When we are having a conversation with a Seller, we must be able to respond to the Seller’s comments and questions in real-time. And because we’re human, we have a natural tendency to “react” to their comments—either giving them the impression of agreement or disagreement. But often times the best way to respond is not to agree or to disagree, but to gather more information and keep the conversation moving forward. In this episode, Jeff shares a powerful three-word sentence you can use as a go-to, all-purpose tool to respond to Sellers, and explains why it’s so powerful.
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You know, when we’re talking to sellers directly, like we do often in an off market, relationship based negotiation, we find ourselves having real time conversations, of course, and we have to feel confident in what we’re saying, we have to feel confident in how we’re responding maybe to what the seller is saying in that particular moment. And admittedly, it’s a little bit of an art to be nimble on your feet, and to know kind of what to say in response in that exact moment. And in this episode, I want to give you a three word phrase that you can use in a very versatile manner. And of course, because that’s just who I am, I need to explain why this is so important. So let’s just keep the theme song. We’re going to jump right into this important discussion. Welcome to racking up rentals, a show about how regular people, those of us without huge war chests of capital or insider connections, can build lasting wealth acquiring a portfolio of buy and hold real estate. But we don’t just go mainstream looking at what’s on the market and asking banks for loans, nor are we posting WE BUY HOUSES signs, we’re just looking for, quote, motivated sellers to make lowball offers to. You see, we are people oriented deal makers, we sit down directly with sellers to work out Win Win deals without agents or any other obstacles, and buy properties nobody else even knows are for sale. I’m Jeff from the thoughtful real estate entrepreneur. If you’re the kind of real estate investor who wants long term wealth, not get rich, quick gimmicks or pictures of yourself holding fat checks on social media, this show is for you. Join me and quietly become the wealthiest person on your block. Now let’s go rack up a rental portfolio. Hey, thank you for joining me for another episode of racking up rentals. Show Notes for this episode are at thoughtful our e.com/e 166 Please do us a big favor by hitting the subscribe or the Follow button and your podcast app really helps fellow thoughtful real estate entrepreneurs to find this show and of course makes sure that you don’t miss anything that’s coming up honored with today’s episode, I want to tell you the story of a seller I spoke with a few years ago and a property that I ended up buying. And in fact, I would say that this property in the strategic big picture sense was maybe the most important acquisition. I did. So I sent out a batch of letters as I do. And this batch of letters was going to small multifamily properties, five units to eight units in that range. And I got a call back one day from a guy in let’s call him Don. So Don calls me back from my letter. And he says, Yeah, you know, I actually have been thinking about selling this Plex. And you know, the county tax records say that it’s valued at a million dollars. But I think that’s out of sight. Okay, pause. If this were a movie, this would be a freeze frame, there’d be a record scratch sound. Let’s pause right there. And when he said, but I think that’s out of sight. Those were his direct and literal verbatim words I remember, like it was yesterday. So let’s pause right there. This is a critically important inflection point in this conversation. Already, we’re just a few minutes into the conversation over the phone, we have not yet met in person, I haven’t even had the chance to ask and suggest that we meet in person. And he says those words. And this is an unbelievably important inflection point in the way this whole negotiation went. And I knew and you should know that what I said next, and what you would say next, if this was your situation, will have a major impact on the deal. Okay, what you say next in response to Don saying, but I think a million dollars is out of sight has a major impact on how your negotiation will go. Now, what are the options, sort of for the ways that we could respond here? What are we as human beings sort of naturally inclined to do what is our knee jerk reaction sort of naturally inclined us to do? Well, we want to react and we want to respond in some way. It’s very hard for us to hear a statement like that and not to really respond. And so what are the types of responses that we could have? I mean, generally, energetically as we hear, don say, this is worth a million dollars according to the county tax assessor. We like energetically inside us we tend to have like a YES energy or a no energy, right? We’re immediately kind of going like yeah, that makes sense. That seems reasonable. If we’re judging it immediately without even thinking about it, we’re just we’re judging it. And inside our head, we’re saying, yeah, that seems