Any experienced, successful investor will tell you that learning to listen to the seller is one of the most important skills you can develop. Many communication problems that arise during negotiations can be traced to poor listening skills. When negotiating with a seller it is your objective to determine their needs and wants. Beginning investors tend to think of negotiating as trying to persuade a seller to do something, which requires you to talk. But it is very difficult to persuade someone when you dont know what their motivation is. It is a documented fact that the most successful sales people are those who have the ability to uncover more of their clients needs. You will not discover the sellers needs if you do most of the talking. One of the most common mistakes that occurs when negotiating is using your listening time to think about what you are going to say next. In his landmark book The 7 Habits of Highly Effective People, Steven Covey points out that most of us listen autobiographically, meaning we are not really listening to what the speaker is telling us. Instead our minds are busy forming what we will say next in response. This undermines your ability to analyze and understand where the speaker is coming from. It is also a difficult habit to become aware of and correct. There are two major types of listening skills, Attentive and Interactive. The attentive listener is motivated to listen. Attentive listeners understand that the person who gets the most information from a seller will have the best chance for a successful negotiation. It is a good idea, prior to meeting with a seller, to determine what information you would like to uncover. Set some goals for specific areas that you want to try to gather information on. The more you can learn, the stronger your position will be. Interactive listeners ask questions. The goal here is to refine the information you have received from attentive listening. Your questions should move from the broad to the narrow, as you attempt to bring the sellers needs into sharp focus. Being able to move seamlessly from attentive to interactve and back to attentive will greatly improve your negotiating results, and help you formulate offers that will be more appropriate for your seller. Some basic interactive techniques for questioning a seller are as follows: 1. Clarifying: Can you please clarify your comment about the mortgage? This may get the seller to add more details than they might have intended. 2. Verifying: A very useful skill for being sure you heard what was actually intended by the seller. As I understand it, you dont need much cash up front. Is that correct? 3. Reflecting: This is acknowledging or paraphrasing the sellers statements with an empathetic tone. Reflecting can be a very effective way to get someone to open up and say more, where a direct question would result in an evasive answer. To truly engage in reflective listening you must make no judgements and offer no opinions or solutions. For example, if a seller complains that the last investor who called made a ridiculous offer, you might respond, It sounds like you were really upset by low monthly payment in that other offer. This opens the door for the seller to comment further, and perhaps tell you just what they have in mind. You should also watch for non-verbal hints as well. Body language, tone of voice, and the rate of speech can all be important clues to the sellers needs or intentions. A sellers words may communicate honesty or conviction, while their body language or tone of voice may reveal the opposite intentions. Clearly the skills involved in negotiation and effective listening are very important for a successful real estate investing career. These skills take time and practice to learn and use effectively. A couple of books you may want to check out are The 7 Habits of Highly Effective People, by Steven Covey, and Its Negotiable, by Peter B. Stark. |
