On,
Negotiation
RULE 1: NEGOTIATE IN PERSON
RULE 2: NEGOTIATE PRICE, RATES, PAYMENTS, AND DATES
RULE 3: ASK QUESTIONS
RULE 4: BE PATIENT
RULE 5: BUILD TRUST BY BEING SENSITIVE TO THE SELLER'S INTERESTS
RULE 6: USE PRE-ESTABLISHED BOUNDARIES OF PRICE/TERMS TOLERANCE
RULE 7: THE FIRST ONE TO MENTION A NUMBER LOSES
RULE 8: KEEP IT SIMPLE
RULE 9: REMIND THE SELLER OF THE PROBLEMS YOU ARE SAVING HIM FROM
RULE 10: EXPLORE "STAB-IN-THE-DARK" OFFERS
RULE 11: PERSIST AND PERSIST AGAIN
RULE 12: TAKE TIME--TIME LESSENS TENSIONS
RULE 13: BE FLEXIBLE, BE CREATIVE, BE READY WITH ALTERNATIVES
RULE 14: STEP BACK AND GIVE YOURSELF A CHANCE TO THINK
How to practice negotiating
1. Get a copy of your local classified advertisements and find some prospects. With a red felt-tip pen, circle all the singlefamily homes or small commercial buildings that are for sale by owner, particularly if the ad indicates that the seller is anxious to sell.
Watch for "low down," "fix-up special," or "leaving town"; there are
many other phrases that should alert you to possible seller flexibility.
Virtually every ad that specifies a down payment of $2,000 or less
will be a good prospect.
2. Choose the five most promising ads. Eliminate all but five of the properties, based on your own criteria. Maybe you don't want to own a former laundromat, or perhaps the south side of town is not what you have in mind. Made a list of your criteria, and use your own list to eliminate all but five of the ads.
3. Investigate the properties. Begin by driving by the five properties. Are they appealing? What is the neighborhood like? What kind of people live in the neighborhood? What's the current zoning? Does the town have an area plan that may change that zoning in the near future? Would the change be to your advantage?
Find out enough about each property to intelligently decide whether you want to keep pursuing it.
4. Narrow your choice to two properties. Keep asking questions, and don't be afraid to get into detail. Interview neighbors, officials at city hall, and area Realtors to uncover everything you can about the properties. Narrow your choice to two of the properties.
5. Arrange for an interview with the owner of each. Call the owner of each property and explain that you are interested in talking to him about the property. Set a specific time and date; remember to allow yourself plenty of time for the interview.
6. Do your homework. The day before the scheduled interview, read through this unit again, using a yellow marker to highlight information that's important to you. Then make a checklist of everything you want to find out about the property. Clamp it boldly to a clipboard and approach the interview with confidence. Remember, the seller invited you to come by virtue of his ad in the paper!
7. Conduct the interview. You are a welcome guest, but remember: your seller will probably be a little nervous. Start out by establishing a rapport and putting him at ease. Take your time; there's no hurry. Ask the questions about the property directly from your checklist; if the seller seems impatient, apologize for the time you are taking but point out that each property has unique characteristics, and you want to be certain you make the right
choice. Find out why the seller is selling--and try to get to the real reasons. If you have a truly flexible seller on your hands, he will probably have some very definite problems that he hopes to solve by selling his property. Make note of them in writing at the bottom of your checklist.
Conduct this same interview with the owner of the second property you have selected. Do not make any offers; remember, you are just practicing for now. If the owner seems anxious, tell him you are looking at a number of properties, and are in the process of assessing each for potential purchase.
8. Identify solutions to the sellers' problems. In the privacy of your own home of office, go over the questions you asked and review your assessment of each owner's problems. Using a separate sheet of paper for each property, draw a line down the center of the piece of paper. On the left side, write each problem the seller has. On the right side, list three or four ways you could solve that problem. Use this unit to spark your imagination, and think of your own creative solutions in addition.
9. Conduct an imaginary negotiation. With your problem/solution sheet in hand, begin an imaginary negotiation session--starring you as your own "devil's advocate!" First, write what you would offer the seller. Next, jot down what you think his objections would be. Then come up with new terms or perspectives that would soothe his objections. Continue this process until you can't think of any more reasons why a seller would balk at your offer.
)
