, from here, you just want to walk around the house and look for stuff that you two might have in common. Look for places of where you can show genuine admiration and respect for the seller. And maybe you see a golf trophy or you see their college diploma hanging on the wall or anything.

It could be anything. And don't be all awkward or weird about your questions, okay? Just ask basic, genuine answers, because that's all you really want to know. Okay, you just, you want to know the answers to those questions because you're being interested, remember? Be interested. Your goal here is to make a friend. It's to create a connection with the seller and it's to ultimately develop trust.

And the key points of this first step is to focus on the seller, not the house, okay? Focus on the seller, not the house. Look for commonalities and mention them if they come up. give an authentic compliment or two. I mean, if it makes sense to, of course. And you'll probably spend, I don't know, five to ten minutes during this step. If the seller wants to take it longer,

if they want to draw it out, go ahead and let them. I mean, if they're talking, it's because they're comfortable with you, and that's what you want. Mission accomplished. You don't want to destroy that by rushing the process along. Okay, once that conversation has come to an end,

and you'll know when it does, you'll be ready for step two. And what's your intent for step two, is to set up what's called an upfront agreement. And this is a technique that I've used in all of my sales venture. So if you have a sales job, you might want to work this into your sales presentation if you haven't already because it works really, really well.

An upfront agreement or an upfront contract sometimes it's referred to is where you get the seller to agree that at the end of your visit, that they will let you know exactly where they stand. They're either going to give you a yes or they're going to give you a no. a yes being let's move to the next step okay a no is nope not for me the message that you're conveying when you put this in place is it's let's not waste each other's time if it's a yes i'm going to spend

as much time as we need to get the deal done but if it's a no i want to know right away because i've got other things to do i'm an important guy i'm busy and i know you've got other things to do as well that's what you want to convey with this upfront contract so your leading question there is where's a good place for us to sit so we can discuss this through that's your first question and the seller is going to direct you to a location, wherever that may be, might be in the backyard, might be at the kitchen table,

might be on the couch in front of the TV. Who knows? Once you've found a good place to talk, you'll present your upfront agreement. And it might sound something like this. Mr. Seller, I don't know if what we discuss is going to make sense for either one of us or not. But if we talk things through

and you determine it's not a good fit for you, will you please be straight with me and just let me know? That's your question. And I almost always get a yes here. Almost always. I mean, I know what? I don't think I've ever gotten a no. So yes, I can officially say I always get a yes here.

So once they give you a yes, you'll say something like, super or great. On the other hand, though, if what we talk about does make sense to you and it is a good fit, will you let me know that as well? You know what? And you'll always get a yes here also. I've never gotten a no here either. And then you can just kind of wrap up your upfront contract by saying something like, that's great.

And so you know, I'm going to extend you. the same courtesy. Mr. Seller, I promise to let you know when we're done today that if I want to move forward or not. And all I ask is that you do the same. Is that fair? And you'll always get a yes there too, pretty much. If they're ready to make a decision, if there's true motivation there, you're always going to get a yes. So there's your upfront agreement. Okay, your upfront contract. The goal here is to get a strong commitment from the seller that they will give you a clear answer, a yes or a no. You're not collecting maybys. Maybes are not an option. Maybe is just a slow no actually. So you want to get that yes or no by the end of the appointment. Nothing else is

going to do. I need a yes or I need a no. That's your mindset. And the key points here are always refer to your time with a seller as a visit or a conversation and not a negotiation. I know this is the five steps of negotiating with a motivated seller, but that's not what this is. It's just a visit. It's just a conversation. Okay. And then always start with asking if the seller would be comfortable telling you, no first and then ask for the yes second. That's important. You want to remember that. Always ask for the no first. And then once the upfront agreement is in place, you're now ready for step three. Okay? Step three is to establish the seller's motivation. You can't create a win-win negotiation unless you know what the seller actually needs to win. And to discover the seller's motivation, I have a very

simple question that I ask. So, what were you hoping I could do for you here today? Very simple question. most of the time you'll get the answer, buy my house. Not most of the time, probably nine times out of ten, nine and a half times out of ten. They're going to say, buy my house. And when I hear that, I then pull out my seller questionnaire. And I give you that exact questionnaire inside of my free real estate investing course at free real estate investing course.com, the one I announced at the beginning of the show. My actual seller questionnaire is there as a free download, okay?

And I pull out that questionnaire and I say something like, great, that's kind of what I thought you're going to say. And in order for me to do that for you, I have a series of questions that I need to ask. They're the same questions that I ask everybody. And I have them written down on this piece of paper and I read them right off the paper to make sure that I don't miss anything. I don't want to forget anything, particularly something that might cost you an opportunity or cost you some money. Is that okay? Okay, so I just got permission to read the questions off of my sheet. I don't have to memorize those. I just want you to memorize the five basic ones that are walking you through these steps.

