We’ve been looking at what you need to do to ensure you can negotiate the best possible terms and price for your property investment and buy to let properties.
The most likely way of achieving a mutually satisfactory outcome is to negotiate from a position of mutual trust. And often this is most likely the result of having developed a relationship with those you are negotiating with. This is why building a good relationship with the estate agents who represent the vendor, and the vendor himself or herself, if you have direct contact with them, is essential. Treat them with respect at all times. These people can and do make decisions that will affect your success.
Building trust starts even at the first viewing. Tempting though it may be, don’t criticise the property just to try to soften them up. Being complimentary will ironically be better in the long run for negotiating a lower price. People are people. If they like you, they are more likely to do you favours. If you put their nose out of joint, they’ll do you no favours at all.
If you can I’d always try and engage the vendor in conversation at your viewing (which for us, remember is an inspection by another name). If the vendor is not there then try and build some rapport with the estate agent. You will have been doing this anyway because you want to be moving up the pecking order.
I have found that trust comes about through showing interest and, where appropriate, concern.
One of the best ways of building empathy, and of understanding the motives of the vendor, is to be aware of the art of communication, and part of this will be the use of “active listening”. This is something I explained in detail in a few years ago and so I won’t cover it all again now, but I will give a quick reprise.
Most people don’t really listen, they just wait, or sometimes don’t wait, for the other person to stop talking so they can put their own point of view
Another problem we all have is that we really have our own vocabulary – we often have meanings or associations attached to certain words or phrases which are peculiar to us.
Tony Robbins, the American self made millionaire and personal development guru, describes this as having filters; we ‘filter’ everything through our own world view and attribute our meaning to them. No two people are alike and no personal experiences are alike, and so we all have different ‘filters’. This means two people can look at a situation and see two different possibilities or outcomes. One may see an opportunity, another may see a problem. And this applies equally to words and how we give and receive them.
So what we need to do is to listen to the words the other person is using and to try to understand the meaning behind them
To be truly active in listening we need to be able to
- Try to switch off our own view point – in other words stop using our filters. In fact use none at all if possible.
- Try to be empathetic – in other words try to understand where the other person is coming from. How did they get their filters? What is their background? What are their motivations? What are their fears? What do they really need, either from you or from the situation?In the context of negotiating, communication and active listening is essential. This is especially true because, in order to get the best deal, you need to know why the other party is selling (or buying, depending upon which side of the negotiation you are on) and what they need to achieve from the negotiation. That will make it much easier for you to structure a deal that suits your needs and which is difficult for the other party not to accept.
Understanding the “sub-text” of what the other person is trying to tell us (whether consciously or unconsciously) is a skill all serious property investors need to nurture. Not just for the obvious situations such as negotiating deals, but in dealing with tenants, estate agents, managing agents, in fact anyone we come across in a normal day’s business. The more you are able to use ‘active listening’, the more empathetic you will be, the better you will be able to relate to people and the better you’ll interact with them. Be under no illusions, property is a people business; the better you understand and get on with people, the better and more profitable your business will be.
In the context of negotiating, communication and active listening is essential. This is especially true because, in order to get the best deal, you need to know why the other party is selling (or buying, depending upon which side of the negotiation you are on) and what they need to achieve from the negotiation. That will make it much easier for you to structure a deal that suits your needs and which is difficult for the other party not to accept.
So how do we know what someone really means? How do we know what the sub-text is? We’ll think about how to find this out in the next post.
Here’s to successful property investing.
Peter Jones B.Sc FRICS
Chartered Surveyor, Author & Property Investor