When you’ve found a property you want you’re not going to pay top dollar – especially if there are good reasons to get the price down. To do this successfully you need to learn smart negotiation skills.
The Negotiation Transformer model uses Powerful Positioning to guide you through the negotiation process successfully. It uses the acronym SPEECH to help you remember the steps.
Select who you negotiate with and adapt your language to be congruent with their preferred style. If you can match your body language to theirs it will help them feel comfortable with you. Show confidence and empathy and you’ll be well on the way to a successful outcome.
This is not about where you stand, but positioning yourself as a professional business person who is different from competing buyers. This is about knowing the key phrases that will make the vendor pay attention. If they know you are not in a chain, don’t need a mortgage and can complete in 28 days, you’re likely to be a very attractive buyer.
People make decisions emotionally (even if they then justify it with rational reasons). Of course, the vendor wants sound reasons to accept your offer, rather than someone else’s, but if you are able to hit their emotional triggers, they’ll find those reasons.
First understand why they are selling and what’s important to them – and this applies to both the property owner and the estate agent, although they will have different emotional triggers.
Don’t accept everything you’re told at face value; enquire further. Ask questions, find out why the vendor is selling, ask whether they’re prepared to sell to cover their debt on the property. At the very least, it could start a discussion about what price they would sell it for. If they have a £100K mortgage and want £200K then they probably won’t want to sell for £100K, but might come down a lot if they have a strong reason to get the sale completed.
Using bridging finance effectively turns you into a cash buyer – or, at least, into someone who can buy like a cash buyer without the constraints of getting a mortgage. You can think, act and negotiate like a cash buyer and buy the type of property they do. You also make the higher profits they are able to make.
You should never claim to BE a cash buyer or your credibility could take a dive when they find out you’re not. However, the words ‘I don’t need a mortgage’ are very powerful to both vendors and estate agents.
If you pay more than you want to the only thing that suffers is your profit. If you’re aiming for £20K in profit and you pay £5K over your maximum calculated price – you’ll end up with only £15K in profit. So, know what you want, do your sums before you begin the negotiation and ensure you do your due diligence. Include the cost of bridging in your costs – so your profit isn’t diminished by that (bridging is not expensive if you’re not the one paying for it) and then stick to your guns!
Don’t forget to follow up on offers you’ve made – even if it’s been rejected. A property isn’t sold until it’s completed, deals fall through all the time and you could benefit from that, especially if the vendor just wants to get it done and dusted.
This is just one of the strategies I teach in my online Ninja Investor Programme and the live 3-day workshops. For more information check out the Ninja Investor Programme website.