So you want a deal, huh?
Good. That’s the secret to investing: money is made when you buy, not when you sell.
If you buy below the price the market is paying, you’ll always have equity. You always have some wiggle room. If the market starts to drop, you can exit fast (assuming that you’re not tied up in an option or something preventing the sale).
But how do you get a lower offer accepted?
There are 5 secrets that I want to share with you:
1 – Always build relationships. Never, ever underestimate the power of relationships.
You want people to trust you? Start by being honest. Tell the truth. Be honest.
Look people in the eye. Take the time to listen and don’t rush people.
This is especially important with older generations and cultural barriers.
There’s many examples of cultures (even within America) where it’s highly rude to talk about money – especially from the start.
Demonstrate courtesy and respect by getting to know the people involved and don’t just think of your purchase as a transaction.
People want to do business with those they like and trust.
2 – Be selective with your data. Again, I’m not telling you to lie – but you’ll have to find ways to present the data in ways that shows justification for a lower price.
Obviously, you want to include recent sales that drive the price basis down, and exclude those which show someone paying a higher price for a comparable property. While most sellers (and their agents) will demand that you include them, there are often reasons that can be mentioned to keep them separate.
3 – Paint a careful picture of reality
If you can find or create graphs, charts or other supporting images that help to present a compelling case for your offer, you should! It’s amazing how much of an impact visuals make.
You can always find ways to highlight aspects of the economic scene that create a sense of instability in your local market. Even in extremely hot markets, reasons for a lower bid can always be found. News articles about massive layoffs, plant closings, or anything with a negative economic consequence can definitely work in your favor here.
Your goal shouldn’t be to exploit the fears of the seller, but to give them real and credible information that supports your offer.
4 – The quality of your presentation matters more than the quality of your argument. As people, we make a lot of decisions based on appearance. This will come as a surprise to some, but folks with a lot of marketing experience recognize the truth here – people often buy products for the packaging.
Always spend extra on high-quality binding, report covers and graphic design. On a subliminal level some people will assume that because it looks good, the data is good. Others with a higher degree of skepticism will still be more inclined to seriously consider your offer if they understand that you aren’t just throwing out a random number – you have put effort into crafting a compelling case.
5 – Show no fear, but always be kind. The seller’s impression of you as a person matters more than anything. Don’t forget – you have a whole transaction to get through after your offer is taken, and you may need additional concessions along the way.
Small acts of kindness go a long way. Bring a small gift with you when presenting an offer in person – like some delicious chocolates or a small plant. If you can bake great cookies, great! It’s easier to get people to agree with you when you’ve fed them.
Plus, small acts of kindness are surprisingly disarming – and it’s worth a few bucks worth of cookies to save tens of thousands of dollars on a purchase.