(The following is an excerpt taken from an article written by Dan Doran)
So, what’s the single most important thing to dedicate yourself to so you can ensure that you achieve all your goals and dreams? That’s right. You guessed it. You must….become a better negotiator.
Now the question is, “Can I become a better negotiator or are people like that just ‘born’ that way?”
Good news. Yes, you can learn the skills of better negotiation. When we look at good negotiators we tend to just see the “art” of it at work and many think, “I could never be like that.” But underlying that art is a true “science” and it’s the application of that science of negotiation that will allow you to perform the art.
In over thirty plus years as a trainer, I’ve trained thousands to be masters of negotiation. All you need is a willingness to learn, and willingness to practice and implement what you’re taught. Of all the secrets and tips I teach, the most valuable (if you apply it) is this: connect with prospects at an emotional level.
Scientific research repeatedly proves that the overwhelming majority of human decisions are based on emotions, not on logic. Studies report from 87% to as much as 92% of ALL our decisions are emotion based. Given enough time I could prove this to you, but for now, trust me and implement this one secret and you’ll make more money in the next 30 days!
The most common misunderstanding of this principle in our industry is to focus on the numbers. “I can pay you $300,000 for your house.” When you focus on the numbers (the logic) you become an interchangeable commodity no different than the three other investors who were here yesterday and no different from the four more that are coming by tomorrow.
It’s easy to think this is a numbers business, but it’s not. We’re not in the business of buying and selling houses either. We’re in the business of solving real estate related problems for profit. So, in order to solve the seller’s problem (emotional), some logic will be involved (i.e. the numbers), but they will take action more readily if you focus on the emotions of solving their problems vs. just the numbers.
How do you do this? You have to listen and ask probing questions. More on that later, but for now you must come up with the answer to the following question: What is the non-financial reason for selling now?”
Again, it’s easy to say the seller needs to sell because they need the money, or they can’t afford the house due to illness, loss of job, etc. But, that’s not connecting at an emotional level. That’s still just “number talk” on a logical level.
You need to probe beyond that. Why is that a problem the prospect is experiencing? How is that problem affecting their life? What would it look like without the problem?
Here’s a real live case study. Take some time and think through this, and you’ll learn. Nice house, lots of equity, you really want it and you already have a buyer that you know would love it. Sell (we’ll call him Bob) has bought another house and needs to get rid of this one so they can move and have only one payment. You and the seller are only $20,000 apart. What do you do?
Most real estate investors would focus on the numbers and stress, “That’s the most I can pay you…I guess I’m not your solution. Call me if anything changes.” That may have been the “old you,” but the “new you,” the master negotiator thinks: “What is the non-financial reason for selling this house?”
You remember that when you were taking the tour of the home that Bob recently got remarried and he’s bough another house. But, he needs to sell this one so he can move. You probe deeper.
YOU: “Gee, Bob, I can understand how your new wife wouldn’t want to live in a house your ex-wife picked out and decorated. What kind of problems is that causing for you in your new relationship?”
BOB: “My new wife hates this place. We’re fighting all the time, and I’m sleeping on the sofa.” (You found the “pain”).
YOU: “Oh my, that’s got to be tough, isn’t it?” (You agitate the “pain”).
BOB: “To say the least.”
YOU: “I bet you’re looking forward to fixing that. What’s it going to be like once you dump this place and get set up in your new home with your new bride?” (You paint them into the “pleasure”).
BOB: “I can start enjoying my married life and get out of the dog house.”
YOU: “Can you imagine how great it will be to bury the old memories of this place and live in marital bliss with your new bride?”
BOB: “(sigh) Yeah, that would be great, but I need to get my price.”
YOU: “Look Bob, we’re only 20 grand apart. You deserve to be happy. Isn’t that worth a measly 20 grand to make your new bride happy?”
BOB: He’s thinking
YOU: “I’ll take care of everything. I’ll handle all of the paperwork. You can move tomorrow. Take only what you want and I’ll be glad to haul away anything you leave behind. Just imagine how happy your new wife will be when you tell her that you can start packing today. Bob, how do you think she’ll react?”
BOB: “She’ll dance and shout with relief.”
YOU: “Great, I’m happy for you. All I need is your OK right here on the paperwork.”
BOB: (He takes the pen you are offering, pauses and then signs the contract).
If that looks magical, welcome to master negotiating. This example is abbreviated for time constraints. In practice, you would have uncovered this emotional key before you began your presentation. And you would have continually weaved it through your presentation. More on this later.
Here’s a quick recap. Improving your negotiating skills is the greatest investment you’ll ever make in yourself. The return on this investment continues your entire life. Your first step to solving all of your cash flow needs is to listen for the emotional, non-financial motivations of your prospect. Then agitate the current “pain”, paint them into the new “pleasure” and facilitate the whole thing with your solution.