Negotiation Word Tracks

Question 1

(Buyer/Seller):
The buyer put in a offer, the seller countered within a reasonable price range, and neither the buyer nor seller will budge further on price.

Answer 1

Buyer:
John, you made an offer at $X Amount, the seller countered at $Y Amount. We are inches away from a contract. Do you actually want to buy this property? Or did you just make an offer to make an offer to make an offer?

Seller:
John, the buyer made an offer at $X Amount, and then you countered at $Y Amount. We are inches away from a contract. Do you actually want to sell this property? Or did you just say you wanted to sell the property to see what you what type of offers you could get?

Question 2

Buyer: After asking if the buyer actually wants to transact on the deal.

Answer 2

Buyer:
By my understanding, it seems like you want to transact on the property. Now, the $X amount, between you and I, I’m just curious, did you plan on paying cash for the building?

Likely Response: (No, I’m getting a mortgage.)

Question 3

Buyer: After the buyer tells you they plan on getting a mortgage to purchase the deal.

Answer 3

So, you’re literally paying out of pocket another X% on $X amount, which is about $Y amount. Does the deal literally make that much of no sense to you at all at $Z amount that it’s not worth the $X amount more?

Question 4

Buyer/Seller: After a seller gives you their ideal price point for their property.

Answer 4

Okay, and how did you come to your number?

Question 5

Buyer/Seller: After the seller tells you they came up with a number based on the assessed value of the property.

Answer 5

Okay, and the assessed value is based on what?

Question 6

Buyer/Seller: After the Buyer/Seller tells you what they believe the assessed value of a property is based on.

Answer 6

We both know the assessed value means nothing. And essentially, to be honest, we are actually excited that the property is assessed for half the value because the taxes are lower. Now the taxes might jump up a bit, but that assessed value has been a benefit to seller. Now if the numbers make sense, then the numbers make sense.

Question 7

Seller: When you have a few buyers who are interested in the property, and the price point can work if the seller is willing to adjust the terms.

Answer 7

Just out of curiosity, I have buyers who are interested, and let’s just say I can get you $X amount. Are you open to being negotiable on the rest of the terms? At this point it is either the price being negotiated or the terms.

Question 8

Seller: When the seller is willing to seller finance, and does not want to accept a lower price for the property, but is willing to negotiate terms.

Answer 8

Okay great. Well, you said you were willing to seller finance at X% down at Y% interest. Would you be open to, hypothetically, less money down, and a little bit less of an interest rate? Because if you are agreeable, the buyer can probably make the numbers work.

Question 9

Buyer: When you want to make sure the buyer is aware of the total amount down required to close the deal.

Answer 9

We’re talking about a $500k PP. You will have a 5% downpayment which is $20K. This does not include closing costs which will cost you roughly 3-4%. So, you will have 5% plus 3-4% out of pocket, so 9% total, which equates to about $45k out of pocket. Are you prepared for that? Now that may be a bit of an overestimation. It may be a smidge less, but I want to be conservative. So, are you prepared for that downpayment?

Question 10

Seller: When discussing next steps toward selling the property after initial or follow up phone call.

Answer 10

What’s going to happen naturally, if we’re talking about next steps, I would typically come to the property to get a closer look and see if it even makes sense for my client. My client works a bazillion hours a week, they’re not going to take time off of work to see a property that isn’t on the market. So, I’ll stop by, I can take a look at the property, and we can talk about numbers when we meet. Obviously, my client is looking to buy within a certain price range depending on the property and its performance, you’re going to want a certain number, so maybe it works maybe it doesn’t, but if you’re open to the idea of selling, I would love to take a look and present the opportunity to my buyer. Does an afternoon or evening work better for you?

Question 11

Seller: After the seller ask what your buyer’s budget is for purchasing a property.

Answer 11

They have plenty of capital to purchase this property at a fair price. But even if I told you my client’s budget is $10M, if the property is worth $2M, they aren’t going to pay 10. Right now, I have no idea.

Question 12

Seller: When you are trying to determine a net amount the seller would accept in exchange for their property.