Now, as you're going through these questions, don't lose sight of your rapport building. It's not over yet, okay? Now, this is more of the sensitive time, so this is where it's going to be critical, and if you built the rapport up right in the beginning, it's going to make this section that much easier. You're asking these questions

because you're really interested in the answers. Okay, so don't be in a rush. Be relaxed and act as if you do this all the time, okay? Because you do do this all the time. It's no big deal. That's your mindset. This is no big deal. I've got five other houses to go to after this.

That should be your mindset. Your goal here is to discover what the seller really wants. And if you're anxious or if you're nervous, they're not going to open up to you as much. So your goal is to discover what the seller really wants so you can give it to them. You can't create win-win unless you know what the other side needs to win. And the key points here are to just be relaxed and be interested.

And I do a roleplay of this in my free real estate investment. investing course. So you can see exactly how I do it when you go watch that. So step four, money. Okay. We're going to get to the bottom line now. And the leading question is, so what do you want for the property again? Just real curious, nonchalant. Okay. So what do you want for the property again? And then regardless of what they say, you mean, of course you listen. And when they're done talking, the next question is, okay, got it. So actually, what were you realistically expecting to get the operative word realistically? And change your tone on the word realistically. Okay, got it. So, uh, what were you realistically expecting to get? And then just

be quiet and listen. Nine times out of 10, you're going to get a price reduction right there on the spot. Just like our friend Mike at the hotel. He asked, he got. And the question, that question right there works more often than not in the exact same way. But it's not a $150 discount off a hotel room. We're speaking real estate now, right? And discounts come in the thousands. you have to recognize that you're negotiating has actual cash value, okay? Because discounts come in the thousands. If you're in my market, they can come into the tens of thousands. And once you've got that number, once you've got the number of what they realistically expected to get,

you can quickly go to step five to establish the terms. And when you're doing this, what you want to understand is the seller really wants the price, but you really want the terms. The price isn't all that important. It's the terms that really count. you might say something like this. I don't know if this is going to make sense to you or not. You're going to hear me say that a lot and get used to saying that yourself.

I don't know if this makes sense to you or not because what that actually is, it's a release statement. And what a release statement does is it makes it easier for the person on the other end to say yes. See, you're not going to get a real yes unless you give the person the ability to say no. And that's what a release statement does. And if you don't have to go and research release statements, it's a big giant sales technique It's an all-day training that I attended a while back, and it's worked for me extremely well. But what I always use is this, however, starting this comment or this question.

I don't know if this is going to make sense to you or not. And quite honestly, I don't even know if I could do it. But what if I were to make you payments for a period of time, and at some point down the road, I completely cast you out of the property? Is that something we should even talk about, or probably not? That's what you say. Now you're getting to the nitty-gritty. Now you're getting to the deal.

We ask that question. Is that something we should even talk about or probably not? And then, listen. The first person that talks typically is going to be the loser. So don't be the first person that talks. Just ask the question and shut your mouth. Listen. The goal here is to get a commitment from the seller that they like your what-if idea

without you formally presenting an offer that they could accept or reject, right then. Okay? If you get an acceptance to that, you can then start pinning down the price in terms of the deal. You can start narrowing your focus and getting to the actual number and the actual terms, of which I'm going to show you how to do that on the next episode. And actually, I'm going to share with you more than one way to do that.

But go back in and listen to this again. If you were unable to write those questions down because maybe you're on the treadmill or you're driving right now, go ahead and write those down. And I want you to practice those, okay? So, Mr. Michael Curry, if you're listening, this is the next step for you. I expect you to implement and report back your results. That's your homework. In fact, this is everyone's homework.

It's homework for all of you. Practice, drill, and rehearse this conversation and commit these five questions to memory. Keep it simple. If you get these down, there's not a whole lot more that you'll need to know about meeting with the seller. But getting good at this is the key to your business. This is where all the money is made. This is where the deals are created.

So until next time, as a very wise person once said, you have to learn the rules of the game and then you have to play better than anyone else. Extra credit, if you can email me who actually said that. All right? So get on the court and play the game. You can't win unless you do. Oh, and head on over to Epicproacademy.com

to check out what I've put together for you. All right, that's it. No more promotions from me for at least 20 more episodes, I promise. To your success, I'm Matt Terrio, living the dream. Thank you for spending this time with Matt Terrio and the epic real estate investing podcast. When you have a moment, stop by iTunes to leave your comments and let us know what you think of the show.

And if you haven't done so already, get started investing today by visiting free real estate investing course.com to access Matt's free course, how to do deals, no money required. Until next time. To your success. To your success. This podcast is a part of the C-suite radio network. For more top business podcasts, visit c-sweetradio.com.