I don’t like showing a written list of comps, it usually blows up in my face.
Face it, if you were selling a property and I came along and showed you all the sales in the neighborhood are approx. $100k. Then I give you an offer of $60k, why would you take it?
I pretty much tell them that I am the man to do business with. Be professional and sincere but firm. Explain that you can get them what they need before you can give them what they want. If they want a certain price, you get the terms.
If they want cash, they get my price. If they want their price, they get my terms.
but first, I’d like your input on what some of the most common objections you get from both buyers and sellers. I close car deals every day as well as homes and rentals and have heard quite a few of them. This will also help me brush up my skills.
Shawn,
I do negotiating professionally and here are some resources I have found helpful: books: Getting to Yes, Getting Past No, and The Shadow Negotiation. All come out of the Harvard Negotiation project (see them online). The focus is getting want you want in a way that leaves everyone satisfied. The techniques have been used by Jimmy Carter with Middle Eastern leaders, Colin Powell, etc. I use them at work everyday, and I’d be sunk in a political mire without them.
Only one objection at a time, let’s hear um! - Posted by $Cash$ (NV)
Posted by $Cash$ (NV) on May 31, 2003 at 15:32:06:
Shawn,
If you are getting objections where did you go wrong when they first came on the lot. LOL
Yes, I would think the folks here on Creo would like to hear how to overcome objection, how about this idea have them post the number one objection they get, only one at a time then you could reply. This would keep you on your toes, if you get stuck (don’t think you will) the ole cashman has a few aces up his sleeve to help.
I would like to read your article on negotiating - Posted by Kristine-CA
Posted by Kristine-CA on May 31, 2003 at 12:45:51:
Shawn Dostie: I think negotiating is my number 1 weak spot in REI. I get the phone ringing, I get sellers that want to sell, but I am pretty hopeless in the negotiating department.
Number one objections from sellers? Their perceived value of the property. Perception is based on God knows what, but certainly not comparables. I work with mostly total junkers that need major rehab and the sellers are either 1) not the sharpest tools in the shed or 2) think I was born yesterday.
I wouldn’t mind so much if the sellers stated want they wanted for the property. (But I still wouldn’t know how to deal with them.) But what really shuts me up is when they start spouting off about the value of this, that and the other thing. I’m not going to spend anytime convincing anybody about anything, so I just tend to ignore their opinions. Which I am sure shows.
Number one objection from buyers? I rarely have any objections from my buyers. They always pay my asking price and mostly on my terms. So that must mean I’m selling for too little!
Thanks for contributing on this very important topic.
I picked up a couple tips from “How to Negotiate Successfully in Real Estate”, an old book by Tony Hoffman.
The 4-point maneuver:
a. Restate the objection: “I can understand your feeling that this house must be worth $120,000, since you’ve lived in it so long and have grown so attached to it.”
b. Answer the objection as fully as you can: "However, my research shows that 3 other houses in this area sold within the last month in the range of $90-95,000, and they were all recently renovated, newly painted, and had professional landscaping. I’ve had these improvements priced, and it will cost between $8,000 and $10,000 to bring this house up to that level. So I have to stay with my offer of $84,000.
c. Ask a closing question: "Would you prefer tomorrow at 2 or Friday at 4 to meet with the realtor and finish up this paperwork?
d. Shut up! If he accepts your reasoning, you’re done. If he raises another objection, repeat steps 1-4. Also, in asking the closing question, give him 2 choices, both of which will be good for you. Make sure you think before you speak, make sure you have 2 good alternatives to offer.
In negotiating terms, never compromise. Always give in and ask for something else. Example:
Asking price is $100,000, seller is willing to carry a note for $10,000, 5 years, 10%.
You offer $80,000.
He counters with $95,000.
You offer $85,000.
He counters with $90,000.
Do you settle at $90,000 then? No! You give in and ask for something else. "Well, you win, you can have $90,000, but you’ll have to carry the note for $20,000.
He counters with $15,000.
Again, don’t settle. “Okay, you can have $15,000, but you’ll have to carry it for 10 years.”
He counters with 7 years.
“Okay, I’ll give you 7 years, but you’ll have to make it 8%.”
Each time, you let him win, and you ask for something else.
Kristine, you said negotiating is your #1 weak spot. This should be your #1 STRONG point! If I could make a suggestion, you should buy an inexpensive book by Roger Dawson called “The Secrets of Power Negotiating.” It’s available on this site with tapes, but the book is available at other bookstores.
Roger is an excellent writer, and I promise you will be surprised how easy it is to negotiate from a power position. I also promise you you will close MANY more deals. It will be the best $15.99 you’ve ever spent.
If they are asking the overpriced 120K, I show them retail comps at 100K but these comps are properties that sell with Realtors and are in great condition. They already know their house needs fix up and that using a Realtor will mean closing costs and commissions and a 30 to 60 day wait time. Also, if you can find some comps for fixer uppers that show the wholesale prices are at 60K that’s even better. I’ve bought many a house this way.
It’s alot easier to get someone to drop their price 20K by showing them facts of what it’s really worth, then for them to come down 20K because they think you are a nice guy and a professional person.