No, you need negotiating skills . . . - Posted by JoeKaiser
Posted by JoeKaiser on March 09, 2002 at 14:29:09:
While not completely irrevelant, “pricing” is the least of your concerns here. I think it’s silly to “submit an offer” in private sales such as this, and “silly” isn’t the word I’d really like to use here.
You will never know what the sellers will take until you sit down with them and sort things out. With two fourplexes, I know I could keep the conversation going for a couple hours, no problem. You see, my initial goal when meeting with sellers has little to do with nailing down numbers. Instead, I’m going for the “simpatico factor” . . . also known as “like me and trust me.”
If you’ve never done this before, you’ve missed the opportunity to put together deals that truly make sense for everyone involved. Blindly mailing a “fill in the blank” type purchase and sale agreement could never approach that.
There are things that make you money in this business (getting belly to belly with sellers), and things the get in the way (hammers and nails to name a couple), but nothing comes close as far as return on investment as does sitting down with the seller and just letting things develop.
That won’t happen if you show up and start talking about the darn four plexes.
Talk about the weather, talk about the RV in the driveway, talk about the price of tea in China, whatever, and at some point along the way the convesation will naturally drift back to the four plexes and by then, as long as you don’t say something really “silly,” . . . simpatico happens? (bumper sticker to follow - all rights reserved ;-).
Now, here’s the cool part. People like to do business with people they like to do business with.
Go talk to the seller. Leave the paperwork in the car for now and go see what makes them tick. Pay attention, spend more time listening than talking (and try to spend your talking moments focused on something other than you), and soon enough the guard comes down and deals can be made strictly on merit (once they’ve checked off the “this guy can be trusted” box, the fear factor goes away).
Of course, it’s not always this way. Every now and then sellers don’t want to play along. But the majority, by far, would feel good knowing their property is going into the hands of someone who, like themselves, understands the business and will take good care of the place while it’s under his domain. They’ll feel so good about it, in fact, that they may even go out of their way to make it happen. They get to the point where they WANT you to own it, and will bend over backwards to help you pull it off.
How cool would that be?
That’s how 6% long term owner financing gets accepted (Bronchicks 0% financing terms not withstanding . . . I should buy his course I guess ;-). That’s how deferred payment terms, graduated payments, balloon free notes, portable mortgages, etc., get written down on paper and actually signed off in practice.
Meet the seller. Do it on their turf (forget the nonsense that good negotiators need to be in such a degree of control that all negotations must be on their own turf . . . and while your at it, you probably don’need to measure the chairs to make sure yours is at least 3" higher). Give them a legitimate opportunity to sincerely like you and trust you . . . and good things will happen.
Simpatico . . . THE key to your success as a whiz bang real estate negotiator.
You asked about pricing . . . me, I’d be looking for the “family rate.” That’s the number they’d sell it to their favorite kid at. It might take longer than a couple hours to be on equal footing with the favorite kid, but in my experience, not much longer.