reasonable or no, that doesn’t seem reasonable, right? So the two things that we might do if we weren’t being really careful, really strategic and really disciplined in how we respond to Don is where we’re either going to say something that sounds kinda like, okay, yeah, I’m fine with that, or something. That sounds kinda like, I’m pushing back on that I’m casting doubt on that. Right. So in real words, if, if Don says, the county tax assessor has it at a million dollars, the the Yes, version of that might be something like, okay, sure, that makes sense. Now, you might say something like that, which you’re not saying, Great, I will buy your property for a million dollars. But you are sort of indicating an overall like approval Greenlight. I’m okay with that thumbs up sort of an energy back to Don, or you or not, so Don says the county tax assessor has this value that a million dollars, and you say something like, Well, okay, well, the county tax assessor doesn’t really know exactly what the market’s like, you know, you might say something like that. But either way, our natural inclination is to kind of give a yes, energy in response or a no energy and response. Why? Because simply, that’s what’s happening inside our head. And it’s really hard sometimes for us not to let what’s inside our head, just come spurting out of our mouths, immediately thereafter. But what if there was a third option? What if there was a third option not to give don a yes, energy or a no energy? And that’s what today’s episode is about? What if instead, you said, Tell me more. Tell me more. So Don says to me, and this is how it literally went. Don says to me, the county tax assessor has the property valued at a million dollars. But I think that’s out of sight. And so what I responded to Don with and I said was a version of Tell me more. I said, Oh, tell me. What do you mean by that? That I think that’s literally what I said was, What do you mean by that? Which is just a different to synonymous expression for Tell me more. And Don says, that value just seems ridiculously high to me. Now, let’s pause there. Again, if the seller says the county tax records are a million dollars, but I think that’s off, what are you assuming that they probably mean by that? They probably mean, that’s low, because generally speaking, right? People are going to make arguments that are in their best interest. And so generally, you’re going to you’re going to expect that Donna’s saying the county tax assessor’s got this at a million dollars, but that’s low.
And if I had made the assumption that that’s what Don meant, then I would have been toast, I would have been negotiating against myself. But fortunately, in that moment, I had the wherewithal to just say, Tell me more. What do you mean by that? And so Don says that just seems ridiculously high to me. So I know now that I have just set a ceiling on what our negotiation could possibly be. And inside my brain, I was thinking yeah, billion dollars for this property doesn’t seem unrealistic. But I already know now before I even continue this conversation with Don, that it’s not going to be any more than a million dollars. And it’s going to be less than that, because he’s basically given me like a book end of a reference point in our conversation. So by exhibiting kind of the discipline to just instead of giving him Yes, energy or no energy, but giving him a third option, which is Tell me more, I negotiated a better deal by resisting that temptation. And by asking him in this neutral manager manner, to elaborate on what he meant. Here’s the problem of what I see and hear about, I believe a lot of people in real estate investing kind of doing wrong, in my opinion, normal real estate investor mentality versus thoughtful real estate entrepreneur, mentality. Most investors think of negotiation as being about trying to feel out price and terms immediately, and to quickly evaluate whether price and terms are worth continuing to invest energy in discussing or to figure out if this seller is you know, quote, We’re unquote not motivated enough, right? So when a seller says to them, yeah, you know, I’m thinking around a million dollars. For instance, the normal real estate investor mentality is I’m trying to sort out the leads, that will just waste my time very quickly. And so the temptation is, of course, to react to that. But whereas normal real estate investors see a seller conversation, as I’m trying to ascertain price and terms immediately in the first minute, or as soon thereafter, as I possibly can. US trees as thoughtful real estate entrepreneurs, we see this more as two phases of negotiation. The first phase is what we call here, solve the person. It’s about being a detective, it’s about understanding and gathering information, gathering insights, and information and insights are different things. informations can be very quantitative, but insights are very qualitative. We’re trying to understand our audience, before we go into the second phase, which is utilizing that understanding to then work out price and terms with the seller, right. So I, when I’m talking to a seller have absolutely no expectation or desire, or plan to try to work out price