Answer 12

If I can get you a deal where you net x amount, would you be ready to move forward with a deal today?

Question 13

Seller: When clarifying whether or not the seller cares about your commission percentage.

Answer 13

As long as you net the number you are looking for, do you care about my commission percentage?

Question 14

Seller: When getting super clear about the commission percentage the seller would be okay with you earning on the transaction.

Answer 14

Okay, just to be super clear, if I were to get you a $1M contract for the property, would you be totally against paying a commission on that deal for 5%? So, 5% commission if I get you a contract for $1M.

Question 15

Seller: When making sure the net amount to the seller is what is what they care about most, and not the purchase price.

Answer 15

Okay, so just to be super clear, you’re looking to net $X. It’s not about the $1M. It’s about the $X, is that correct?

Question 16

Seller: When the seller owns a property free of debt and you want know if they would desire to refinance in order to purchase another property.

Answer 16

Okay, well you said you own a property free and clear. Would you do a cash out refinance of 50%, with an adjustable or fixed rate at a great percentage so it still cash flows in order purchase another property?

Question 17

Seller: After they ask you what you’re seeing as far as opportunity in the market, and what would happen to them financially if they were to sell or refinance in order to cash out or to buy another property.

Answer 17

What I’m seeing right now is, would your payment be higher for a property at the same price point? Yes. However, we both know that good things don’t last forever, and out of curiosity, are you looking to grow your portfolio, cash out of a deal, 1031 exchange, etc.?

Question 18

Seller: When letting a seller know what options they have for repurposing the equity build up in their property.

Answer 18

Okay, well you have a lot of money on the table. You can either take that money off the table by taking a profit today, or you can take some equity out of your property today and invest it in another property. You could also hold onto the cash and wait for interest rates to drop and be first in line for the next opportunity that will put you in a better position than you are today.

Question 19

Seller: When presenting the idea of putting their proceeds from a sale into an investment fund.

Answer 19

Okay, well if I were to tell you there was a way you could move this money into an investment fund where you could actually get better returns than what you are achieving right now, would you be totally against taking a look at it.

Question 20

Seller: When wanting to know what their net free cash flow is to determine if they would consider an alternative investment strategy.

Answer 20

Okay, well in a perfect world, if you could make a better return than what you are making today… what is your net free cash flow right now?

Question 21

Seller: When convincing the seller that an alternative investment that would make them more money than they are currently making should be considered.

Answer 21

Okay great! Well, if you could make more than $X a year off of another investment as an example, regardless of what the debt or interest rate is, would you say that is a better investment?

Question 22

Seller: After the seller objects because they don’t want to list their property.

Answer 22

Listen, I’m not in the business of listing properties, I’m in the business of selling properties. And based on what our conversation is, you’re looking to get the best price possible, correct?

Question 23

Seller: When the seller objects to allowing buyers to walk the property. Your goal is to list the property for sale.

Answer 23

Okay, so hypothetically, if we were able to coordinate showings once a week, or once a month, but are still able to get you the best price possible while keeping everything at bay to where your super content and excited about the way things are getting done, would you be totally against listing the property for sale?

Question 24

Seller: When you are convincing the seller that their price point is too high if they actually want to sell the property.

Answer 24

Do you want to list your property to sell (slight nod as you say it), or do you want to price your property to sit on the market (slight head shake as you say it)?

Question 25

Seller: When using price reductions as a reason a seller shouldn’t pursue the price point they have chosen.

Answer 25

Do you mind if I am candid with you? What I’m seeing in the market right now is more price reductions than have taken place during a single market cycle maybe in history. (Show them data)

Question 26

Seller: When letting the seller know the property value based on cap rates that the market supports today and in the recent past.

Answer 26

Okay, so based off the numbers and the most recent sale in that area, things are trading for somewhere between an x-y cap rate based on valuations. An x cap would put you somewhere around $X amount for this property today. Is that a number or close to a number you can make sense of? (and then shut up)

Question 27

Seller: When looking to get a lower price point from the seller than what they originally presented to you.

Answer 27

Okay well if the number isn’t going to be $Y because that would put you at a y cap rate, and nothing in trading in that area for a y cap rate, what would be a number that would make sense to you?

