Negotiation with Sellers in 2019 | They Know All the Old Tricks

Sellers know as much about negotiation as you, so step up your game. The old tactics no longer work so Grant reveals a creative solution using the hairy arm principal. Essentially, you can direct the transaction by adding planned negotiation points.

S1E3: Grant Teach me Something - Grant Kemp, Ryan Harper

Before you can negotiate, you need the leads and you need to know your numbers. Propelio.com is the real estate investors best friend. With fresh lead lists, national MLS data, accurate comps and a comprehensive library covering every real estate topic, you can conquer any negotiation with ease. Start your 7-day free trial at https://goo.gl/upR5aL

1:15 – Sellers are becoming better negotiators so investors must be ahead of the game. The hairy arm principal is best illustrated through the example of the photographer who always included part of a hairy arm in his photographs because he knew the editor would focus on cropping out the hairy arm, which is exactly where the photographer wanted to crop the photo. The hairy arm is essentially a distraction.
5:07 – You can employ this principal in the many real estate acquisition strategies. For example, with owner finance deals, you can get zero percent interest loans. I’m going to pay your equity in installments, and I am going to pay you interest on that equity. Spend the remainder of the time discussing the interest. Assuming the seller has $30K equity, I will pay it in installments and give you 4.5% interest, which comes out to $250 per month for 30 years, which means you will be getting around $50,000 with the interest. Watch Grant’s 10bii Calculator video -    • Lesson 4. 10bii Calculator - Make Money w/...  
6:50 – The hairy arm (distraction) could be the time over which the loan is paid. Most sellers don’t want to pay over 30 years, which opens the door to negotiate no interest with a shorter timeframe. Using another negotiating technique, reciprocation, meaning never give without getting, along with the hairy arm tactic, you can guide the deal to go exactly as you planned while making the seller feel they had all the wins.
12:25 – You need $30K, I will give that to you with 4.5% interest over 19 years, which ends up being $15K in interest, so you will end up getting $45K. Their response will likely be they need the payoff in less than 19 years.
13:44 – What you are telling me is that your priority is getting this paid off quickly? We can do that in 150 months (12.5 years)
19:49 – For Cash deals, the focal point could be the price, but the hairy arm could be the option period. You give them a low offer, hard contract with no option period. If they want more money, you can then use the option period, stating that could possibly give them more money, but you need 15 days to perform due diligence. Be honest with the sellers by telling them that this is a business decision for you. If you say you are there to help people, then trying to negotiate in a business way may confuse the seller.
25:49 – Write out all possible negotiating points and determine your absolute maximum allowable offer, including price and terms. Look at every item on the TREC and add your wants, and in a separate column, write down what you think the seller will want. Know the items on which you are immovable and which ones you are willing to negotiate with the seller. This is how you employ reciprocity when negotiating. If you give something to the seller, expect something in return.
30:55 – Most sellers know that the buyers will pay the closing costs, but if you start with only being willing to pay 50% of closing costs, the seller may state that other buyers will pay closing costs, which you can agree to do, but must have a longer option period or some other item that you can get.

If you are enjoying Grant, Teach Me Something - Make sure you save the playlist:    • Grant, Teach Me Something!  

Grant's Favorite Books to recommend:
Influence: http://amzn.to/2psvbb0
Traction: http://amzn.to/2kavg32
Follow Grant Kemp:   / grant.g.k  


Send Stuff to Grant, Ryan, &/or Propelio: 1224 W Arkansas Ln, Ste B; Arlington, TX 76013

Looking to streamline your real estate investing? Propelio has you covered! Start your 14-day FREE trial and access top-notch tools that simplify your real estate journey: https://www.propelio.com/?el=youtubeorg

Want to stay informed? Watch our latest episodes on Propelio TV and stay up to date with expert insights: https://www.propelio.com/?el=youtubeo...

Find us on Social Media!
Facebook:   / propelioapp  
Twitter:   / propelio  
Instagram:   / propelio  

*The assumptions, views, opinions and insinuations made by the host / guests do not reflect those of Propelio