Episode #13: “Deal Feel”–The 5 Critical Seller Dynamics to Monitor
Listen to the episode on iTunes
Deal Feel is the art of keeping a very sensitive finger on the pulse on the various nuanced aspects of an acquisition deal, and is a critical component of the Seller Relations toolbox. In this episode, Jeff explains the importance of Deal Feel, and shares the 5 critical Seller dynamics to monitor using Deal Feel skills, to avoid challenges and get more deals closed.
Free PDF Guide: 5 Critical Mistakes That Make Most Real Estate Investors Accidentally Lowbrow
We’ve created a free PDF guide just for listeners of the Sleaze-Free Real Estate Investing Podcast, called “5 Critical Mistakes That Make Most Real Estate Investors Accidentally Lowbrow.”
For instant access to the PDF, just go to http://Pod.thoughtfulRE.com
Links from this Episode
If You’re Not First, You’re Last: Sales Strategies to Dominate Your Market and Beat Your Competition, by Grant Cardone
The theme song is an excerpt of “No More” off the album “Golden Era” by Forest For The Trees. You can check them out on Amazon, iTunes, and Spotify.
Full Episode Transcript
This is Jeff from a Thoughtful Real Estate Entrepreneur, welcome to episode number 13 of Sleaze-Free Real Estate Investing show for those of us who’ve never felt at home in the buy houses crowd in the show we take a stand against what we call the lowbrow approach, that’s the mainstream guru seminar distressed seller groups that ends up getting real estate investors. Instead, we discuss the strategies and tactics and philosophies that we have a thoughtful and enlightened approach to real estate entrepreneurship. It focuses on costly sharpening sophisticated real estate entrepreneurs three most critical capabilities seller relations skills deal architecture skills and opportunity vision. What all three of these capabilities are successfully in motion. You can make an excellent living today, and to build long term wealth, while creating value for everybody that you touch along the way. Show Notes for today’s episode can be found at www.thoughtfulre.com/e13. Please do yourself and do us a big favor by hitting the subscribe button in your podcast app, and also rating and reviewing the podcast. Give us your honest feedback. It really helps other fellow thought real estate entrepreneurs find the show. In the last episode we discussed the second part of a two part story about an epic acquisition. I recently did on my first commercial building took place over the course of 15 months and it required by two ends of the same building from two different sellers, and what turned out to be quite difficult transactions with a lot of maneuvering. So go back and listen to those if you haven’t already, I think you’ll find the story, interesting and fascinating and I think you’ll learn something from it as well. In today’s main course we’re going to be discussing something that I call Deal Feel. But first, actually want to give you a couple announcements announcement number one is that we’re just about to launch a brand new webinar and the webinar is called How to earn an incredible living and build lasting wealth and real estate by mastering the uncommon art of seller relations skills, without working harder or doing more deals. What you’ll learn in this free webinar presentation is three main secrets secret number one is how to easily uncover the hidden motivations of every seller secret number two is how to confidently meet face to face with the seller and come across as a trustworthy pro and secret number three is how to market to sellers in a way that makes the phone ring and helps you buy properties that nobody else, even those are for sale to register for this free webinar. Just go to www dot seller relations, mastery.com, and the second announcement is we have created recently a brand new totally free Facebook group for thought for real estate entrepreneurs, and we’d love to have you join us for some lively discussion about the thoughtful way of doing real estate entrepreneurship in that group. So just go to Facebook and search for Thoughtful Real Estate Entrepreneurs and request to join and we look very forward to getting your request and getting you approved and into the group. And now for a little bit of food for thought. Because as always thought for real estate entrepreneurs we like to keep feeding our minds with things to think about. And here’s what we’re thinking about today. This is based on a quote that I heard recently, and that’s been keeping my wheels turning quite a bit. For the last couple weeks since I heard it. First just for a little bit of context for you. Over the last few months I had been feeling pretty financially tense. I’ve been feeling like we’d had a lot of cash eating projects going on and not a lot of cash, generating projects and the things that were going to generate cash were a little bit delayed and coming in at a different time than I thought. And I was feeling a little bit like I was running low on cash more than I wanted to be you’re expected to be. Now this is really more about liquidity, not profit it’s not that our projects were going bad by any means. It’s just that they were all happening at a similar time. That was using