Today’s episode is the last installment of a 3-part series hosted by exceptional coach and prolific wholesaler Todd Toback. In the show, Todd shared 7 of the most effective techniques he has used to negotiate the best possible price for each deal. Why is this important? Because the better the price you can negotiate, the larger the profit you’re going to make! If you need evidence the techniques work, remember this: they’re used by both Todd and Tom Krol and they’re two of the best (and most successful) in the industry. So basically, that’s all the proof you need! As usual, today’s show is loaded with many gold nuggets so you better have a pen and paper handy. You’ll also need to jot down several proven techniques and tips so make sure you give today’s show your undivided attention!
MARCH CONTEST ANNOUNCEMENT!
For the entire month of March, Wholesaling Inc is running a Ratings and Review contest! We’re going to fly out 3 lucky winners to Florida, paying for airfare and hotel, to spend to full days with Tom Krol! Whether you are trying to land your first deal or scale your existing Wholesaling business, Tom is going to help you crush your obstacles and achieve your goals! And the lucky winners will all be featured as guests on the Wholesaling Inc Podcast!
To enter, you must Rate and Review the Wholesaling Inc Podcast on iTunes (5 stars please:) and send a screenshot of the Review to Darrin at email@example.com. 3 winners will be chosen at random and announced on the Podcast in April! Good luck!
How To Meet, Negotiate With, And Close Motivated Sellers (Part 3 of 3)
This is the third episode of a three-part series on how to talk to negotiate and how to lock up deals with motivated sellers. In this specific episode, I’m going to talk about seven ways to negotiate a lower price with your sellers. I’m going to get granular here and talk about seven specific techniques on how to get the best price possible. The better the price that you can get, the larger profit that you can make.
If you have not read the first two episodes in this series, this episode can stand alone. You don’t need to listen to those first two episodes, but I highly suggest that after you’re done, read episodes one and two of this series on talking and speaking and negotiating with motivated sellers. Also, if you want more training on this topic, go to ClosingSellers.com. I’ve got a free video series there for you all about talking with motivated sellers, getting over your fears, getting in the right frame of mind, negotiating big spreads, all the way from that first contact to negotiating the middle, to getting that contract signed and making sure it sticks.
Let’s hop into the seven techniques. I remember when I first got started, locking up deals with motivated sellers, I didn’t know any of this stuff. I was nervous and I always thought the seller was going to think I was going to be a fraud or I needed some special training. I was scared. The more that I realized that I had to focus on my craft, the more I did. I studied, devoured and trained myself. I became more confident and started to nail these things down.
Since then, I’ve locked up over 1,000 wholesale deals here in the most competitive market in Southern California. I’ve trained more successful wholesalers than anyone on the planet. I’m also Tom Krol’s brother, who’s the founder of the Wholesaling Inc. podcast. A lot of the stuff that we talk about is stuff that I taught him when he first got started. That being said, I know what I’m talking about. I’ve also been where you have been.
Confidence comes from keeping small promises to yourself.
Remember, there are three main points that I want to get across. Number one is that locking up wholesale deals is 100% about converting deals about sales skills, knowing how to negotiate the best price possible and making it a win-win solution with the unit seller. Number two is that sales, acquisition, negotiating, persuasion, or influence, whatever you want to call it, is a learned skill. It is not a natural-born talent. If you think it is a natural-born talent, you are hurting yourself. You must understand that the skill is built and crafted over days, weeks, months, years, and decades of your constant attention to this.
Three is that you must commit to doing the work. I would start with podcasts. I would also go to ClosingSellers.com, watch the videos, and dig in. I love to hear your stories. By the way, if you’re reading, or you want to put something on the Wholesaling Inc. Facebook page, tell us a story, a deal, or an example, a video or whatever. Share something that you got from one of these episodes in the Wholesaling Facebook group. I would love to hear it. I love your stories and how it helped you.
There are seven techniques for locking up and negotiating a better deal with the seller, coming down and negotiating the better price possible. By the way, I’ve locked up deals. I started out with deals $25,000, $30,000, $40,000, $50,000, and then I started to push them up, $100,000 deals and even deals over $200,000. You don’t think it’s possible? I’m telling you, it can be done. Some of this is market-specific, but whatever it is.
I’ve had clients double their deal size by understanding this. Your posture, attitude, confidence, aura, swagger, whatever you want to call it, that thing about you that protrudes truth confidence is one of the secret weapons of people who lock up large deals. Confidence comes in many different forms. You can be quiet, non-boastful, nondramatic, and serious about your ability to get a deal done. That’s one personality.
You could also be friendly and say, “I like to buy your house, but I have to make a profit. Do you think you and I could come to a win-win solution where you could get done and I could buy your house?” That’s the person who’s got that personality. It doesn’t matter what your personality is. The aura is one of confidence. How do you get it? How do you keep it? How do you protrude it?
