by Peter Conti
How many times have you put in all the hard work to find
a motivated seller only to walk away from the negotiation
knowing you could have done better? You did all your homework
and due diligence before you met with the seller, but still
you didn’t get the best deal possible.
I’ve watched hundreds of investors negotiate deals and find
that almost all of them (except the most successful ones)
chase the deal in the closing stages of the negotiation. This
means that they give the final power to say yes or no to a
deal over to the seller. These investors leave the negotiating
table knowing that they’ve missed out on thousands in profits,
but not knowing what they could have done differently.
If only they knew the two most powerful words in any negotiation:
"What if…?" "What if" is so powerful because
it commits you to nothing and commits the other side to everything.
For example, imagine you are negotiating a lease option
on a nice 3-bedroom house. You’ve done most of your negotiating
and your in the final stages of closing the deal. Rather than
making an "offer" like "Mr. Seller, I’ll pay
you x dollars for your house, instead ask a what if question.
"Mr. Seller, I don’t know if I could do this, but what
if I were able to pay you x dollars for your house, is that
something that would work for you or probably not?"
Notice the subtle difference between these two ways of making
your offer. When you make a formal offer you have given all
control over the deal to the other party. You’ve made an offer;
they get to say yes or no. When you qualify your offer using
the "what if" phrasing you aren’t really making
a formal offer. Yet once the seller agrees to your what if
offer, the seller has committed himself to saying yes! This
is your way of never making an offer until the seller has
agreed to accept it.
Think of it this way: Imagine you the Investor are a baseball
pitcher. The seller is the batter who is waiting for you to
pitch the baseball (the "offer".) Once you as the
pitcher have thrown the ball (i.e. made your offer) you have
given all control over the next step to the batter (i.e. seller.)
The batter can either choose to swing or not. Wouldn’t it
be nice to be able to fake throw the pitch to see if the seller
was going to swing before you ever released your offer? That’s
exactly what using this phrasing does for you, it commits
the seller to swing for your offer before you ever officially
make it. Only when the seller says yes to your what if offer
do you follow-up to close the deal.
To close the deal after the seller has agreed to your what
if offer try a phrase like, "So if I am hearing you right,
Mr. Seller, what you want me to do is to make you payments
for 5 years and then cash you out at the $275,000 we talked
through, is that right? It is… Well I’m not sure if I could
do that, but if I could do that are you sure that would really
work for you?"
Notice how you still continue to play the reluctant buyer
right until the very end and the agreement is finalized on
paper. You can even play out one more powerful technique here
at the end to make sure the deal closes—higher authority.
"Now Mr. Seller I want to make sure that before I ask
my partner to go along with this deal that you’re sure this
a fit for you and you want to do this deal. So you’re absolutely
sure that you feel this is a win-win deal? OK, in that case
lets put what we’ve just agreed to down on paper…" And
now you get to pull out your agreement and finish up the detail
Put this simple yet highly effective strategy to work in
your next negotiation and you’re sure to get a better deal.
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