cash faster than cash was being replenished. So, I was starting to feel a little bit concerned and worried about that. So I had happened to pick up the audio version of a book written by Grant Cardone Grant Cardone is if you don’t know him as sales expert guru, and also a real estate guy, and he has this book written several years ago called if you’re not first you’re last sales strategies to dominate your market and beat your competition. So this book is actually written to be about sales during a recessionary period he wrote it back during the Great Recession A few years ago, but mentally, even though. Even though we’re not in a recession right now, mentally, I was feeling like I was in my own personal recession so it seemed very relevant to me and I listened to it and what’s funny about Grant Cardone is his style and his tone This is quite different than mine. He may come across to some people as kind of brash, but I will be darned if I didn’t find it super motivating and super encouraging to get out and stir up opportunity, but the quote in this book that he said was, he said look, you don’t have a money shortage. What you have as a people shortage. And that really struck me. It hit me hard and made me realize that onset keep to myself too much. I’m not out and about talking to people and seeing people as much as I should be. I am out about talking to people, quite a bit, but not nearly as much as I could be, if I really made that my number one focus, you know in our business, we’re really looking for connections with three types of people sellers, people who own property. And secondly, people with money that they want to contribute to a deal in one way or the other. And number three, people who want to buy or rent or otherwise use what it is we have can be wholesale buyers, it could be end user buyers, could be tenants. But the thing that he reminded us in this book, this audio book was it your whole existing network of people can also be really valuable even if you don’t know that they fit into one of those three categories, they can still be extremely important to stay connected with. Do they know what it is that you do, do they know what it is that you’re looking for. Are you top of mind to them. And it made me remember, if I just simply get out there and be continuously talking to people and better yet meeting with them face to face. You can’t help but have good things happen in terms of new opportunities being stirred up. So if you happen to be feeling a lack of momentum maybe you’re feeling like you’re in your own little personal recession. Then do this simply start reaching out to everybody, you know, just simply to reconnect there doesn’t have to be a strategic purpose and don’t overthink it. But make the volume of your calls the volume of your emails the volume of the contacts that you make, make that your metric, and just see how many people you can reach in a day and make a game out of it. And maybe go ahead and pick up Grant’s book and listen to it. I’ll put a link in the show notes for you as well. And that is today’s. Hey everybody, just a quick interruption to tell you about something we’ve put together for you. I don’t know if you’ve ever heard this funny expression, but a powerful one that says you can’t read the label, when you’re inside the bottle. Well, real estate investing is kind of like that when I got started, I was just reading and listening and studying everything I possibly could and taking massive action based on that, which was fantastic. But it took a long time, like a long time for me to realize that so much of what I was learning was actually pretty low brow I just didn’t have that perspective, and you know you might be in the same kind of position right now. It’s very difficult to know and to see your own situation clearly when you’re right in the middle of it. So we’ve created a free PDF guide available for download. It’s just for you guys as listeners to Sleaze-Free Real Estate Investing, not available to anybody else. And it’s called Five critical mistakes that make most real estate investors accidentally lowbrow. So you can go get this right now if you’d like it. This free PDF guide at pod.thoughtfulre.com, go grab it and see if you are making any of these five critical mistakes. All right, we’re moving on to the main course of today’s episode, and today’s topic on Thoughtful Real Estate Entrepreneurship is what I call Deal Feel so Deal Feel is a term that I made up myself. That seems to really accurately capture something I find myself thinking about, and focusing on all the time. So here’s how I would define deal field. Deal fields the art of keeping a very sensitive finger on the pulse of all the various nuanced aspects of an acquisition deal that you’re working on. Deal Feel is an art. But it’s not just a touchy feely topic, it’s, it’s extremely practical. At the same time, it has the ability to really impact the outcomes of your deals in a very practical concrete and financial sense. It’s really a critical element of the overall seller relations toolbox and Deal Feel requires awareness. It’s an awareness of situations, it’s an awareness of people. It’s even an awareness of yourself to a certain extent. Deal field