and terms in the first conversation. I might not even want to work out price or terms in the first three conversations. But I take kind of an extreme approach to that. But the point is definitely not that we want to be trying to create price in terms in an early part of the conversation, we are just trying to understand the lay of the land here. who in the heck are we talking to? What do they think about every aspect of this conversation? Who is my audience, so that then later, once I know my audience, I can use that understanding, to try to work out a deal with them. The magic of the three words, tell me more. And of course, you can have other versions of telling me more right? You might say, interesting, I’d love to hear more about that. You know, you might say, say more on that topic, right? You might say like I said to Don Oh, tell me, tell me what you mean, please, right? You can say tell me more in different ways. But if you just think of these three words, they’re extremely versatile as a go to expression. I mean, that’s like a three word expression. What is that 10 letters total 10 letters you can have in your back pocket that you can pull out in almost any aspect of a conversation. If a seller says something to you, and you don’t know how to respond, this is kind of like your all purpose response to them. Now, if they ask you a question, like, how many properties do you have, you’re not going to respond by saying, Tell me more. But if the seller says something, and you’re not sure exactly how to interpret it, or you realize that you’re at risk of making an assumption about how to interpret it, right, which was the situation with me and Don, I was at the risk of making an assumption about interpreting what he meant, as I would have assumed that he meant that that value from the tax assessor is too low. But tell me more as an extremely versatile go to expression. Tell me more keeps the conversation moving forward. Without you agreeing or disagreeing with anything. It just keeps that conversation moving forward, because you need to keep the conversation moving forward, if you expect it to go anywhere. But if you start agreeing or disagreeing, that can either paint you into a corner by kind of agreeing to things you shouldn’t be agreeing to or giving the impression of agreement, right the YES energy, or I can kind of put a dampened overall feel in the conversation if you’re giving the no energy. So tell me more. Keeps the conversation moving forward without agreeing or disagreeing. Tell me more also shows the seller that you are seeking to understand them, right? When you say tell me more, you’re really saying I want to understand your perspective better. Can you elaborate on that because I really want to understand it. That’s the vibe that comes through and that’s a very good thing for our approach to relationship based negotiation. Tell me more gathers more information for you and more insights so that you know your audience you know, their perspectives on everything, their attitudes, their beliefs, their needs, their wants? When you know the seller how the seller sees themselves, how the seller sees you how the seller thinks you see them how the seller sees the current market, how the seller sees their property. As a whole, how the seller sees their overall set of options that they might have. We need to know everything about the sellers mentality. So my friends, tell me more. Just remember those three simple words. That’s just 10 letters. Tell me more. This is your versatile, go to All Purpose response that keeps a conversation moving forward, gathers more information. And ultimately, thus gives you a better lay of the land so that when it comes time to try to negotiate price and terms and everything else that we’re going to negotiate, you have as much insight and information as possible. That is it for today’s episode of racking up rental. So again, show notes can be found at thoughtful our e.com/e 166 Please do us a big favor and yourself a big favor by hitting that subscribe or the Follow button in your podcast app. And if you could take just a second to rate and review the show. I’m so grateful when I see those. I see every single one. It only takes a second. And it actually really helps us here at the thoughtful real estate entrepreneur as well because it shows the platforms that you’re listening and paying attention and you like what we’re doing. Did you know that we have a Facebook group for thoughtful real estate entrepreneurs too. It’s true. It’s called rental portfolio wealth builders. We’d love to have you join us over there just go to group dot thoughtful rt e.com And the magic of the internet will redirect you right to that page. If you liked this episode, also please take a screenshot of it. Post that screenshot to Instagram and you can tag us on Instagram we are at thoughtful real estate all spelled out. Well, I’ll see you in the next episode. Until then, this is Jeff from the thoughtful real estate entrepreneur signing off. Thanks for listening to racking up rentals where we build long term wealth by being when when deal makers. Remember solve the person to unlock the deal and solve the financing to unlock the profits.