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The top 5 lessons learned over thousands of negotiations
Investors who boast strong negotiation skills can gain the upper hand over their competition, securing stronger opportunities and saving themselves thousands.
Buyers Edge Property director Jason Titus said the current market had widened the gap between experienced and first-time investors, with seasoned buyers better positioned to weather interest-rate and market fluctuations.
“The people who have been doing it for a while see now as an opportunity,” Titus said on a recent episode of The Smart Property Investment Show.
He said one of the biggest differentiators for investors came in their ability to negotiate, with more experienced buyers’ experience paling in comparison to the professionals on either side of the transaction.
He said a good negotiator wasn’t defined by the number of deals they had closed, but by their understanding of the process as a whole.
“Knowing when to walk away, knowing how to get into a position to access the property exclusively and knowing how to get more properties than just the one of the agent makes me a good negotiator.”
Here are Titus’ top five lessons for negotiations.
Tell your story
Having negotiated over thousands of properties, Titus said that one of the most important parts of managing a negotiation came down to establishing a narrative.
“That’s what I always try to lead with in the negotiation, because I need buy-in from the agent,” he said.
While it was a necessary part of the negotiation strategy, Titus said there was no surefire way to spin a successful narrative, and it often depended on the agent buyers were working with.
He said being able to convey who they were and what their story was was “extremely important” to everyday investors.
How to appear stronger
Additionally, Titus said holding a calm position in a negotiation could make a significantly stronger case, which investors could do through their pace and tone.
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“If you’re talking way too fast, you’re erratic, and the agent can feel that,” he said.
“It could just be an energetic thing, but your pace and your tone should not be.”
To project calm in a negotiation, Titus often encourages his buyer’s agents to avoid inflecting at the end of a sentence.
He said that a deflection at the end of a sentence created the feeling that he was driving the negotiation.
Silence is your greatest ally
According to Titus, a small issue that makes someone a poor negotiator was the inability to hold tension in a conversation.
“The tension is where all of it happens. If I can’t hold the tension, I put myself on mute, so there’s a barrier.”
“That’s why it is so important. Put a barrier between you talking because the more silence you have, the more they’ll tell you.”
He said silence gives investors a better chance to uncover the “breadcrumbs” that could lead to a better purchase.
Additionally, he said investors shouldn’t show their hand early and should let negotiations develop.
“I don’t want to give a price point at all in the first chat. You can’t close a deal in the first conversation.”
Understand the market
Titus said another way for investors to show they were serious was to prove they had done their research.
He said that building knowledge as simple as reviewing recent purchases and how properties moved at various price points could show a real understanding of the market.
If they wanted to go the extra mile, Titus said investors could even look at the real estate agent’s recent transactions to gauge how likely they were to succeed with their purchase.
Framing the offer
He said that when presenting an offer, buyers needed to be careful about how they framed it to the agent and their vendor.
Titus said buyers should have conversations explaining their position, particularly if they discover potential issues with the property late and are trying to secure a lower price.
“Maybe that works 50 per cent of the time, but when you set it up like that, as I am going to get a quote and ask for that money off before we go unconditional, that’s pretty reasonable.”
Listen to the full episode here
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