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Hey y’all, Naomi here with some more handy tips on negiotiating your perfect property.
Did you know I have a renovation course? You can check it out here!
So, you’ve made it to the end. You can almost see the tools and dust on the other side of the sales line. You’re cracking your knuckles and doing warm up stretches. And brushing up on your communications skills of course.
I’ve mentioned a few times before how important those communication skills of yours are. From finding your A team and your B team, to getting friendly with agents for a good source of leads.
Communication is key.
In this final leg of the race, that is exactly what it is all about. After all, how can you get a good price without good negotiating?
Now this isn’t a bazaar, and I’m not expecting or telling you to haggle until your lungs give out. Leave that sort of negotiating at exotic markets of your next overseas trip.
Knowing how to negotiate effectively will set you up for renovating success. There are 4 things I have picked up over the years to make it a smooth-sailing process.
Don’t have time to watch? Listen to it on the go here!
1. Keep a straight poker face
This first tip is two-fold. The first part is about not giving away your emotions.
Picture this: you’re playing poker with your friends. The stakes are high. It’s all in. You’ve got a full house. Do you start grinning from ear to ear and flaunting your almost-win?
If you do, you might find it all come crashing down when the guy next to you swoops in with a straight flush and takes home the cash pool.
Properties are even trickier than friendly poker games. Learn to keep a good poker face and don’t give away your excitement. And just like in the poker match, if you reveal your final price too early, you might find the seller’s agent using that against you. You could then end up negotiating a buy price a lot higher than what you actually wanted to pay for that particular property.
The second part of this is not just hiding your emotions, but removing them altogether.
I’ve mentioned it before, but if you let yourself get too attached to a potential project, you might miss the bigger picture. And that bigger picture is your profit goal, which is the reason you are even looking at the property.
You might find a house that fits the bill perfectly. It’s in your patch, it suits your strategy, you know exactly who your target market is, and the renovation side of things is right up your alley.
Seller’s agents will tug on those heartstrings, and have a whole host of tricks up their sleeve to push you into jumping for their higher-price-than-expected lure. Don’t bite, there are plenty more fish in the sea that can fulfill your profit goals.
Be realistic, and point out the parts of the property that would reduce the inflated sale price. And I don’t mean criticise the property until the cows come home – that tactic won’t do you any favours either.
Just remember to keep your emotions in check, and play your poker hand without giving too much away. You want to find the middle ground between an overly excited puppy and the Grinch.
2. Find the motivation behind the sale
I talked about this one in detail a few blog posts ago. Where an owner who has nothing pushing them to sell might dabble and um and uh about your offer, a motivated one will take your offers seriously.
Is the property up for sale because the couple has just divorced? Or is it on the market because grandma can’t look after it anymore since her husband died? Maybe one of the kids has developed serious asthma and so the family is moving away from the city. Or perhaps it’s simply because they’ve bought another place and need the money from this one to settle.
Whatever the reason, it pays to know the motivation that is driving the owner to sell. The biggest ones are the four D’s: debt, disease, divorce, and death.
These strong motivators will give you the benefit of helping the seller while getting a realistic price for the property.
3. Be all ears
Communication is not just about talking. A lot of it is actually about how well you can listen to other people, and use that information.
Negotiating is a two-way street, and you need to be able to listen to what the agent and owner are saying in response to your offers. It’s not about telling the agent and owner what you want. If you make it all about you, the other side will be less inclined to listen. And poor listening skills means poor negotiating skills.
Think of it as an extension of your research. Up until this point, you have dug up tonnes and tonnes of research about your patch, your strategy and other properties in the area and how they compare. This time the information you gather will be the fine-tuned stuff specific to the property you want to renovate. Listening carefully will give you that extra insight.
4. Rejection is a learning curve
What doesn’t kill you makes you stronger, right?
If you get into the renovation business for the long haul, you will understand that not every single property that you go for will end up with you house flipping. Rejections to your offers will happen, and they are a normal part of negotiation.
Remember how my first tip was about keeping your emotions in check? Well always keep that in mind. Rejections may not be the nicest thing, but if you’re throwing an offer down on the table, the seller doesn’t automatically have to accept it. Sometimes your final offer is not enough to get them to budge. Maybe they weren’t motivated enough to sell.
Whatever the reason, each rejection is a chance to learn and hone your negotiating skills. It’s not an excuse to pack your bags and leave the renovating world before you even begin.
Just keep in mind that when you do make an offer, it’s not some sort of ridiculously low one that is way below market value. You wouldn’t walk into Harvey Norman and offer $50 on a top of the line fridge worth a couple of thousand, would you? No matter how motivated the owner is to sell, if you give them some sort of silly offer they probably won’t take you seriously. They may not even want to continue negotiating with you.
If you want your offer to be taken seriously, you should pull out a number that reflects that. You have done your research, and you know what the market value of the property is. So use those negotiating skills to pick your next renovation project and get cracking towards your profit goal.
Do you want to sell your property for more? Check out more of Naomi’s tips here!