In the video, Jack shares negotiation tips for property deals. He emphasizes the “Art of Negotiation is to Analyze” — the importance of analyzing the situation, listening actively, and keeping one’s own statements minimal. Jack advises against revealing one’s position too easily and suggests having a fallback price. He also highlights the significance of leaving something on the table for the other party and maintaining a rational mindset.
Hello, this is Jack Miller. Hopefully, you’re having a great day today. I decided to make this little video, and I apologize, I’m trying to get my speaker set up here. I should have done it beforehand, but anyway, I wanted to make this little YouTube video in a series of videos that I put together for real estate entrepreneurs—people who want to buy real estate or are buying real estate or financing real estate. These are little tips that I’ve learned along the way in the past, hard to believe, 40 years of being in business.
So, this one I’m going to call “The Art of Negotiation is to Analyze.” And, you know, you could go on forever about negotiation. And really, this isn’t just real estate tips on negotiations; these are tips that I’ve learned across over the years in negotiating many different things. There’s a lot of different negotiation styles. So, first, you have to break down what I call “what type of negotiation is it?” I’ll give you two prime examples of it. Let’s say you’re buying a car. So, that’s one type of negotiation, where you conclude a transaction with them. You get the car, you give him whatever money you’re going to do, and you’re done. You’re really not dependent on him to perform a service. But that’s a very specific type of negotiation.
Another type of negotiation is, let’s say, you’re planning a wedding and you’re negotiating upfront with the caterer. So, he gives you a menu and he tells you he wants x dollars per person, and you get them down to whatever half of x or three quarters of x. In that type of negotiation, you’re dependent on the caterer to deliver. So, you can beat him up and get him down to half of x, but come the night of the wedding, he’s going to just give you less food and he’s maybe not going to have as many waiters. So, you get the different type of negotiation. On that negotiation you’re dependent on somebody and you have to live with them performing the services. So, they’re two distinct negotiations so you have to handle each negotiation differently. Again, when you’re negotiating with your partner, whom you have to live with, or negotiating with your dentist, wife, kids, or your secretary, that’s a very specific type of negotiation. So, my rules are general. Don’t use these rules across the board but understand them and try to think– who you’re negotiating with and what the ramifications of the negotiating are. Don’t negotiate just to beat your chest.
So, a couple of things. One is, I think one of the number one rules in negotiation is to analyze the situation. Most people go into a negotiation, whether you’re the buyer or the seller or any part of the negotiation, and you’re coming to it from a point of ego, frankly. And I make this mistake a lot too. I’m not immune to it, believe me. I’m not immune to it. I wish I had less of an ego and less of that desire to win. But most people come in from the desire of an ego, or they come up with a price, or they just want to win for the sake of winning. But really, what you need to do is you need to analyze the situation. If you’re buying a property, you need to analyze your situation, the profit potential, the seller’s potential, their motivation to sell. Do they have a time pressure issue? But analyze and learn the deal. Really commit it down to a spreadsheet. Try to take the emotions out of the negotiation as much as possible. So, my number one rule in any type of negotiation is to analyze, analyze, analyze. Analyze the deal, your position, the seller’s position. Analyze everything. The next thing is, be prepared to listen and try to keep your mouth shut.
I found some of the best negotiations for me are when I talk as little as possible. Let the other person talk, let them dig themselves a hole, so to speak. But sometimes, it’s listen, be prepared, and keep your mouth shut. Don’t talk so much. More people get into trouble by talking than not talking. So that’s number two. Also, remember, don’t say anything, or do anything that’s going to give your position away. You know, usually, when you go into a negotiation, you should have a fallback price or a walk away price that you say. If you can’t buy it for under this or above this, or whatever it is, you’re just going to walk away. But don’t give away that position to anybody, including— and when I say anyone, I mean anyone: the attorneys representing you or them, the realtor. Because the reality is, don’t assume that someone on your team is going to hold that fallback position in confidence or guard it as closely as you. So, when I say don’t give that position away to anyone, I really mean anyone. Not the realtors involved, nobody, because they’ll show it somehow, intended, or unintended. That’s just the way it is. So, keep it as closely guarded as possible.
Remember that you can always get more, or you can always get less, depending on whose side you’re on. So, you have to really think to yourself, do you want to take everything off the table? Do you want to leave your—I don’t want to say adversary, but the person you’re negotiating with—with nothing? Or do you want to leave him a little bit something on the table? Sometimes, you really do need to leave people with a little bit something on the table for their ego’s sake, and their emotions’ sake, and future relations sake. Sometimes, the people who go through life, who really take every piece of meat off the bone, they leave nothing on the table. It comes back to bite them later on. And you can always remember, get more or get less. So, you just have to keep that in the back of your minds.
Again, I said it before, say little. Sometimes, the silence is the best. Often, deals die, or you give up, wind up giving things away because you’re talking too much. So, I found the quieter you are through the negotiations, the better off you are. Don’t negotiate against yourself by giving a floor or a ceiling. Don’t go into negotiations, and I’ve had it happen, where I’ve seen people, really smart people, give ceilings on deals or floors on deals.
Why give away anything? Don’t give away any tip or any insight into what you’re thinking. Don’t, especially, don’t give away floors or ceilings. And again, I talked about it a little before, sometimes to really win, you have to leave something on the table. Whether it be an emotional win for the guy or something that’s tangible, but you have to give them a win. You know, coincidentally, I’m dealing with the case right now, the negotiations done, the deal is ready to close, and all of a sudden, the seller’s got a new attorney who’s, you know, a high-priced attorney, and he needs to have a win. So, the buyer, we’re trying to create a situation now where— the only way the deal is going to work is if this attorney gets a win. So, we have to create a vehicle and create something where he can walk away from the table and beat his chest and say, “I won, I beat them up.” Let them have that. Sometimes, sometimes you let them have that, let them have that emotional win. Everyone needs, everyone has an ego, and everyone needs an emotional win. So, sometimes, you have to let them have that win. You just have to know how to position that win, so it cost you as little as possible to make the deal. And really, lastly, always have a walk away price and don’t get carried away or emotional about things.
I’ve said before in other videos, there’s a deal of the day—a deal of a lifetime comes across my desk every day, and it comes across your desk every day too. Always have that fallback price and don’t get too invested in the negotiations, where you compromise your price. When it gets to that point, literally get up, walk away, and just walk away. And remember, it’s just business. Don’t let the negotiations get too carried away or don’t let them put you, box you in a position where you’re paying a price or you’re selling at a price that you don’t want to. It’s just business, and that goes back to the first thing—analyze and make it into a spreadsheet where you take the emotions out of it. So, just a couple of tips on negotiations. They could be worthless. I can go on forever and ever on negotiations. I feel like I’ve seen some of the best and the worst negotiators in the world that I’m always learning from them.
So, with that, have a great day. Don’t forget to like the YouTube. I like the YouTube channel. Hit the bell or the buzzer so you’re reminded of other YouTubes and leave comments. I respond to the comments, so leave comments. Take care. Have a great day. And don’t forget, I’m with Gelt Financial. I do this because I love you, and I love helping real estate people. But I need to eat too, and I need to make a living for my company and family as well. Check us out, Gelt Financial, non-bank lenders. When your bank says no, we say yes. geltfinancial.com on the web. Have a great day. And most importantly, life is going fast by, it very fast for all of us. Make sure you smell the roses and enjoy your day. I want you to enjoy your day today, whatever day you’re listening to this. Take care and have a great day.