Time is the greatest asset you have in business. If you can focus on doing tasks that will net you the biggest returns instead of wasting time throughout your day, you will get a lot more accomplished. This is especially the case if you are dealing directly with sellers. You can do the dance and go back and forth for weeks without getting any closer to getting as much as an accepted offer, let alone a closing. Instead of wasting time on sellers that may not be motivated to sell or may need a little push, there are a few questions you can ask in the first conversation that will save you time.
The first question you need to ask any seller is “why are you selling?” This may seem obvious and maybe even a little direct, but the sooner you can find out seller motivation, the sooner the negotiation can really begin. The answers can range from foreclosure to a death in the family and a myriad of other things. It is important that you listen to the answer because it will give you clues as to how the rest of the process will go. If they tell you that they are looking to get out by the end of the year, you know there is little motivation to sell and you could be looking at an unrealistic asking price. If they are four months late and looking to avoid a foreclosure, you may be able to sense the urgency and a deal should happen much quicker.
After you find out the why, your follow up question should reveal the when. The real estate market can change literally every month. Every time there is a sale in your area, it will have an impact on any future sales. Motivation also has an impact on the selling price and time-frame. If the seller needs to close in five days, they will have much less leverage and be willing to take less to close quickly. Conversely, if the seller is just dipping their toe in the water, there is no pressure to sell until and unless their price is met. If you can find out the why and when you are well on your way to making a deal happen.
The final hurdle is arguably the hardest to find out – the price. Each side may have a number in mind before a meeting is even set, but you need to make sure you can justify your offer. Listen to what the seller thinks is fair and if you disagree be prepared to counter with comparable sales or dings with the property that lower the value. You never want to push too much or go overboard with disparaging comments about the property. You need to remember you are still dealing with a real person who never has to sell to you. It may be in their best interest, but they don’t have to. If you get a price, you should ask them if they would accept your counter price in cash and on a specific closing date. Give them a day or two to think about it ,but schedule a definite time for you to meet again. The longer you go without an answer, the more difficult agreeing becomes.
Negotiating doesn’t have to be a stressful situation in which both sides are exhausted at the end. Prepare yourself with reasons why you think your price is fair and if you can’t strike a deal, part as friends and follow up a few weeks later. The more you know about your seller, the more likely you will get your offer accepted. Ask the right questions and listen to the answers.