Number one is that you cannot put the chicken before the egg once you start practicing your skills. Once you start practicing and role-playing and using these techniques in the mirror, every day before you get on the phone, you will get more confident. Practice will bring confidence. Reps will bring confidence. Gameday performance will give you more confidence. The more you do, the more you practice, the more you refine, the more you listen to a recorded call between you and the seller, your confidence is going to go through the roof.
Commit to it. Your posture will start to change. The other technique that I’ll tell you is to start to use the truth-teller, truth seeker method. If you look a seller in the eye and say, “I can’t pay retail. I’m an investor. I have to be able to make a profit. You’re going to need to exchange that for some speed and convenience, or you’re going to need to exchange equity for speed and convenience. I’d love to be able to do business. If you can’t, that’s okay. We can remain friends. I have three names of agents I could give you. They’re probably better off working with you.”
Be a truth-teller, truth seeker. Don’t be scared of the answer. That’s one way to develop posture inside your business. Let me talk about how to develop posture overall in your life so that it will translate. Confidence comes from keeping small promises to yourself. If you tell yourself you are going to work out 5 times this week and you do that all 5 times, we have what you call personal integrity. If you tell yourself that you are going to make 20 calls every day or 3 days a week, and you do that, that is personal integrity.
One of the differences between performers and non-performers is confidence in themselves.
If you make small promises to your kids and you keep those promises, that is personal integrity. You start to become a superstar in your eyes. You keep promises. You do the hard stuff. You do the work when you don’t feel like it. When you do that, you get the swagger. One of the differences between performers and non-performers is confidence in themselves. If you don’t have it, that’s okay. Get it by keeping small commitments to yourself and practice every single day.
Number two, getting specific in how to negotiate larger spreads is price condition. I talked about this in the second episode. You always want to communicate that you are willing to do business, but you have to make a profit. There’s a little technique that I will talk about here. When you meet with a seller, what you want to do is use this constantly throughout the process. You say, ” I may come out there. I may not be the highest but what I will be is the most forthright. If I can do the deal, I will tell you. If I can’t do the deal, I will also tell you.”
Let them know the low numbers of sales in the area. Let them know the high numbers. Tell them that you’re probably going to be on the low end. I’m going to give you a little trick here. Sometimes you will meet with a motivated seller and you will do the price condition. For whatever reason, something doesn’t work out. This is the third one, but I’m going to keep this in the second category. You want to use something called the give up.
Initially, when you go low, even if you price condition a seller, they will say no to your offer. What you want to do is back off. Give up on the deal. Go back to our rapport-building phase that I talked about in episode one. Get back to level 1, level 2, and make sure you are deep in level 3 rapport. Level three rapport is not only did they talk about something, not only did they teach you something, but they gave you something. Stay there, hang out, and make a friend.
Once you’re there for a few hours, you’ve already done the presentation. They’ve already said no. You’ve already given up. You’ve already taken all the pressure off. Everyone has their swords down and everyone’s best friends. All you’re talking about is tomatoes, records, cars, friends or vacations. You’re about to walk out the door. The one thing that you’ve got to do is say, “I’m curious. I know we didn’t come to terms, but what would’ve gotten the deal done? What was the hold-up?” You may get your answer. You may be able to solve an objection. Maybe you could come up on price a little bit and maybe it’s just $1,000. Lock up the contract and you’ve got it. The give up, don’t forget it.
The Range Technique
Number three is the range technique. The range technique is when people are negotiating, oftentimes, they go in for the kill. If we’re going to buy a $200,000 house for $100,000, they say, “I’ll give you $100,000.” One of the things that I’ll do and I’ll teach you to do is say, “What if I could pay somewhere between $80,000 and $100,000?” Notice how I did a range there. They could say, “I would never consider $80,000.” “Would you consider $90,000 to $95,000?” They say, “I wouldn’t take less than $95,000.” “$90,000 to $94,000?” Keep pushing and pushing.
If the range technique works, you want to try it a maximum of two times. If it works, do it again. If it doesn’t work after the second time, don’t do it a third. Use the range technique. It’s a non-threatening way to say, “Let’s meet in the middle. Can you come down a little bit? I would like to be here.” Use the range techniques. Get the seller talking. That range pushes them down.
Rapport Building Process
Four, use an inspection sheet. This can fit into price conditioning. You want to have a sheet that’s got a picture of a house on it, roof, windows, doors, garage, yard, all that. List everything about the house. You could get one of these online. A lot of inspectors use them. I like to have the seller take me around and show me around the property once you’ve gone through the rapport-building process. You can do the rapport-building process while you’re going through the inspection sheet.
If you learn how to ask the tough questions and not be scared of the answer, you will make a ton of money.
You’ve got to be careful if you sense any anxiety from the seller. Break off from that, and then go back and do the inspection sheet. This is important. Do not say a word to the seller while you’re going through the house and they’re showing it to you. If you see a crack in the floor, here’s what I want you to do. I want you to take your hand and place it on the crack. Rub it, touch it, look at it, make a weird face, scrunch up your nose, and go, “Hmm.” Don’t say a word and take a note on your inspection sheet.
