You can get a much better price from
the seller of real estate — and a much
better result in any negotiation you
engage in — if you remember a simple
but powerful rule: Ask sellers for more
than you expect to get.
Henry Kissinger, one of the top international
negotiators of the 20th century,
once said, "Effectiveness at the bargaining
table depends upon your ability
to overstate your initial demands." Note
that he says "ability." In other words,
how well you can do it.
This is a critical principle for many
reasons, the most important of which is
that you are creating an environment in
which sellers can have a win as well as
you. If you make your first offer your
best offer, you have nothing left to give
sellers to let them feel they won something
in the negotiation. That is one of
the key objectives in Power Negotiating
— make the sellers feel that they've
won too.
There are also many other good reasons
to ask for more than you expect to
get in a negotiation:
You might just get it. This is obvious
if you're a positive thinker. The sellers
may just take the low offer! The only
way you'll find out is to ask.
It prevents deadlocks. If you are
dealing with sellers who are proud of
their ability to negotiate, the negotiations
will deadlock unless you leave
room for them to have a win with you.
Let's say that the sellers are asking
$100,000 but they've been trying to sell
the property for several months and
haven't had an offer anywhere close to
that amount. Now they need to sell and
might even be willing to accept
$85,000. If you make them a take-it-orleave-
it offer of $85,000, the sellers will
be reluctant to accept it because it
would make them feel that they lost.
Offer them $70,000 and let them negotiate
you up to $85,000, and they will
feel much better.
It gives you some negotiating
room. You can always go up on an offer
to buy, but you can't go down. Giving
yourself some negotiating room makes
it easier to get what you really want.
This simple rule is probably the most
consistent of all the negotiating principles.
Track every negotiation you've
ever been in and chances are, the more
you asked for, the more you got.
Source: Adapted from Roger
Dawson's audio programs The
Weekend Millionaire's Real Estate
Investing Program and The Secrets of
Power Negotiating.
Learn more about Roger Dawson and his bestselling audio program The Secrets of Power Negotiating.