requires sensing. And it requires intuition. And it requires reading the nuances of situations. By paying close attention and interpreting what you see in here and experience. So a real estate transaction is a relationship between two people right especially the way that we do it as trees, since we’re not really buying properties through agents and brokers. It’s really a relationship between two people, the seller and the buyer. And each person comes to this transaction into this relationship with a different, unique set of motivations, concerns, desires, etc. and a real estate transaction. It can’t be underestimated that it’s it’s a big deal for both parties. I actually often remind sellers of that directly myself I said, Look, I know this is a big deal for both of us. And so we need to be thoughtful, as we work on putting it together. And no matter whether you buy 20 properties a year, or you’re a first time homebuyer or you’re selling a property, you know, once a year. It’s still a big deal. It has big implications, not just financially but for the lives and the businesses of all the parties involved. And we know that because I’m sure you’ve experienced that like I have that sometimes relationships can get off track. Sometimes it happens, suddenly, sometimes it happens slowly. Sometimes it happens mysteriously, but when it relationship related to a real estate transaction gets off track, then deals die. And when deals die. That’s a problem for us because we make our living and we build our wealth through the acquisition of real estate primarily. So I want to tell you about just kind of an analogous idea. You may know I am a big soccer fan I grew up playing soccer. And then, once international soccer became easier to watch in the United States on the TV on TV and via the internet. It really reignited my passion for the game so I attend a lot of matches and watch a lot of matches and it’s one of my favorite things to do. And if you’ve ever played soccer or watched it, you may be aware of a concept in soccer called touch, and I wrote a, an article, a thoughtful real estate blog, probably a year or more ago now about this idea of touch and how it relates to this well touch is kind of like Deal Feel and touch in soccer in my own words is, I would describe it as the level of oneness that you have with the ball. And when you have great touch, that means like, it’s like the ball is an extension of your body. You have unbelievable control over the ball and incredible precision with it. If you take a look at an amazing world class soccer player like Lionel Messi, for instance, you can, you can send any passes direction you could just absolutely drill him with a ball, no matter how fast spin this on the ball or height of the ball, pretty much, and he can trap it and bring it down, drop it to his feet like you just cast a magical spell over it or something. And once he’s trapped the ball. It’s like virtually impossible to even take it from him because that ball is like an extension of his foot. He is 100% in tune with that ball. Well, we can think of Deal Feel as basically being a level of oneness so soccer ball. But with all the nuances of a deal and constant monitoring of every little nuance of that deal in real time. So in real estate deals deal field takes place in two main chapters, the first chapter is everything that happens from the moment you’re introduced to the seller in a moment. Your letter lands in their mailbox, all the way through to the point at which they’ve said yes to your proposal and now you’re in contract. And the second chapter is what happens from the moment you’re in contract to the closing table. We’re actually going to spend more focused on the second chapter of this, getting the yes in the first place is obviously really important but as trees we think and talk about you know how to, how to make proposals that will be accepted all the time, and rarely do we discuss the continued Deal Feel that needs to take place throughout the escrow process. After you get that initial Yes. So that’s what we’re going to focus on today. And this brings up a really important, side note, you know to most people, especially lowbrow investors, you know, they think that quote negotiation is debating the deal points like price and earnest money and contingencies and closing date and things like that. And then once they get a yes, the game is over, that the negotiation has been completed. And now they just need to get the property closed, but a tree, you know, we know that negotiation is the entire dance. I mean, from the moment that literally lands in their mailbox to the moment the ink is still wet on the closing documents at the closing table that entire process is a dance of negotiation. The relationship dynamic and the need to keep monitoring and managing that relationship dynamic continues long after you get the Yes, and you put the deal in the contract, all the way through to you becoming the owner of that property. So let’s talk about the first chapter briefly from the introduction to the seller to getting there yes and going to contract you know you meet the seller. And you immediately begin creating rapport with them, you’re making deposits into that relationship