The Art Of Negotiation
by Phyllis Rockower
The way to make deals in an atmosphere where there are so many other investors, means you have to do what others are not doing. If you only stick to the basic idea of reos and bank deals, you have lots of competition. So I like to dream up new ideas that only my students and I are doing.
When you deal with a bank, you have no choice but to offer the lowest price with no contingencies and a quick close.
However, when you deal with real people, you have many more choices. If the property is free and clear, I like to make three offers. The one with the least cash down has the best offer. The lowest one is all cash. The second one is owner financing for about six months so I don't have to go to a hard money lender. The last one is long term owner financing. Anytime I don't have to deal with a bank or a lender of any kind, I am happy. Even though I have my realtor search for owner financing in the MLSs, it can be difficult.
When you can't get to the owner, you don't know their situation and it is hard to solve a problem when you don't know what it is. Are they concerned with the amount of cash they get at the close? Are they more interested in the total purchase price? How much of the money do they really need right away?
I love to negotiate. In investing there are several ways to push the negotiation in your favor. There is total price, how much they get at close, when they get the rest and interest rate.
Here are the three
basic questions I ask in my negotiations:
1. What is the price?
2. Is that the best you can do?
3. Would you take?
There are so many ways to do this. The more strategies you have as an investor and tools under your belt, the more likely you are to make a deal when others can't.
Notes have not been a big deal in the last few years of fog a mirror loans but now when sellers are having a hard time getting qualified buyers, they are more open to being reasonable. This is why you need to have someone to go to in order to keep you apprised of the best way to make money in the current market. Remember, it's not about making deals, it's about making money.
I encourage all of my students to find the training and hands- on experience that helps them get on their own path to success. We are all at different levels and come from different backgrounds. You need to find the tools and the team members that don't have what you have. Many times, things aren't as straight forward as they seem at these boot camps and seminars. Having the resources in place so that you can find help when problems come up, is the only way to make your real estate journey successful.
The author is the President and Founder of REIC of LA. Reprinted by Permission from the R.E.I.C. of L.A. News. Published by the Real Estate Investors Club of Los Angeles. Phone: 310-792-6404 Visit www.realestateclubla.com