Wholesaling real estate requires thinking on your feet and using your negotiation skills to make deals with both buyers and sellers. Learning how to negotiate can help wholesalers find better deals and perhaps even more deals – leading to more money in your wallet.
The basic premise of wholesaling real estate is that you find a seller who needs to move a property quickly (perhaps because of foreclosure or relocation) and offer to find a buyer within a period of time – typically one month to six weeks. Then, you locate a buyer who is willing to pay slightly more for the property. The transaction takes place and you pocket the difference.
Obviously, negotiation is a large part of wholesaling real estate. If you’re looking to wholesale, here are a few tips you can use to maximize your deals:
● Listen more than you talk. Whether you’re speaking with a buyer or a seller, you can learn more when you talk less. Silence makes people uncomfortable and may lead them to divulge additional information or even to accept an offer that is advantageous for you.
● Focus on face to face. If you’re meeting somebody for the first time, don’t negotiate over the phone. Instead, schedule a face-to-face meeting. This can help you establish a rapport, and that could lead you to a better deal.
● Plan an alternative (or three). Before you head into a deal, make sure you know exactly how much you’re looking for – then plan an alternative. You may be able to talk a buyer into paying slightly more if you can close faster, or perhaps you can get a seller to wait a bit longer if you’re able to sell their foreclosure for slightly more. Coming to the table with multiple alternatives makes it easier to get what you want.
● Keep an argument in reserve. If you know the area (and you definitely should), have a few facts ready to persuade a buyer or seller. Holding back, say, the average price of homes in the area may allow you to bring that fact out later and sway a seller towards lowering their price.
Negotiation is a tricky art, particularly when major transactions are at stake. Following a few simple tips can improve your skills – and help you make more money. Whether you’re trying to sell a foreclosure quickly or pick up a new seller, learning to negotiate can help your wholesaling business immensely.