Video Transcription:
Hey guys, the fear of negotiating... And I think this is one of the biggest fears that people have. They're almost... Because somebody puts... It's common decency to say that if somebody puts something on for 200 bucks that you should offer no more than 195 or maybe 190. It's like, "Screw that." Offer whatever you think it's worth. In fact, offer whatever you think it's worth that they will take. What I mean by that is I'm a big fan of the ridiculous offer. We go in, and we offer ridiculous amounts, and what we tend to find is that we go into a negotiation and part of the negotiation is people are afraid to almost insult people.
It's like, "Do you know what? Do you know what it takes to earn £5,000 or $5,000?" Think about how many hours you have to work to earn that. Now, if you could get that amount effectively off a property, is that not worth it? Because, for me... I mean a lot of people are sort of... It's a £200,000 property and they'll offer 195 or 190 or maybe 185 even. You're sort of like, "Okay, fair enough. That's fine," but the reality is why not go to 183? Why not go to 181,700?
A lot of times when I put my offer in, it's not a rounded number. It is an exact number. The interesting thing is yes, we may negotiate up to... What I tend to find is people come back to me with a rounded number, but I love putting in the exact number and not a rounded number because then they're sitting there going, "Well, why has he put that? How's he calculated? He must be doing calculation."
In any case, let's talk about negotiation. One of the things I love doing is ridiculous offers. I put a ridiculous offer down low. Then what we do is then we work our way up to where we get a deal. Now, part of the thing is there's two aspects to negotiation. First of all is price, and unfortunately that's where most people stop. Then the second one is terms. What you do, and what I do is I negotiate the price and then I introduce the terms and negotiate them.
What tends to happen is a lot of people once we get the price sorted, then you go onto the terms. By that stage, they're like, "Okay, so it looks like I got a deal at that. I'm happy with that." Now the terms don't necessarily cost much. Depending they can, but it's all those little things which actually drive the price lower. If I can transfer some of the costs from me to the buyer, I'm lowering my overall price that I'm going to pay, and that's good negotiation. One of my first mentors in business taught me that.
He was the extreme. He was a prick to be fair. I was almost embarrassed, and in fact his style of negotiation... This is what I'll say is sometimes you get these guys that negotiate so hard and they want every last penny out of everything that they waste so much time. Then what ends up happening is that... Not so much in property deals because property deals you can do a lot more, but certainly with business, if you negotiate every spare ounce of profit for the seller and then they have to fulfill that deal...
We had a website once, and I remember we negotiated down to... I think it was from 50,000 to 15,000, but we wanted all these sort of things in. By the time I got to it, we never ended up getting the website. We end up losing the money because basically there was no money in it for them. There was no motivation. It just took so long that by the time we actually got anywhere the technology was defunct. If you know how technology... This is going back into the '90s. '90s? Yeah, '90... Wow. '90s, wow. Showing my age now, aren't I?
Bottom line is price terms, don't be afraid to throw in a ridiculous offer. I've never seen anyone walk away and say, "Bugger off, you've insulted me. I'm leaving. Most times they're happy to have an offer. Yes, they may blatantly turn it down, and yes, the agent may blatantly turn it down and say, "I'm instructed not to accept offers underneath this," but then what you do, you throw them out. I can guarantee you that when they put an offer in like that, they say, "No offers under 170. Not even going to present them."
So you go, "Okay, well that's fine, but my offer's not 170. My offer's 165 and these terms." "Ah, okay, well, I haven't really talked to the vendor about the terms, so I'll present that to them." So now you start the dialogue. There's lots of different ways you can go about this. You have to become creative if you're going to drive the price down and get the best possible price because always consider how long it takes you to earn that extra two grand, five grand, 10 grand. Whatever it is you can get from the asking price off, that is time that you can then spend with your family and that. Or that's just money for jam. Guys, have a great day. Live with passion. Subscribe and comment down below. Love speaking to you. See you later, bye.