capital account. And if that does not ring a bell, go back and listen to the food for thought segment of episode number four of the podcast where we talked about the idea of relationship capital account being like a bank account where you are, depositing goodwill and strengthening your relationship. So you meet the seller you begin making deposits into that relationship capital account. You get to know them. You ask good questions, you listen. You learn what it is that they’re trying to accomplish with the sell their property and you also read them. You read between the lines, not just hearing exactly what they say. But you’re hearing what they actually convey what do they mean beyond just the literal words that they’re saying, you understand how this this deal this transactions property fits into their life. You do your best to understand what’s important to them what the most important thing is right every deal has got one big thing that is the most important to a seller. You learn what their requirements are, etc. And you take all this insight that you’ve gleaned and you craft a proposal for that seller, and you share the proposal with that seller saying look, I’ve been listening hard and doing my very best to understand what you’re trying to accomplish and I’ve tailored the following proposal for you based on exactly what I think is going to hit the target for you. And I’m excited to see if you agree, and I want your feedback and I want to work with you to fine tune this proposal to make sure that it is meeting your needs perfectly. Here’s what I propose, and you go over with them, and you work with them and you find tuning. And ultimately, you come to an agreement. And now you’re in contract to buy this property, and up to this point you’ve been using your deal field skills and your touch, so to speak, to get to this point, you wouldn’t have gotten a yes if you weren’t using your deal field skills and keeping your finger on the pulse of the seller up into this point. But now, now that you’ve gotten your yes it takes on a new dimension and that’s what we’re going to talk about for the rest of this episode. The next chapter the second chapter is what happens between that yes, when you get into contract through closing. And it’s really at this point, I believe that when you’re in contract your deal field skills really kick in. And this is where the uncommon Art of the Deal field skills. Really really comes into play. So here’s a simple analogy that I’d like to give you and actually goes back to fishing, which is, I say goes back to because fishing is a big analogy that we used in the episode about marketing and marketing strategies. Earlier in the podcast. And it’s funny because you probably would think I’m out fishing all the time, as much as I talked about fishing but I don’t really do that much fishing, but I just find that it provides so many neat metaphors and analogies. So when you put your hook and your bait in the water and a fish bites it, what happens to your line. How do you even know you have a fish on the end of the line. Well the tip of the fishing pole sort of dips, and you can see it and it dips because a little fishing line goes taught. And that tightness is a good sign. You know that you gave that fish what they wanted, they bet it, and now you’ve got this fish on the line. But what happens if you know 30 seconds later, you see you, you see or feel that line goes slack. What does that mean what does it mean good things, it means the fish is off the line. The fish is off the hook and you’re not going to be able to reel it in and get it in the boat. So the taught line that you have when you’re fishing is a healthy piece of tension that you need in order to reel that fish into the boat. Well, it’s very very similar in a real estate deal where your seller is the fish, and you’ve got this seller on the line now they’ve said yes, you’ve got them on the line but you need to get them into the boat. You have to reel them in, and that means getting the deal closed. And this really in process and really a timeline is your escrow period. And one thing if you’ve ever done any real estate deals before you know, things can change during the escrow period, things that you want to change can change during that period things you don’t want to change can and all sorts of unexpected things because time is passing, and things happen when time passes, one of the main ideas here is that the best way to, to solve problems is actually just to avoid them in the first place. And the idea of Deal Feel developing and cultivating that art is something that’s going to help you avoid problems rather than help you figure out how to solve problems, you’ll have fewer problems to solve in the first place. If you use your deal fuel skills well. During this escrow period, you’re likely going to be doing some due diligence, and you may have findings that you need to discuss with the seller, that may involve renegotiating certain elements of your agreement with them. This is one of the major points at which things could go sideways, if not monitored and managed well. So when your seller says yes. At that moment, these lines. This line is taught, or these multiple lines, I’m going