Real Estate Investing Coaching - Brian Gibbons

Playing Dirty in a Buyers’ Market

from Real Estate Investing For Real | A BiggerPockets Investment Property Blog by FSBOJane

Nine Ways to Turn a Solid Walkthrough to a Solid Negotiation

If you’re new to real estate investing, trying to determine how/when you should buy a place you plan to resell, rent, or rehab, these tips will guide you through the rough spots of deal-making:

1. Do your homework
If you know the specific location where you want to buy, compare listing prices of similar homes in the area. In this buyers’ market, you can afford to make a lower offer than the listing price. Yet keep in mind that insultingly low offers will only make for bitter sellers, so plan to make as fair a judgment as you can, keeping in mind that, right now, the ball is in your court.

2. Know what cards you hold
Talk to mortgage institutions before you start negotiating. Knowing exactly what you can afford will guide you to properties within your budget, meaning you won’t waste your or the seller’s time. Also, being prequalified immediately makes you a more serious buyer and thus more attractive to sellers.

3. Ask questions
Bring a standard list of questions to ask for every home walkthrough, but do your research and ask very specific questions on the nuances of each home. What are the maintenance costs like? What appliances need to be updated? This can all affect your offer, if you decide to make one.

4. Engage the seller
“Oh, I love these window treatments and that refrigerator.  Can these stay with the home?”
You may have already known that the treatments and appliances stay with the home, but if you are visiting with a home seller, asking “dumb” questions will engage the seller to talk in greater detail about the extras and amenities offered with the home. The more you know, the more negotiating power you will have.

5. Use “positive manipulation”
Manipulation isn’t always bad–you know that the seller wants to sell the home. Understand the selling motives, and let them work in your favor. If you know the sellers are moving because of a job, they will want to sell as soon as they can. When time is of the essence, offer them expedience and you might be able to make an offer in your favor.

6. Call their bluff
Take a closer look at the home. Notice wear and tear, scuffing, and the overall condition of the home. If the seller claims “new” carpeting and you can see that it clearly isn’t, they could also be bending the truth about much larger issues. Don’t buy Funny Farm when there are countless new and impeccably maintained homes on the market.

7. Always be willing to walk
While you may not literally be “walking away” from the home, many sellers are certainly eager to grab your attention if you express a mild interest in the property. If they know that you are interested, but more than willing to look elsewhere, they will use what they can to grab your attention. Lowered prices, add-ons, and included amenities can sweeten any deal.

8. Act fast
While it’s comforting to know that you’re buying in a buyers’ market, your ideal property is still liable to be taken by someone else. If you find the home that you really want, don’t hesitate to make the offer. While the odds may favor you, don’t forget that there still are other buyers to compete with.

9. Know that your best ally is yourself
After you’ve gained all the knowledge you can about the home, the seller, and your own finances, trust yourself to make the best decision. Knowing that you have a multitude of choices means that you deserve to find your dream home! Playing “dirty” really means that you should be a savvy buyer, with lots of knowledge (and the favorable market) on your side.

What to Do When a Client is Ticked Off

 Date: Thursday, August 24, 2006 @ 02:02 PM EDT
Topic: Managing

       

    My client Jerry was threatening to sue. 
Worse, my programmer was dragging his feet and didn’t see the seriousness of Jerry’s threats.
I was on the phone with Jerry for hours at a time.

The custom ordering system we designed for Jerry’s web site needed some small changes that really
weren’t affecting the performance of his site.

Jerry kept saying that the whole system was flawed and that it needed to be completely redone.

However, he already had more than 600 sales adding up to more than $100,000.
What to do?

We eventually got all the problems fixed up but Jerry ended up having the site and ordering system redone   by another company so Jerry was now out of my hair.

Was this a good thing or a bad thing?

Customer retention is crucial in all businesses and handling ticked off customers is a part of growing great   long-term relationships. 

Sometimes you choose not to retain a customer even if they are happy with the  work you’re doing.
The time and energy they cost you isn’t worth the money you make from them.

Hire and Fire Clients Judiciously
Reflecting on the situation with Jerry, I probably shouldn’t have ever taken him as a client because he
smelled of trouble from the outset.
The first time I came into Jerry’s shop he was arguing with a customer   while I waited.
He was unbending and wasn’t willing to make concessions.

Malcolm Gladwell writes of this in his book, “Blink”.
We need to be aware of when something doesn’t feel right and do something about it before getting in too deep.
I should have just walked.

Advertising guru David Ogilvy proudly admitted that he fired more clients than fired him.

It takes bravado and diplomacy to drop a client, especially if they are a big source of income. You have to weigh the headaches they cause with the checks that are deposited in your bank account.
Are they worth it?

Setting Expectations Early and Realistically
I lost another client around the same time because I did not set expectations.
Daniel and I had more of a  friendship than a client/vendor relationship. He looked and smelled like a good client, but I realized later that he was a problem.

He took a lot of my time and had too high of expectations for the work we were doing for the price he was paying.

If you have a friendship with a client, you still have to set strong boundaries with them.
You communicate  your expectations and bill them accordingly for the work you do.
It’s easy not to bill for your time if   someone is a friend.
You have to set the expectation that you will be billing them for all the work that you  are doing for them.

Don’t Let Problems Fester
Daniel and I had a blow up when he misunderstood something that I had written in one of my blogs.
He   wrote me a strong email that I reacted to in kind by email.

If he had read the blog or clicked on the link in   the posting he would have seen I had great intentions. And the blog wasn’t even about him—there was just   a link on the side of the page pointing to his site.

If I could go back in time I would have waited a day or two to cool down.
Then I would have written an   email explaining my writing and suggested talking face-to-face or by phone.  Live and learn.

Hire Skilled, Responsible People to Handle Your Client’s Work
My problem was I was trying to do everything myself, and things were falling through the cracks. Now Itell my clients to communicate their web site changes directly to the designer and they will be billed  accordingly.
That way changes don’t get stuck in my In Box.

Make the Hand-off Easy
If the client chooses to leave or you fire the client, make the transition as smooth as possible. Provide all
the files and information they need to move forward if that is the nature of your business. Even if the break up is hostile, make a point to be civil and professional. They may never return as a client, but they may not  badmouth you if things end more positively.  Daniel got a new company to work on his sites, and I made  the transition as smooth as possible for him. I doubt I will ever have him as a client again, but I needed to know in my heart that can make the transition easy for the next person.


Smooch Some Hiney
Okay, you have a client who pays well and is worth keeping.
Now is the time to kiss some butt.
You have  to admit you did something wrong and make amends.

My client Scott didn’t know some of the work we were supposed to do for him was done.  But I knew. I
took the risk of telling and then also told him that we would do work for him during the following month at  no cost to him. It cost me $600 but it was worth keeping Scott as a client.

Handling ticked off clients is all about doing crisis management, and then deciding how far you will go to
keep them as a client. 

You may choose to give up peacefully and let them go, or you can fight to keep  them.
Sometimes you have no choice.
But when you have the choice and want to keep them as a client, do  all you can to make things right. They may represent many more years of income.

    Handling ticked off clients is all about doing crisis management, and then deciding how far you will go to
keep them as a client. 
You may choose to give up peacefully and let them go, or you can fight to keep  them.
Sometimes you have no choice.
But when you have the choice and want to keep them as a client, do  all you can to make things right. They may represent many more years of income.