If you want to learn how to invest in property I believe that there's 10 key skills that
you should master, and skill number four is negotiation.
In this lesson I want to give you a whole load of tips and tricks so that you pay far
less for your next investment property.
Hi, my name's Tony Law from Your First Four Houses, and my channel is all about helping
you achieve financial freedom through property.
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As I say, I reckon there's probably 10 key skills that you need to get very familiar
with in order to be a successful property investor, and my skill number four, well,
it's negotiation.
Now, I've been really looking forward to sharing these tips with you because I know how this
is really going to help you moving forwards when it comes to negotiating with sellers.
Now, this is a little bit longer lesson than usual, but I would encourage you to watch
to the end because I'm going to be sharing some real negotiation power tips.
The first thing I'd like to recognize before we dive in here is that I do appreciate that
for some people the idea of any kind of negotiation is just really, really scary.
Really, really scary, but for other people it comes really naturally.
But for the people that are somewhat fearful, or they're nervous about negotiation, please
realize that you can improve your techniques.
You can get better at this stuff, this is very much learnable.
I want to share a bunch of tips and tricks that are geared around three different categories.
The first of these is when you're dealing direct with sellers.
Let's imagine you've put some marketing material out there and sellers are now contacting you,
and so there's no estate agent involved in the transaction.
The second way is when you're negotiating through an estate agent.
And the third, as I say, I want to share some real negotiation power tips with you.
Let's kick things off by talking about when you go direct to seller.
The first thing I have to share here is that you need to make sure that all of the people
that are on the title deeds for that property, well, they're in the room and you're speaking
to both parties, or all three parties if there's more than two.
Everybody that's on the title deeds needs to be involved in the conversation.
If not, frankly you're wasting your time because you could agree everything with person A,
but if person B isn't there, well, they've also got to agree to it haven't they?
So make sure that everybody that's on the title deeds is involved in the conversation.
First impressions count.
Now, I always encourage people to dress smartly.
Smartly, wear a shirt but don't wear a suit.
A suit really screams out, maybe a little bit estate agenty, not that there's anything
wrong with being an estate agent I hasten to add, but it's a little bit too formal.
I would suggest smart, casual is the way to go.
From the first point of contact, from that first phone call, from that first text confirming
that you're on the way, from the first moment that that door opens you need to be building
rapport.
Try to connect with the seller on a personal level from the first moment that you meet
them.
If they've got a dog say, "Ah, yeah, I've got a dog."
If you like golf, and they like golf, have a chat about golf initially.
Just try to get some kind of connection on a personal level.
When it comes to walking around the property let the seller guide you around the house.
Never, ever criticize anything that you see, even if the place is a real mess.
Try to find some stuff that you can genuinely compliment, because don't forget, this is
their home, this is where they live probably, assuming it isn't a buy to let type property.
Now, at some point you're going to have to start to negotiate or talk about some numbers,
and start to get down to the nitty gritty of what the deal looks like.
I would steer you in the direction of the kitchen not the lounge.
I'm always really cheeky, and I always ask the question, "Have you got the kettle on?"
We go and sit down at the dining room table and that's where we will actually have our
chat, because I feel that it's in the kitchen, is where you kind of discuss business, if
that makes sense.
So, assuming here that this is a motivated type seller, and by that I mean they either
haven't been able to sell for some reason and they're now really wanting to sell, or
maybe they genuinely have got to sell very, very quickly for some reason.
You need to establish as early in the conversation as you can what the problem is.
What is the problem?
Why can't they sell?
Or, why do they need to sell really, really quickly?
Then, you need to come up with a win-win solution, something that, well, I'd actually encourage
you to do it like this.
Something that works firstly for them, so make it a first win for them, and secondarily
a win for you as well.
Now, it might be that the property is unmortgageable for some reason, and there can be loads of
different reasons why a property is unmortgageable.
In fact, I've a done a really good video on that, you might want to check that out.
But, it might be that there's some kind of a structural defect to the property.
Maybe the seller needs �30,000 today to settle a tax bill.
Maybe there's health issues involved.
Maybe they don't want to be a landlord, and this is something that, it's buy to let property
that they've got.
Or, maybe they're relocating to another part of the country, and they don't want to be
a landlord.
Whatever the problem is you need to establish what it is firstly, and secondly, come up
with a solution that will really solve their problem.
Okay, let's move onto dealing through estate agents.
Once again, rapport is everything.