to tell you I think there’s several lines, and they’re taught at the moment they say yes. And your goal is to keep the lines taught all the way through closing, because that’s how you know you’re going to get close to visit they maintain a level of toughness. But now I want you to visualize that you’re not just fishing with one line on your cellar, but you actually have several lines that you need to keep taught at the same time. And those these multiple lines is multiple fishing lines these multiple hooks that you’ve got in your cellar. And the lines between you and them represent the different nuances and the different sort of categories and elements of the deal. And I find that there are generally five lines that we need to become aware of and to keep taught. Those five lines are number one, the relationship line number two the emotional line number three the rational line number for the life happens line. And number five, the next chapter one. So I want to take a moment here and we’re going to go through each of these five lines, individually. OK, so the relationship line, the relationship line is the dynamic between you and the seller into personally. And so that the seller felt very good about you, personally when they said yes, because you’ve been making those deposits into their relationship capital account it paid off. And they felt very good about you when they said yes and then important point here is they have to continue to feel good about you and the relationship they have with you, especially if there’s going to be seller financing involved in this deal, and as a tree, there is more often than it is for low growl investors. It is especially important that they continue to feel very good about who you are. I recently had a situation where this particular element of the deal, this particular line went slack. And it went the whole deal went sideways on me completely out of the blue, and I gotta say like, I think without patting myself on the back too much. I’m pretty darn good at this. This is one of my real strengths, I think it’s one of the keys to whatever success that I’ve had, has been Deal Feel, and having good Deal Feel skills, especially with the relationship line. And still, this just totally hit me out of the blue, and I don’t know exactly even what happened. But once I presented my due diligence findings. Back to the cellar and said hey I discovered a few things here I would like to discuss with you. That set off a chain of events that killed the whole deal. I think in hindsight she took these findings, personally, almost as if it was a personal attack or if I was saying, they found a defect in her or something like that even though we were talking about things like foundation and electrical systems and whatnot. I think somehow she took this as if I was attacking her. And it just absolutely killed her an inner personal dynamic, and it killed the deal and I was standing I’m still unpacking even trying to figure out exactly what happened and exactly what I can learn from that. But the relationship line is one that you have to manage so closely and up until that moment I felt like that line was nice and taught and perfect couldn’t be any better and then just so suddenly. It went slack. The emotional line is the way that their heart, the sellers heart is feeling about the decision they made to sell the property. Often, you know properties are emotional, especially with those who have owned properties for a long period of time, they may have memories that are tied to the property, they may have a lot of nostalgia sentimentality but around the property there might be life events that were tied to the property, you know if they are living or have lived in this property in the past or their kids live there they you know they bought it for their kids to live in when they went to college or somebody passed away during that time, life events are anchored to properties, many times. Longtime tenants living there for instance, with whom the sellers had a personal relationship. That’s a common one, feelings of guilt when selling you know feelings of guilt about not being a good steward of the property or not being a good steward of the tenants. But people have to get to a point where they have peace in their hearts about their decision to sell a property. And I’m working with a seller right now, who has a really strong bond with the tenants in the building and sort of a fatherly type of feeling I believe that He has for these tenants and it’s very important to him, to make sure that when he sells the building those tenants are taken care of. And he’s even said that he is planning to set money aside from the sale to give them each as kind of a going away gift and he’s, he’s had them under market rents for a long time and he wants to continue to see them do well, even though he realizes that the rents are likely going to go up when he sells the property. He wants to do right by them. This is really a big issue for him and I have to be sensitive to that issue, or I will not be able to get him to say yes. And it’s not just when I make my proposal, but it’s also throughout escrow. If he senses that as we get towards escrow that I’m moving towards something