So, you’ve worked hard to build your real estate investing business and you’re finally ready to make your first offer on an attractive investment property.
As you approach the finish line, you might think that the uphill battle is over and that there’s nothing but smooth sailing from here on out — but locking in your first real estate deal is arguably the most crucial part of the journey.
Closing your first real estate deal can be quite stressful if you’re not fully prepared for the many procedural steps ahead, the numerous negotiations to come, or even for presenting yourself in the right way.
However, there’s no point in getting discouraged so early in the game: Closing a real estate deal successfully is a skill, and like all skills, it can be learned and honed with just a little bit of practice and research.
So, how can you maximize your chances of success when negotiating your first real estate deal?
Here are our top 4 tips on how to close a real estate deal in the most efficient, painless way possible.
These methods can also be scaled to lock in incredible deals on many more investments to come!
#1. Think About It Being a Win-Win
One piece of advice you tend to get as a green real estate investor is to practice your negotiation skills by lowballing your seller as much as you can, at least at the very beginning of the interaction.
While there is merit in practicing more aggressive negotiation tactics, this approach might not be the best one if you’re aiming to actually close the deal fairly and successfully.
Rather than just thinking of how you can benefit from the offer, your mindset should be one of mutual benefit instead.
What does the other person need and how can you tailor your offer to fit that need?
Empathy can go a long way when closing your first real estate deal, so try to put yourself in the seller’s shoes to identify their needs and (but not necessarily their wants) first.
Do they need to get rid of their apartment or house fast? Then a lower offer can be beneficial to you both.
Will they be willing to lower the asking price if you can promise cash payment? Then this might be another opportunity to negotiate a considerably lower price on the estate.
A more sensitive and careful approach will guarantee you’re framing the offer as a win-win situation.
Making a fair and equitable offer on the property you’re interested in will help you be perceived as a serious buyer worth negotiating with.
Related to our first point, our second tip for closing your first deal successfully is to focus your attention on listening to the prospective seller.
You won’t be able to gauge what they need by simply guessing or asking point-blank. Listening attentively to everything they’re saying about the property and their journey as owners will help you fill in the blanks and understand what offer is likely to resonate with them.
It’s quite unlikely that they will openly admit to struggling or facing challenges with the management of the property, so it’s up to you to ask all the right subtle questions and listen carefully for any difficulties the seller is being evasive about.
If you sense there’s something you could help them out with by making your offer, use that as your first point of negotiation! Remember it’s not always all about the money: There are many logical reasons why your offer might not be a good fit, so make sure to listen for the signs your seller might not accept a lower offer but might be open to different types of negotiations.
#3. Chit Chat
Our next tip is quite straightforward: To put yourself in the best possible position for getting a mutually beneficial deal, you’ll have to work on your people skills.
Make the potential seller feel comfortable with casual smalltalk. If this is you, use it to make yourself more likable and approachable. You will also reap the benefits of getting them to talk with you more.
A friendly chit-chat allows you to learn a whole lot more about their motives for selling, which in turn, will help you figure out what offer is most likely to hit the spot. They might be retiring or going through a lengthy divorce, they might want to move for a new job or family matters, or they might have come to the conclusion that keeping a high-maintenance estate will not work for them in the long run.
If you’re working with seasoned investors, they might want to keep some of their capital for passive income as well, so you might want to explore options in which you’re working together rather than simply buying what they want to get rid of.
Whatever you manage to gauge from your conversation, it will give you plenty of insights on their reasons for selling, their position, and the level of urgency they need. This will be key to helping you figure out your position in the negotiations too.
#4. Make Notes
Finally, our last piece of advice is to write things down as much as you can.
While you can easily learn a lot about the person and what type of offer they need on the spot, it’s undeniably much harder to remember all those insights after the conversation has taken place.
The casual insights you get about the seller’s life, goals, and pain points are like little golden nuggets of information: precious, rare, and easily prone to get lost in the middle of your conversation. Bringing a notepad or a laptop with you allows you to write down the most crucial pieces of information they end up sharing, so don’t be shy and get that pen and paper out for some invaluable note taking!
Of course, you wouldn’t want to simply stroll in or join a video call, notepad in hand, and write down every single thing they’re saying. What you can do, on the other hand, is prepare a comprehensive list of questions beforehand and get them answered in a casual fashion, so you can make sure no crucial information gets lost while projecting a professional image.
You might want to keep it vague by asking about their plans in life and with their property in general, or you might want to ask about their mortgage and expenses. It might also be worth trying to ask a similar question (meaning a question with the same end goal) in two or three different ways, from vague to more direct — every little tidbit will help!
House Closing Made Easy
So, are you ready to take that single rental and start building a lasting passive income that’s going to get you the wealth you need?
Whether it’ll take a few tries to master these tips or you’ll get exactly what you want after just one interaction, there’s no better place to get all the insights you need on successful house closings and real estate investing as a whole than our FREE 90 Days to 5K masterclass.
We’ll walk you through all the steps you need to master to find profitable opportunities and close every deal successfully, so you can live the life you want, build an enviable real estate portfolio from zero, and start making a $5,000-per-month passive income in no time.
Register today before spots run out — we’ll only take the next 200 people!