From the first moment that you start to interact with that estate agent try to find some common
ground, try to build rapport from that first moment.
Ideally, try to speak to the estate agent out of the office if you can.
Ideally, when they don't have all their mates in the office listening in on your conversation,
especially if you're going to start to suggest a few things that might be a little bit creative,
a little bit outside of the norm, because if they're outside of the office they can
ask a few questions that, were they to ask those questions in the office they might get
a little bit embarrassed about.
Does that make sense?
So, get them out the office if you can.
Always let them drive the conversation whenever they can.
Don't forget, these guys, they really do know their stuff.
This is what they're doing every single day, so I would encourage you to empower them,
let them drive.
Be professional, have you got your business cards yet?
If you haven't got any business cards please just go and get some printed up straight away.
But whatever you do, make sure that you set a professional image when you're speaking
with the estate agent, that's what they want.
Now, one other little tip when it comes to dealing with estate agents.
When you're walking round the property, when you're dealing directly with the seller, do
you remember when I was saying never criticize?
Never point out anything that you're a little bit uncomfortable with in the property because
this is their home.
If you were walking round with an estate agent I think it's perfectly okay to make some observations.
Draw the estate agent's attention to the fact that the windows have gone, the doorframe
is slightly out of alignment.
"There's a crack down here," "I wonder what's going on there?"
"That kitchen is going to have to come out."
This kind of thing.
Carry around with you a worn notepad, something that looks like you've done this many times
before.
It's in this notepad that you're going to note down all these little areas.
And then, when you get back into the estate agent's office, then you can start to have
a chat about, "What do you think that kitchen would cost?"
"How much do think it would cost to put new windows in?"
And start to chip away, maybe, a little bit of the price in front of the estate agent.
Now, I know ultimately it's the seller you're going to have to convince, but actually, if
they're going through an estate agent, actually it's the agent that's going to be doing the
convincing isn't it?
Because they want this property sold, of course they do, that's how they get paid.
And so, if you can convince them, well, they're going to really try to sell it with a bit
of conviction to the seller, aren't they?
Now, if you're unconfident in dealing with estate agents another really big tip here
is to practice your negotiation skills outside of your area.
What do I mean by that?
Well, I'm sure that you will have a dedicated area, which is where you want to buy.
Well, go and look at another area where you're not wanting to buy.
Maybe somewhere that's say half an hours drive away so that if something really came up,
well, you're going to go and grab that one.
But go and deal with some estate agents in that area, and practice outside of your area.
It's a great way to improve your technique.
Let's move onto a few of these power tips now, and the first one is due diligence is
power, or rather, knowledge is power.
You need to do as much due diligence on a property as you can before you go and see
it.
Now, I've done videos on due diligence before, but honestly, if you can learn as much as
you can about the property, download the title deeds, look around the area, you'll be in
a much stronger position when it actually comes to doing the due diligence.
Now, I wanted to say this, put safety first.
Put your safety first if you are going out and seeing a seller directly, yourself.
I always worry about this to be really honest with you.
I don't like the idea that you might be going into a property, maybe alone, probably alone,
and you don't actually know who is actually in that property, assuming that you're dealing
directly with a seller now.
Make sure somebody knows where you're going at all times, and if you get somewhere and
the seller tells you, "Oh, let's just jump in the car," and, "It's just down the road,"
don't get in the car.
Follow them, but don't get in the car.
Take a laser measure with you.
Now, I've usually got two of these in the car, but make sure you've got a laser measure
with you.
Especially if you're thinking about converting this into an HMO, because you need to make
sure that if there is a small room in there it's big enough to comply with current legislation.
Listen to what the seller is saying to you, or indeed what the estate agent is saying
to you.
Have you heard of this really cheesy phrase, "You've got two ears and one mouth, and so
you should use them in that configuration."
Well, it is kind of true really.
If you listen more than you're talking you'll be amazed at how much you'll absorb out of
the conversation.
If you're doing all of the talking, well, you're not really going to pick up any information
at all are you?
If there's no deal there always be prepared to walk away.
Don't be a motivated buyer, if there's no deal walk away.
And one of the best ways to build real credibility is to follow through and do what you said
you're going to do.
There's 15 separate video lessons in the negotiation module of my online property masterclass,
and these will really help you to close more deals.
If you'd like to book a 10 minute phone call with me to find out a little bit more about
this course and how it could benefit you simply click on this link here to book a time slot.