Negotiating Tips

You don't need to be an expert negotiator to negotiate successfully. The point of this is to teach you some useful tips and tricks to help you negotiate better. The reason we need to know how to negotiate is that everyone (including you) likes to negotiate to some extent.

Here are a few tips and examples to follow:

Don't Give Away Anything without Asking for Something in Return

This tit-for-tat technique helps ensure that even if you are giving your tenant-buyers a key aspect that they want, you are getting something in return. A good way to handle this is either with a question, "If I gave you the $5,000 in option credits you are asking for, what do you think is a fair exchange for that?"

Or, you can ask for what you want, "If I give you the $5,000 in option credits you are asking for, I would need for you to agree to a price increase of $1,000, plus be responsible for any repairs that are necessary during the lease."

By asking a question, you give the tenant-buyer a chance to voice what they think is a fair exchange for what they are asking for. It may turn out to be MORE than what you would have asked for. If it isn't enough you can always negotiate up from what they propose.

By stating what you want, you are more limited. The tenant-buyer may even try to negotiate you down from that position. However, if there are a few key things that you really want out of the negotiation, this is a good time to go after them.

Wendy's Wisdom: Just a reminder again that most tenant-buyers will not try to negotiate much. I just want you to be prepared in the event that you do need to negotiate.

Last Minute Add On

This trick is used to capture small concessions at the last minute after everything else has been agreed upon. The idea is that once you are already emotionally invested in the deal, you don't want to let it go over just a couple of little things thrown in at the last minute.

There are a couple of effective ways to counter this technique:

1) Say no. At this point the tenant-buyer is likely just as emotionally invested in the deal as you are, and isn't going to walk away from it if you won't give in on these last minute requests. Hopefully, you also have everything in writing, signed and the deposit in hand.

2) Counter by asking for something in return. This is the tit-for-tat technique that will allow you to meet their last minute request if they are willing to give up something in return.

This type of situation is more likely to occur with questions or requests after everything is signed. For instance, "Can we put our stuff in the garage a week early?", "Can we move in on the 28th versus the 1st since it is a weekend?", or "Can we start to paint the master bedroom before we move in?" I will usually try to accommodate these requests if I can, especially if it doesn't affect me either way. I will usually let them move in or get in early if possible. In this case I might give them free rent for those days, but they must have paid their entire balance in full to move in. I then request they also put the utilities into their name on the day they want to move in. Sometimes I even suggest this approach after we have agreed on everything. I do this so I can then reduce my expenses of utilities for a few days. Of course, all of the paperwork would be signed, as well.

Wendy's Wisdom: Remember, most tenant-buyers won't be very strong negotiators. They typically negotiate most with the option fee and accept most everything else.

Excerpt taken from Rent-To-Sell: Your Hands-on Guide to SELL Your Home When Buyers are Scarce Chapter 13, Pages 155-167