It’s a Core Skill for Success in Real Estate
Negotiation is the heart of real estate investing, especially when working with sellers. The way you approach a conversation can make the difference between closing a deal or walking away empty-handed.
Here are some key principles and tactics that can help you negotiate effectively and secure more profitable deals:
1. Be Quiet and Listen
One of the most powerful things you can do in a negotiation is to stay quiet. When you let the seller talk, you gain valuable insights about them, their property, and their motivation. People like to be heard, and when they feel heard, they are more likely to trust you. Trust is essential for making deals happen.
2. Approach with Curiosity, Not Confrontation
Rather than challenging a seller’s price outright, take a curious approach. If a seller insists their property is worth far more than market value, respond with something like, “Oh, interesting! Can you tell me more about that? Why do you think your property is worth that much?” Curiosity keeps the conversation open and non-confrontational, making it easier to guide the discussion in your favor.
3. Be Prepared, But Stay Flexible
Having a general idea of the property’s value and market conditions before a call is helpful, but don’t get stuck in over-preparing. If you spend too much time researching, you might never get the seller on the phone. Over time, as you gain more experience, you’ll become more comfortable with off-the-cuff conversations.
4. Get Comfortable with Silence
There’s an old sales saying: Whoever talks first loses. When you ask for a price, resist the urge to fill the silence. Let the seller sit with the question—it may feel uncomfortable, but it’s a powerful tactic. Often, they will break the silence by providing a price or additional details that help you in the negotiation.
5. Keep It Playful
Negotiation doesn’t have to be high-stakes or stressful. The more detached you are from any single deal, the more natural and successful you’ll be. If you view negotiation as a game and keep a lighthearted attitude, the process will feel less like a battle and more like a collaborative conversation.
6. Let the Seller Give the Price First
Pace Morby has a great saying: “I get the price, I don’t give the price.” When you ask, “What price would make you happy?” let the seller answer first. If they push back and say, “You called me, you tell me the price,” try changing the subject. Ask about the land’s history, its past owners, or any recent improvements. Then, circle back to the price later. This tactic helps sellers lower their guard before discussing numbers.
7. Use Price Anchoring
Most sellers overestimate their property’s value. If you think a lot is worth $15,000, start with a much lower number—maybe $7,000 or $8,000. This sets an anchor that makes your actual offer seem more reasonable. The goal isn’t to insult the seller but to reset their expectations so you can meet in the middle at a fair price.
8. Bring in a “Higher Authority”
If a seller pushes back hard, use the business partner or boss strategy. Say something like, “I might be able to do a little better, but I’ll need to check with my partner.” This gives you a way to negotiate without seeming too eager, and you can later come back with a slightly improved offer, making it feel like a win for the seller. This also puts you and the partner on the same side, negotiating against your partner or boss.
Psychologically this is a good shift. “I’ll see what I can do”. “Not sure if he’ll go for it but I’ll try…” Then when you get back to them- “He really did not want to budge, but I got him to come up to [dollar amount]. Can you work with that?” etc.
9. Mirror the Seller’s Communication Style
People feel comfortable with those who sound like them. If a seller speaks slowly and methodically, match their pace. If they’re upbeat and fast-talking, bring more energy into your voice. Mirroring their tone, speed, and even certain phrases they use builds rapport and makes them more likely to trust you.
10. Confidence Matters More Than the Perfect Script
The words you use are less important than how you say them. Speak with confidence and be present in the conversation. Sellers respond more to energy and assurance than to rehearsed lines. If you believe in your offer and present it with certainty, they’re more likely to take you seriously.
Final Thoughts
Mastering seller negotiation takes time and practice, but by applying these principles—listening, staying curious, managing silence, anchoring prices, and building rapport—you’ll close more deals with better terms. Keep these tactics in mind, stay patient, and remember: negotiation is just a conversation between two people trying to find a win-win outcome.
Want to dive deeper into these strategies? Stay tuned for upcoming posts where I’ll break down each tactic in more detail!