that’s, that’s not going to be in the best interest of his tenants that’s going to really cause problems in our deal I’m going to feel this line this emotional life, go Slack, and it would kill her deal. The third line is the rational line. This is the way that their head is feeling about their decision so they felt at the time they said yes that it was a smart thing to do, but the escrow period, one of the risks of an escrow period is that it gives them a lot of time to rethink it and start questioning themselves. It gives them a lot of time to talk with other people like their kids or their CPA or their attorneys and ideally they would have spoken with those people before they said yes, but it does give them more time to start rethinking things, it’s sometimes the rational line is connected to the emotional line, you know if they start second guessing things up emotionally. They may start looking for rational reasons to justify their emotional changing of their mind right just like they say that we make decisions emotionally and then justify them rationally. The same thing can happen here. Maybe they start focusing on their capital gains obligation or they do some kind of a different calculation on that or, or they start thinking about boy if I’m providing the financing or what’s the process going to be like if I need to foreclose, or they’re wondering if they should have listed the property and they could have got a different price or something like that. There are lots of different things that could come up rationally for the seller. I once had a seller on a four Plex that I was buying and everything was going smoothly. And then they started acting a little funny like they wanted to back out of the deal, because there was seller financing involved and they started getting worried about what would happen if they got paid off too early. And they didn’t want to get paid off too early because it was going to trigger their taxes and was going to screw up all their financial planning around their retirement, so they wouldn’t talk to an attorney and then I get an email from this attorney saying my client may want to bail from the transaction and, ultimately, we did get it all sorted out by simply pulling, pulling it all apart just talking through every concern point by point and getting them comfortable with it, but it was a major risk to my deal. And that deal had implications to me, with lots of other things I was working on I had several deals that were kind of all interrelated and intertwined. And if that one had gone sideways, it really would have screwed up not just that deal but a bunch of other related things for me. So, the rational line is another line that’s important to keep taught at all times. The fourth one is what I call the life happens line. This is where there are other unrelated things in their life that come into play that affect their circumstances and make them. Now, second guess this particular deal that they’re doing with you because you know every transaction is part of a bigger picture for the seller. They’re not just selling this property in a vacuum, it’s affecting and related to and connected to other parts of their life, just as it is for you as the buyer. And so sometimes other elements of that bigger picture can change. And, which could be unrelated but could still screw up your deal. Here’s a few examples. What if, you know, heaven forbid your sellers diagnosed with a disease. During this period, they start rethinking everything in their lives. What happens if they get into some kind of a legal issue that’s unrelated to this but now they’re feeling like their plate is too full and they’re overwhelmed and they just can’t deal with this at the same time. What if their spouse leaves them. What if the house that they’re playing move into burns down or, or something you know it could be anything that comes up. You know those commercials for the insurance, where they say life comes at you fast. Well, those commercials are great and on point for a reason, like that, that’s a very, very real issue. And at 20, you know, an escrow period, whether it’s just a few days or it’s 20 or 45 days or whatever it might be, is a lot of time for life to happen. And so, one time I was sitting at a restaurant table negotiating with a woman in her husband, about a deal it was actually her property, but he was certainly part of the process and just kind of helping her evaluate everything and we’ve been negotiating for quite a while. And we’ve been moving nicely towards that sense of agreement, and we’re just kind of fine tuning some of the final details. And she said to me, she looks me right in the face while we’re sitting there in this meeting and says, so one of the things I need to adjust here as we talked about having. about having the solar financing of an eight year term, but I think I just want to do six years. Jerry here. That’s her husband Jerry here doesn’t know this yet but there’s some new developments with my health and I just don’t think I want to go out as far as eight years. And you can imagine the look that Jerry gave her like what I’m finding this out at a restaurant table with the buyer of a piece of real estate across the table for us, you