Who can forget the scene in Glengarry Glen Ross when Blake — Alec Baldwin — delivers his epically motivational speech, demanding the group always be closing? This scene brought the “ABCs of Sales” into pop culture in a big way, inspiring countless real estate agents, investors and sales people from every industry and niche to push harder, run faster and demand more from themselves and others.
While I loved the movie and love the scene, I’ll confess — that’s not really how I do business, and it’s definitely not the way I want my Nick Vertucci Real Estate Academy (NVREA) students to do business either. Sure, we’re constantly closing deals in this industry and we all need to keep pushing ourselves BUT — and this is a big BUT — if you take a page from Blake’s playbook, all you’re going to focus on are those ABCs. And that means 1) you’re going to leave a lot on the table, potentially and 2) you aren’t going to be as invested in the relationships that come with those deals, which can be problematic in the long run.
From where I sit, I see the core of the real estate investing industry as less about the ABCs and more about the ABNs — as in always be NEGOTIATING. If you’re a master negotiator you are going to get an infinite amount accomplished from day one. Not only are you going to get the best, most lucrative deals for yourself and your business, but you’re going to generate a more positive reputation in the industry — people are going to want to work with you more and be more receptive to your offers, and that’s got infinite value. Sorry, Blake.
The Secrets of Powerhouse Negotiators
Being a good negotiator is essential to success in the real estate investing industry — it’s that simple. If you can negotiate you’ll instantly have a leg up on the competition, enabling you to get ahead of the best deals and, ultimately, negotiate the best financing, pricing and added terms and conditions. And if you can really master the art of negotiating — if you can be a true powerhouse in your dealings with sellers, contractors, lenders and future buyers — you’ll no doubt catapult yourself and your business ahead.
So what does that all look like? What does being a powerhouse negotiator mean, specifically? Here are the steps I work through in virtually every negotiation. Give them a shot next time you’re working through terms on anything.
Step 1: Just ASK
This seems so obvious, but I can’t tell you how often new real estate investors skip this essential first step. When you start negotiating with anyone — a seller, a bank, a lender, a buyer — ask for what you want. So many people talk about not showing your cards too soon and being secretive about your motives, but I think that’s a major misstep. Being cryptic and cagey just drags the negotiating process out, which no one needs or has time for.
And, believe me, you’ll be surprised more often than not if you’re upfront and totally transparent. I can’t tell you the number of times I’ve reached out to a seller and said, “I need THIS to make the deal work,” and they’ve happily — and instantly — agreed. Negotiations take minutes, not days or weeks, and I walk away with the deal I wanted in a fraction of the time. It’s a win/win. So don’t be afraid and don’t try to gain an upper hand by dancing around the point. Ask for what you want and see where things go.
Step 2: LISTEN More Than You Talk
Forget what you’ve seen in the movies. While yelling, slamming your hands on a table and making idle threats may get you a good deal once or twice, this isn’t the way you want to build your business. Instead, you want to come to the negotiation table ready to listen and compromise. Remember, you’ve got two ears and one mouth — use them proportionally.
I often find the best deals happen when both sides are willing to listen. While you and the person on the other side will both have agendas in finalizing this deal, you’ll likely find more commonalities than differences by listening to what one another has to say. This can help terms get settled faster and deals closed in less time — again, everyone wins. So before you steamroll the seller, buyer or lender, take a breath and listen. It’s the best advice I can give in business and in life.
Step 3: Be INFORMED
Before you negotiate, be sure you gather all necessary information you’ll need to make your case. This includes comps and other key info and intel on the property, whether you’re buying, selling, financing or preparing to rehab. Understanding the norm will help you come to a compromise, whether you’re dealing with a buyer, seller, contractor or bank. Present your case fairly and from a fair and balanced perspective, and you’ll be in a better position to make a successful ask.
Step 4: Know Your Limits
At the same time, it’s important to have a hard line in any deal. Even if you really want a property or really want to sell a property, you’ve got to have some hard-and-fast parameters in mind or you’ll wind up losing serious cash. Know how much you’re willing to pay — or how much you’re willing to accept — before you start negotiating.
It’s important to be flexible but if things start to veer too high or too low, don’t hesitate to walk away. Sometimes the person you’re negotiating with will see you’re holding hard and fast, and will be willing to meet you halfway. Other times you’ll lose the deal — and that’s OK, too. There are countless deals out there — sometimes you’ve got to kiss a lot of frogs to find them, though.
One Thing Great Negotiators NEVER Do…
One final disclaimer that I always remind NVREA students of in my sessions and workshops — being a powerhouse negotiator and being a bully are two very different things. In this industry, you want to be a great NEGOTIATOR — but you never want to cross the line into bullying territory. That’s what I think Glengarry Glen Ross got wrong — negotiating and, ultimately, closing deals doesn’t mean being aggressive, underhanded or dishonest. It means coming to the table ready to compromise and develop a deal that’s mutually beneficial — you get the property at a fair price, for example, and the seller gets a quick, cash close, let’s say. Everyone wins.
Negotiating is a cornerstone of the NVREA program, whether you enroll in the Academy or pop by one of my workshops or seminars. Check out when I’ll be in your area next, or when the next class is enrolling — not only will you gain solid negotiating skills, but you’ll find endless information and inspiration to help power your real estate investing business. See you there.