Saying “Yes” to the first proposal
from the sellers will automatically trigger
two thoughts in the seller’s mind:
1. I could have done better.
2. Something must be wrong.
I once bought 100 acres of land in the
state of Washington. The sellers were
asking $185,000 for the land and I felt
that if I could get them down to
$150,000 it would be a terrific buy. (I
don’t recommend bare land as an
investment. It’s more of a speculation
than it is an investment.) I asked the real
estate agent to present an offer at
$115,050. By picking that price, I was
using these two negotiating principles:
1. Specific numbers have more credibility
than rounded numbers.
2. Bracketing your objective assumes
that you will end up midway between
the two opening negotiating positions.
I knew that I was making a very low
offer and thought I’d be lucky if the sellers
responded at all, but to my amazement,
they accepted the offer. What
was my reaction? Something must be
wrong! I suddenly wanted to take a very
close look at the preliminary title report
when it came in. My second thought on
that land in Washington was, “I could
have done better.”
Those two thoughts will go through
anybody’s mind whenever you say
“Yes” to the first offer.
Imagine if your son came to you and
asked to borrow your car tonight and
you said, “Sure. Take it. Have a wonderful
time!” Wouldn’t he automatically
think, “I could have done better? I probably
could have gotten $10 for the
movie out of this too!” And, wouldn’t he
automatically think, “What’s going on
here? How come they want me out of
the house?”
What does this teach you? You
should always go through the process
of negotiating because you want the
other side to feel that they won. Never
say “Yes” to the first proposal.
Note: Always make your offer to buy
real estate subject to your approval of
the preliminary title report. That’s important
because anybody who previously
owned the property could have put a
restriction on its use. I was once looking
at a property that would have made an
excellent shopping center development.
When I checked the title, I found
that a former owner had put a restriction
on it that there could never be any
liquor sold on the property. That nixed
the deal because a liquor store not only
builds traffic, but it is also a big money
maker when leased on a percentage
basis.
Source: Adapted from Roger
Dawson and Mike Summey's audio program The Weekend
Millionaire’s Real Estate Investing
Program.
Learn more about Roger Dawson
and his bestselling audio program The
Secrets of Power Negotiating.