know, but life had come out her fast I still don’t know exactly what that was but it absolutely impacted her decision making, about that deal right then. And so that is a line that you need to keep taught you need to have your finger on the pulse of this life happens line all the time. And the fifth and final of these lines is what I call the next chapter line. This is their level of engagement in what is coming next for them in their life. And again you know the deal is part of a bigger picture for them. It’s enabling them to move toward something else that they want in their lives and their level of engagement and excitement about whatever that next chapter is for them is a big issue. And the more committed to it that they are the top of the line is, and the more motivated they are to see the steel get done. If you think back to episodes, 11 and 12 the last two episodes when I was buying the building from Cindy and Stan. I knew that their next chapter was really important to them and Cindy was really fixated on this house that she wanted to buy beach with her part of the proceeds of the deal. Stan, her brother I knew was really fixated on getting some cash to solve his own financial challenges. And I knew that the later we got into this deal and the closer we got to closing and the closer we got to them, achieving those goals, the less that they would want to risk it all falling apart. In other words, I was expecting because I understood their motivations that their next chapter line would get more taught and more taught and more taught. As we got closer to closing because they would be further and further and further committed to the idea of what was coming next for them and they would not want to see that slip through their fingers. But what if something on the exact opposite end of the spectrum happen. What if cities deal to buy that each property fell through. Now all of a sudden by line with her by next chapter line with her would go slack because the next chapter, just fell apart on her and so now her motivation to get something done with me, would be lesson. You know one thing you’ll find with a lot of sellers, is that once they have agreed to sell a property in their mind they haven’t sold, and sometimes you’ll even hear that language literally with people when they’ll say oh yeah I sold my property, and they don’t mean that they actually sold their property they mean their property is pending. And you’ll ask them, you know, when did you close What did you get paid, oh well it doesn’t close for three weeks, but even their language their indicates that they feel like it is sold. And so that’s kind of an important milestone when you get the property and contract is there, the emotional and commitment to their next chapter. The line gets even tighter, in most cases because they feel like the property has been sold, but monitoring that is super super important. So what is the benefit of Deal Feel and what is the benefit of cultivating your Deal Feel skills and your muscle, and that art, and monitoring the lines and always keeping your finger on the pulse of the deal in all of these different ways. Well, it certainly gets more deals to closing, that’s for sure because fewer deals are going to fall through because you’re monitoring all of the different elements of risk and keeping a proactive finger on the pulse of those so you can avoid problems before they become big problems by keeping your finger on that pulse. Sometimes, oddly enough deals can actually get better throughout the escrow period, through continued negotiation. And one of the things that it can happen a lot is that the Deal Feel allows you to know when to quote play your cards. So, again, now to a tree, the negotiation process is a dance and the dance starts when we first meet the seller and it goes all the way through to the closing documents and little details throughout that entire process even up until the day before closing can certainly be fine tuned, nothing is really set in stone. You know it’s not done until it’s done. In other words, but what I found is that when you ask for little adjustments, is just as important as what adjustments you ask for. In other words, the timing of when you play your cards can be just as important as what cards, you click, and you need to make strategic decision about when those little negotiation moves those little cards that get played. When that happens, and you do that, in light of the tightness of the lines and if you don’t know how top those different lines are. You can’t make a good decision about when to play those cards and exactly how to play those cards. Again, if you think back to Cindy and staff from episodes, 11, and 12. One thing I mentioned to you in that story is that I learned about a month before closing five weeks before I was supposed to close that I was going to need to delay the closing date, not by a lot but by about a week or so. Due to another property, I was selling closing, I just simply would not have the money to buy Cindy and Stan’s property, until I got paid from this other sale. And I had to strategically decide when to play that card, went to ask for that little bit of negotiation and I knew that if I waited until closer to