I must say that I have a treat for you today that is simply mind blowing. This little secret that I am going to share with you has put thousands of dollars in my pocket through the years while negotiating some of my real estate deals.
I used this very tactic last week to help close a deal that had been lingering for a couple of weeks. See, I had this guy who was being a real pain in the rectum, so I had to bring this guy back to planet earth using the little technique known as the Takeaway. The investor was a complete newbie and didn’t even realize what I had done. See, he was wanting to be Mr. Big Shot by barking all these different things after he had already negotiated the price and terms. (what a nut!)
So, I gladly took control over the negotiations by taking the deal away by stating one little sentence: “I don’t think this deal is right for you, we have some other options we’ll be pursuing unless I receive the funds within 48 hours- I’ll spare you the rest of the conversation, but I will tell you that he totally changed his tone with me and I received my funds within the 48 hours.
Anyway, I just recently I posted an article about using the takeaway and how you can apply it to your real estate business. You can read the article below:
The Power of the Takeaway
As a real estate entrepreneur, you must decide to learn the secret power associated with the takeaway. Maybe, you’ve already used it before. You may have used it and didn’t even know it. Regardless, this method is a powerful trigger that will work wonders when negotiating with either a buyer or seller.
Here’s what happens: you basically take away what ever it is you were offering. Maybe you take away a certain price on a property to hold out for a higher price, maybe you take away the ability to buy the sellers house or maybe you take away the deal all together.
For example, let’s suppose that you’re selling a property for $100K. You have an offer from a buyer for $80K. You then counter the offer at $90K. At this point, you’re pretty close to reaching an agreement with the deal, as you are only $10K apart. Well, the buyer offers you $83K as an attempt to get you lower. At that point, you go back to the buyer and apologize that you made a mistake and that you feel awful about it. You tell them that there is no way that you can sell it for the $90K, that the lowest you are able to go is $93K. Now, in most cases, the buyer will not even talk about getting it below the $90K. They’ll want you to come back to the $90K. This is an example of the classic takeaway.
This method is almost magical and really takes away the pressure from you and puts you back into the driver’s seat of the negotiations.
Just recently I used this very technique on a note buyer that wanted me to jump through all these hoops to sell the notes to him. Here’s what happened:
We had a 2nd mortgage that a guy owed me around $23K. The borrower was current on his payments and had an excellent pay history with us. The note buyer had offered me $19K for this note and I accepted. Well, after a couple of weeks of goofing around, I still didn’t have the money or a note purchase agreement. So, it seemed that this guy might be a tire kicker simply wasting my time, so I get on the phone with him using the takeaway.
I simply told the note buyer that I had given him more information on this note than I had given any one else with the notes that I had sold to in the past and that I wasn’t going to continue to waste my time. Then, I told him that maybe this deal wasn’t for him and that I had others that wanted to look at the note. I also told him that I didn’t need his money. The outcome of this was that I had the money wired to me in less than 48 hours of this conversation.
The takeaway method works like gangbusters. But, you may ask why?
Well, it’s proven that we all are motivated by scarcity. In other words, if there is a product or service that is freely available, then the desire for that product or service is not that great. However, if there is a limit or some deadline to that product or service, then it will increase your desire to have the product or service. And this works the same way with your real estate transactions. See, once you’re in negotiations, people already imagine having the money from the sale of their property or they’ve already imagined having that investment property added to their portfolio as they figure what their monthly cash flow will be. So once, you take what you’re offering, the desire for the item increases. Whether it’s the desire for you to buy the seller’s home or whether you’re selling your latest deal. The point is the takeaway works.
So, next time, your Real Estate negotiations come to a stand still or they’re not progressing at the rate you’d like, and then try the takeaway.