Question 28

Seller: When letting the seller know the market feedback you have received regarding the price point range their property can transact for.

Answer 28

Hey John, this is Trenton, we spoke a few days ago. Based off the information you gave me, I put it in front of a bunch of my buyers, my best clients who buy a lot of stuff in your area just like this, and they are all coming back to me in the range of $X-$Y amounts for this property. (and then shut up)

Question 29

Seller: After the seller tells you they won’t sell for any of the price points you say your buyers would be willing to pay for their property, which are all below the sellers original price point.

Answer 29

I get it, I’m not telling you to accept it, I’m just curious though, if it’s not going to trade for $Y amount, what number do you think you can make sense of?

Question 30

Seller: After the seller says they would only sell at a certain number, but that they would only look to buy at a number much lower than what they would sell for.

Answer 30

Okay, and I’m just curious, if you’re looking for those types of numbers for returns, why do you think a buyer might want this property for a price much higher than what you would be willing to pay for it if you were in their shoes?

Question 31

Seller: When informing the seller that you have an offer for their property that will net them the amount they were looking for, and that you are looking to have a certain commission percentage on the transaction.

Answer 31

Hey, listen, I have an offer for you netting $X to your seller. On this contract I am looking for a X% commission.

Question 32

Broker: When negotiating commission percentages with a listing broker.

Answer 32

Okay, so you’re looking to give out x% and I’m looking to make y%. So if I got my buyer to pay the other z%, are you totally against us putting it under contract at a z+x% amount on the buy side commission as long as the numbers make sense?

Question 33

Broker: When negotiating commission amount with a listing broker.

Answer 33

Hypothetically, if I want to make 6%, which comes to about $X amount at $Y amount Purchase Price, your seller is looking to make $Z amount net. I’ll come in at $AA amount, my buyer is willing to pay that extra money to make sure I get paid and that you get paid accordingly. Could we get something done at that point?

Question 34

Broker: When explaining to another agent that your buyer is willing to pay a certain amount if a certain percentage of the purchase price is included in your overall commission.

Answer 34

My buyer is willing to pay $X, but this is the way they want the deal to be broken down because they want me to get paid for what I’ve found them. Would this be acceptable enough to make a deal happen?

Question 35

Seller: When getting the seller to lower their price expectations based on market feedback from buyers before presenting them with a real offer.

Answer 35

Listen, I brought the deal to John, and he didn’t like the deal. He wanted to offer you $X (lowball number). What I did for you though, is I brought the deal to another partner of mine, a very seasoned investor, Chris, and this is Chris’ offer.

Question 36

Seller: When a seller says they are willing to sell at a cap rate lower than what is supported by current market data.

Answer 36

Okay, just curious, are you following the market to see exactly where trading cap rates are today in your area for the exact type of property you own? Or are you just looking for a random cap rate?

Question 37

Seller: After the seller gives you a low cap rate number for their market at which they would be willing to sell.

Answer 37

Okay, so you’re asking for a X% cap rate, so does that mean if I were to bring you an X% cap rate you would be very interested in buying it?

Question 38

Seller: When presenting an offer to a seller that is below the price they wanted as part of a follow up call.

Answer 38

Okay, great! When we last spoke, you shared some details that I just shared with a client of mine, all the details about the income of the property. They have an offer for you. The offer is at X price (lowball), I know it isn’t the price you were originally looking for, but they wanted me to present it to you. (see what they say)

Question 39

Seller: When addressing a compressed cap rate price point from a seller.

Answer 39

Okay, I understand. Just curious, how did you come up with an X% cap? Are you going based off what the property is actually worth, or based off what you are possibly thinking you can get for it?

Question 40

Seller: When letting a seller know that the market doesn’t support the idea of them selling their property at their price point.

Answer 40

Well, the market doesn’t support your number because there are no properties like yours that have been transacting near that price. With that being the case, I can share some of the financial information for your property with a short list of buyers who are experienced and are specifically looking to buy in the area, and I can see what they would be willing to offer and if any of their price points are acceptable to you.