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You can find a great property, in a growth location, and still miss out on positive cash flow because you weren’t able to negotiate a price and terms that worked for you.
If you’re not comfortable negotiating for what you want or if you’d simply like to improve your skills, I’d like to share some proven tips and strategies designed to help you tilt the odds in your favour!
There’s a good reason for the old adage “knowledge is power”…it’s true!
When you’re well informed you’ll make smarter decisions, your confidence will be reflected in your negotiations – the way you carry yourself, the way you speak… all of the subtle signs of a confident person will be evident.
You can achieve this result by doing a solid job on your due diligence. You must understand everything about the market and the particular property you’re looking at before even making your offer.
Understand the market
Due diligence will give you the information you need to negotiate from a position of power.
In addition to knowing where the market lies in its cycle, understand what the property you’re looking at is really worth and how it fits with your investment strategy.
Did you know that kinesics (the science of body language) has determined that individuals tend to behave in certain ways when they’re being untruthful (e.g. they might fidget more, or they may swallow hard before responding)?
It’s helpful to understand human nature when negotiating, so it’s worth the effort to learn to listen to both verbal and nonverbal cues.
Listen with both your ears and your eyes. Pay attention to body language, tone of voice, what’s said/not said, etc. to get a feel for the other speaker’s intents and motives.
Body language experts caution that you need a “baseline” when determining if someone is being dishonest. In other words, you need to observe an individual’s typical language and behaviour patterns before attempting to gauge the honesty of their interactions with you.
Asking simple, “non-threatening” questions, such as “tell me about yourself” or questions about their family, favourite sports team and the weather is a smart way to get a “behaviour baseline”.
Once negotiations begin, listen closely to what the other person is saying…and not saying…and you’ll often find the key that you need to successfully negotiate a deal.
Have a back-up plan
Things won’t always go as planned, so have a “Plan B” in mind if negotiations stalemate.
If you’re still unable to come to a satisfactory resolution with the vendor then call it quits. You have to be ready to simply walk away from the deal (not as a cheap stunt, but in reality).
Interestingly, if you indicate a true willingness to walk away from the deal, a resolution is often quickly found, however don’t always count on this to work.
Remember – your top priority should always be your particular strategy and your individual financial situation.
Silence is your friend
During negotiations, moments of silence can be unnerving to some individuals.
Use this to your advantage.
For example, if you’ve received an offer that’s not what you’re after, wait ten seconds before responding. You might be surprised at what happens next… especially if the vendor is anxious to sell.
Like to learn more negotiation skills? Book your seat now at our next FREE Property Investor Night and learn how to find and purchase the right deal at the right price, gain market insights to where the best deals are right now and much, much more.
Seats fill up fast, so book yours now!