Developing negotiation skills might be the best thing you can do to get more from the smallest to the largest transactions you face in business. While it may seem that some people are born naturals, in fact, anyone can learn the skills it takes to reach mutually agreeable decisions. It takes time and some practice, but the time you put into it will pay off.
Of all the negotiating skills you can master, becoming a good listener tops the list. Letting people talk gives you information, which translates eventually to power. Letting the other person talk at length about their position will likely reveal how they feel about different aspects of the deal in which you’re involved. Through careful listening and note taking, you will be able to put together an offer based on what they’ve revealed to you, often unconsciously.
How you say something and the expressions you use might go a long way when you need to negotiate, especially if you do it over the phone. Tone of voice is an important component of body language, which is a major part of human communication. Your voice and what you do with it is all the listener has to rely on. Even in person, inflection and tone of voice make a big difference in how someone else interprets your words.
Initially, no one enjoys hearing their own voice, but once you start recording yourself and playing it back, you’ll overcome the discomfort, and discover ways to use inflection to better communicate by emphasizing what’s important to you.
Within the investment world, real estate may be the most changeable. Companies, regardless of size, exercise fairly tight control over their operations, product pricing, and profitability. The real estate market, especially for residential properties, is controlled by individuals rather than corporate boards.
Because decisions are made by individual owners and not collectively, swings in the market happen faster. As an investor, it’s essential to be informed about the market, whether you’re buying another rental unit or negotiating prices with a contractor.
Property management companies take care of these negotiations for their clients. They use their knowledge of the market using the professional resources like sales statistics and their experience with local contractors. Even though you can trust their judgment, it’s always helpful to stay on top of market conditions when you’re considering a new property or bidding out a property upgrade or repair.
One of the most important negotiation skills for real estate investors is to let the other party make the first move. When someone else establishes the baseline, you’ll have a point from which to start and that can be advantageous. They’ll expect a counteroffer, and as you begin negotiations, you’ll get a sense of how flexible they are.
Listening and talking in a working session go hand-in-hand, but there are times when you can use silence to your benefit. Instead of acknowledging a demand, stop talking. Some people find silence intimidating and the other party may react by conceding.
JWB has over 10 years experience managing turnkey rental property investments. We have a consistent approach that delivers steady cash flow from our clients investment properties. Curious what your cash flow could be from one of our rental properties? Try our cash flow calculator or contact us to learn more.