The quality of deals you do depends on your ability to negotiate successfully. There’s more to a deal than simply making an offer, it’s a lot to do with how you are perceived by the vendor or the estate agent.
I use a six letter acronym to help property investors to develop their ability to make better deals – with more profit in them. This spells SPEECH.
Select your approach to match the person you’re dealing with. With an estate agent you would be more open about the state of repair of a property, with the current owner you will probably want to be more circumspect.
You’ll need to appear confident and that can take practice if you’re not naturally a forthright, outgoing personality. The way you look – from the expression on your face, the way you stand, your eye contact, handshake and even the clothes you wear – influence people’s impression of you.
Positioning is about making sure that the other party is clear about your ability to see the deal through. What you say will influence this. You need to make it clear that you:
This puts you in the position of a serious investor who isn’t held back by all the usual challenges facing a buyer.
Human beings make emotional decisions and you need to learn how to use emotional triggers to get the decisions you want.
For instance, instead of saying ‘I can exchange and complete in 28 days or less,’ (logical and factual statement), with ‘The money can be in your bank account by the end of this month’ (emotional and motivating statement), can tip the balance with a vendor.
If you’re dealing with the estate agent, their priorities may be different and you need to choose your language in accordance with those. So if you’re dealing with a member of staff, you might say ‘This could be one of this month’s completions’ or, if you’re dealing direct with the owner of the estate agency you might talk about money in the bank by this time next month.
If you don’t ask, you don’t get! Find out what’s important to the vendor by asking questions. For instance, ‘Are you prepared to sell for what you owe on it?’
Ask about the reason they’re selling ‘This is a nice house, why are you selling?’ Then use the answers you get to find the negotiation field you’ll be working in – where what you’re prepared to go to and what they’re prepared to come down to overlap.
You don’t need a massive bank balance to buy property like a cash buyer. If you know how to use bridging finance you can operate like a cash buyer – and that means you’re in a position to negotiate better deals.
You can complete quicker, you aren’t subject to the mortgage process and, when you’re dealing with a motivated seller, that can be a big advantage.
Don’t pay more than you’ve planned. Every pound you add to the cost of purchase comes out of your net profit! So:
If they won’t sell at your price; you can’t buy at theirs.
Discover the power of positioning and you’ll negotiate much more profitable deals.