3 Negotiating Questions

[David Tower]

From a newbie building his business plan....

1. When meeting with sellers, do any of you bring a worksheet/powerpoint that highlights the negatives of trying to sell retail and the benefits of selling to you? I'm thinking, at least for me, that this will be a good idea so I don't forget anything.
I was thinking also of bringing a calculator and notebook so I can take the low comps price and show step by step, starting with that price, how we'd take off realtor commissions, closing costs, repairs, etc and wouldn't be far off the price I'm offering. Any thoughts or suggestions there?

2. I know that we're never supposed to give the first number. But when it is our turn to counter....what techniques do you use or what do you say exactly when giving your number? Do you qualify it by saying something "I only do deals that are win-win for everyone, but based on the risk/repairs I'm going to need to be at X" And is that number always a few thousand less than your best price?

3. What happens when your seller, who has no idea that you're wholesaling the deal spots your craigslist ad,bandit sign, etc marketing their house? I guess you could say something like "well I've got a few deals going on right now, and I'm just keeping my options open. I may want to assign the contract to another investor if I've got too much capital tied up"

thanks in advance!

[James Gefke]

Hi David,

While I am fairly new as well I have a couple of suggestions. Before breaking out the calculator and going through numbers and costs etc... you need to connect with the seller and find out their needs. What is the problem that you can help solve? During the conversation try and identify how you can help them out.

I would definitely discourage misleading or telling the seller something untrue. I am not suggesting that was your plan but typically I imagine you are offering to buy their property with no contingencies and settling with cash.

There is nothing wrong with citing the advantages with dealing with you rather than a realtor but again try and assess what their specific needs are and try to fulfill them. You may not even have to go there. Let them talk.

Know where you need to be with your numbers and I agree you should not be the first person throwing out a number but hopefully you will have been able to perform some prescreening so that you can tell whether or not they are truly motivated.

Finally, one thing you can ask them after you have built some rapport is "what are you going to do if you don't sell this property today?" This sometimes gets sellers to realize the reality of their situations and gets them to make a decision.

As far as wholesaling the deal you do not need to advertise that fact but if they ask you directly I would not lie and deny that would be a possibility IMHO.

Good Luck