find hundreds of books about the art of real estate negotiations ... But forgive my frankness, many of these books offer stale strategies and tactics that simply do not work.
For example, in many books you will find the ABC rule - "always be closing. "" That means you have a lot of deals in the works and you want to get to "Yes" as quickly as possible in order to conclude that.
However, to "Yes" ASAP you can a few steps in the middle, such as carefully pre-qualifying your prospect by many questions. (I call this process "" First Steps "no" first - that is, you eliminate those who are not seriously a deal).
It is also the reason why I simplified negotiations on three cardinal rules: the person who loses first prize, to know that your opponent before meeting with him or her, and always your consent in writing.
Negotiations Cardinal Rule # 1: The person who loses first prize
When I first started doing lease options, I had a woman call me to see if I have a certain kind of property which they then lease to own. She had $ 8K on its side, but unfortunately at the time, I had nothing in the inventory that meets their requirements. A few weeks later I found a house and called her over and told him that if they wanted what they saw, after a ride with what we could do that business today.
It ended loving ownership. We have the walk through and when she and I talked, I knew that $ 8K was sure money in my pocket.
"" Jim, "she said. "" I have a problem. Remember how I said I had $ 8K? The problem is I do not have $ 8K. ""
My heart fell clear to my stomach and my knees went soft. "" Uh oh, I thought.
They then went on to say, 'I do not have $ 8K, I have $ 10K. Is that ok? ""
Well, if I have my big mouth and said at the beginning of the negotiation talk, "" I need a check for $ 8K, I'd never learned she had an additional $ 2K in their pocket. The moral is - never is the first person to talk about price.
Instead, ask a lot of open questions you solid information to determine where people stand. For example, if I am in conversation with a person who looked for a house or a lease-option, I ask questions like, "" It sounds like you live in a great location. Why do you want to move? "" (I'm really asking is, "Are you a Deadbeat?")
Or, if I am sitting at a kitchen table and his courage spillage with me about his house, in foreclosure, I ask, "If you will be able to sell the property to what you would you be comfortable asking them? "" After the owners tell me first what he wants for which is so similar to me, which he shows his cards before he place a bet. In other words, it gives me the advantage.
Negotiations Cardinal Rule # 2: Find out more about your opponent before the meeting
One of the first things lawyers do in preparing to negotiate is a lawyer in the directory. They want to know what school the opposing attorney in what they consider the company if they have partners, etc. And if the lawyer for a larger company, you have the opposing attorney to your office to intimidate him.
The same - know that you're opponent - in real estate negotiations. For example, if you use a bank on a short sale, you should get to know the bank and its methods of operation and whether their employees are "user friendly" or they are a number of pit bulls. A bank I work with very confrontational and negotiations with them is like pull teeth. I learned very quickly that I access all my data, comparables, etc. and in his hand when dealing with them, because if I screw up I did not get a second bite at the apple.
Do you know your opponent is, what kind of person he or she is. For example, analytical or Number Crunchers people will want you to justify and document everything. Touchy-feely people, on the other side wants to talk about things.
To learn more about your opponent, you speak with people in your network, some online research (ie a Google search), and at your local REIA meetings - people love to talk and ask questions, and a good listener, You Make ensure that a couple of good "off the record" data.
Negotiations Cardinal Rule # 3: Always everything in writing
Although we all want to believe other people are good and honest, the sad truth is that disagreements can and in real estate negotiations, which is why you have all agreements in writing. This is particularly important in Massachusetts, where oral agreements are not enforceable.
If you have a verbal agreement, at least follow it with an e-mail or letter about the conversation and what was agreed to by each of you. If you use a bank on a short sale, send a fax to the quick with whom you spoke about something like "These are the parameters of the" deal "and that is what we are" and then the list everything in the interview. Make sure to sign and date and call the person to make sure he or she received your fax.
Develop your negotiating skills take time, but it is also worth the trouble. To negotiate your way to better profits, not blurt out price first to know, before your opponents in the negotiation arena, and everything in writing!
Interested in your own success, home based creative real estate business to invest? James has been helping people start successful home-based businesses over 16 years, and he can help you too! To see how visit http://www.JGage.com for the latest FREE tips and tricks, education and mentoring in creative real estate investing or call us @ 508-595-9567.
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Brendann
on วันจันทร์ที่ 27 กรกฎาคม พ.ศ. 2552
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