the closing date. I would have more leverage because that line would be so tight with them they would just be so close to getting their property sold and being able to do the things that Cindy and Stan wanted to do that I’d have so much more leverage in my negotiation when I asked for that delayed closing by a week. So I chose to wait to play that card, and it gave me a lot more power later than it would have been asking for something new in a deal. When any of the lines are feeling slack is much more likely to cause that deal to fall apart than anything else. So what happens if you sense a line going slack. And that’s your job is to be constantly monitoring it and sensing is something going slack. Well, it means that your risk of your deal falling through just went up, unfortunately. And so what it means is you need to be checking in with that seller and getting a better closer read. If you feel the line going slack you need to move towards them, and better understand what’s actually going on, so that you can do what you can to make any adjustments, and you may find yourself needing to ask them directly. How are you feeling about XYZ, you know I’m sensing some concern for me on this topic or that topic. And to get them to tell you directly. And then the next question is you’re trying to figure out what you can do to make that line taught, again, so that you avoid a problem, or you sense it in advance. And you avoid it by simply addressing it proactively, and preemptively. Sometimes there are other lines that can be further tightened to offset the slack that you’re feeling in one line, like for instance, if the emotional line feels like it’s going slack with you. Perhaps pulling the rational line, even more taught could help right if the sellers feeling like, oh boy I just don’t know if I have the heart and the stomach to sell this property. I just, you know, my kids are going to be upset when they know that I sold the family home, or whatever, you might tighten the rational line by reminding them, and how well this sale actually fits into their retirement planning plans and their capital gains deferral plans and how it’s helping them get to the destination that they’re trying to get to. So you’re gonna tighten the rational line in order to compensate for the slacking and the emotional line. And then the other thing you might just do, is you might just need to hurry up and get this deal closed. Before the slackness in any of these lines becomes a problem. And that’s definitely one of the benefits of a shorter escrow period is that there’s less time for lines to go slack. So what are the lessons here. Well, the lessons are simple, and there’s a few of them. Number one is just always be sensing. Be sensing, what’s going on around you as consciously, as you can be. Be aware of the lines so you may even go so far as to create a little worksheet for yourself, where you print out the little template with each of these five lines and every Monday, you look at it and say how does this line feel right now. And if you get to one of the lines you say, I don’t know how the next chapter line feels Well, that’s a clue that you need to get back in front of the seller and just be constantly monitoring that you need to reach up and put your finger back on the pulse of that part of the deal to feel how it’s going. You need to stay in good touch with people you can’t have any sense of Deal Feel when you’re a long ways away not talking. They’re not seeing them. And so you need to be unique, you can contribute to your art of keeping the line taught by staying in good touch with them, don’t go for more than just a few days without talking to them. Control the things that you can control to the best of your ability. Keep making deposits into the relationship capital account so that your relationship line is always as tight as it can be. Those are the things you do have control over so make sure you’re doing the best that you can. And remember, overall, you’re dealing with people here, humans, and you’re a human too. And we humans we are complex and imperfect creatures. And so we need to constantly be accounting for our own humaneness, and the effects it can have, and trying to just give some margin and a little cushion for that, and expect that our humaneness is going to come up and be prepared to handle that. So thanks again, as always for listening to yet another episode of Sleaze-Free Real Estate Investing. On the next episode, we’re going to be discussing how to prepare for a meeting to renegotiate with a seller after due diligence so this fits really nicely with our deal field conversation because this is going to be a critical milestone in your overall transactional relationship with this particular seller. Again, please do yourself. And please do us a big favor by hitting the subscribe button in your podcast app. And by rating and reviewing the podcast so you’ll know when the next episode comes out, and you’ll be helping other Thoughtful Real Estate Entrepreneurs like you find this podcast reminder that show notes, including transcript can be found at www.thoughtfulre.com/e13. And until next time, this is Jeff from the Thoughtful Real Estate Entrepreneur, signing off.
Leave a Reply