Desperation always generates great power.
– Stefan Zweig
When you have completed all necessary due-diligence, you have listened to the other person speak first, when you’ve listed to what they are saying and not just to whatever they say and you’ve determined what you will pay, you must stick with that number.
I own mobile home parks, an assisted living community, and I’ve flipped and I am currently flipping multiple single family homes across the country. I never pay more than the property is worth to me. In order to do this, I must be completely emotionless. I may not throw out my maximum offer immediately, but I never offer more than the maximum threshold I have established. Emotions cloud objective merits. People may use invisible time restraints to sway your judgment. Time tends to be my best ally when negotiating. The person under time pressure tends to give more concessions.
If you’d like a quick crash course on this, study a small child interacting with their parent in the store. The girl asks, “Daddy, can I have candy?” as she’s already reaching to put the candy inside of the overfilled grocery cart. The father quickly counters his child’s offer with redirection as he reaches past his daughter for a hand full of the grapes that he’s about to purchase. “No!” the toddler shouts, and pokes at her father’s emotions. Now, people are starting to stare. The father gives a little more ground as he remembers that Halloween was a few weeks back. “I’ll give you some candy when we get home honey. Remember your Halloween candy?” “No! No! Candy now!” the little girl shrieks as the tears begin to flow. The man’s final rebuttal is shot down. The father quickly grabs the candy and throws it back in the basket to prevent further confrontation. The father just wants to get out of the store as quickly as possible and his time deadline is crushing his power to negotiate. Not to mention the embarrassment he is feeling of every one witnessing his daughter’s meltdown.
My team “The Deal Funders” are making offers on thousands of properties using this key principle. This enables me to not have to view properties or even look at listings for any of these properties until our offers are accepted. I know you may be thinking, “How do I know what I’m buying if I don’t see it?” Proper research. Using specific criteria and calculations we are able to work as a single unit to put in multiple offers on multiple properties. This guarantees an emotionless negotiation process. If the bank or owner of a specific property isn’t willing to meet our threshold we will wait for time to apply the pressure needed to create more desperation.