If you see a little hole in the window, do the same thing. Look at it, make a sound, make a funny face, and write it on your inspection sheet. Do not ask the seller about it. Do not argue with them about it. Do not tell the seller you are going to fix it. This is important. Many wholesalers go out there and put on this façade like they are going to fix and flip the property. This is not necessary.
Once you do that, you can get a position where you are lying. That’s going to put you in a weaker position. You’re going to have to make up for a lie that you told later down the road. If you don’t want to have to cover up a lie, tell the truth, which I always recommend. If you don’t want to tell the truth, then don’t talk about it at all.
Go around. Do that for the entire property. This will raise the temperature of the negotiation. The seller’s anxiety will start to go up. This will start to help you in the pain step. Without you having to reset expectations about price, the seller’s expectation starts to go down. We did this on a property. The house had foundation problems and the seller didn’t tell us about it. She dimmed the light so that we wouldn’t see the roof ripping from the wall.
Let The Seller Talk
We went in there and Brian, our acquisition manager, looked up, made some faces, and wrote it down. All of a sudden, the seller started making noise and talking and reset her expectations on price. He looked at it again and again. The seller came down on price. The less talking you do, the more money you will make. Let the seller talk and have them negotiate with themselves.
Technique number five, this is a question. During any negotiation, if you feel like you are at a standstill and you can’t get to where you want to go in price, or you want to find out that this is the floor of the seller’s price, you say, “Are you telling me that if I can’t pay blank, that we can’t do business?” I learned that from Ron LeGrand. “Are you telling me that if I can’t pay $150,000, that we can’t do business?”
Shut up, don’t say a word and see what they say. They may tell you, “That’s right,” or they may say, “I would have to be at XYZ.” Always respond with a question. Take control of the conversation. I talk a lot about that in the videos that I told you about. I’ll give a free video training. Go to ClosingSellers.com. Register for that video training. I go into detail in that video.
Six, send out a written offer to every single person that you talk to who has an interest in selling. Out of all the sales techniques that I’m talking to you about through episode 1, episode 2, and episode 3, if you do everything right, there are some sellers where the timing was not right or they would not reveal their information no matter what you did. There’s nothing that you can do.
However, if you send out a written offer to every single person that you speak to who has an interest in selling, regardless of the gap in price, you are going to lock up a couple of monsters. A lot of people say, “I am not going to send out an offer. We’re so far on price.” You weren’t going to send out an offer, or else you would’ve gone out there. You send the offer to people who you think that you can’t do business with, but you’re too far on price. Let the written piece of paper do the selling for you.
We did a deal in which this person said no to us for two years. I noticed that we did not send a written offer. I said, “Send a written offer.” We got a callback. The guy said he’ll do the deal. We made $50,000 on the house. Sometimes people are strange. Everything that you do is out of your control. Use this as a backup. It’s not a sales technique. It’s a way for you to make more money a habit.
I like to ask one more question here. This will enable you to understand and engage where you’re in the negotiation. Most people don’t do this because there’s fear involved. If you learn how to ask the tough questions and not be scared of the answer, you will make a ton of money. I implore you to ask this question. My question is, “What other offers have you received on the property?”
They’re going to say 1 of 2 things. Number one, they’re going to say, “I’ve received X, Y, Z,” or two, “You’re the only person I’m talking to.” This is good. Most people don’t want to hear, “I’m talking to X, Y, Z,” but they’re there. If they’re higher, better, or do something that you’re not, you want to find out about that. Dig into those offers.
Ask The Right Questions
Say, “What did you like about those offers? What didn’t you like about those offers? How do you feel about doing business with me versus them? If you want to go with them, that’s great, but what is going to separate us? What’s going to be the thing that’s going to seal the deal that’s going to enable us to do business?” If you ask the right questions and you’re not scared of the answer, you’re going to spend time with the right people. You’re going to be able to overcome objections. That’s the seven. There are a couple of bonuses. If you want more detailed training on this, go to ClosingSellers.com.
I want to implore you that wholesaling is about three things. It’s about generating leads, converting those leads, and exiting the property for maximum profit. Don’t overcomplicate this business. The great part about that second part, the great part about converting, is that it is not a natural-born skill. You can learn it. Three, if you decide that you’re going to become a master of your craft, you’ll drastically increase your income, freedom, net worth, and enjoyment of this business. Thank you very much for having me. Talk to you soon.
- Episode one – Episode 374: How to Meet, Negotiate with, and Close Motivated Sellers (Part 1 of 3)
- Second episode – Episode 379: How to Meet, Negotiate with, and Close Motivated Sellers (Part 2 of 3)
- Ron LeGrand
- Be sure to join the Wholesaling Inc. Facebook group