Page 115 - Trump University Commercial Real Estate 101

Locking in Y our Profit

A MATEUR M ISTAKE: “ H ONEST PEOPLE GIVE
THEIR BEST OFFER UP FRONT. ”

When I started to negotiate my deals, the seller or broker would ask
me how much I would like to offer on the property. Like a dummy,
I would tell her my real number.
Why is that dumb? Because naturally the broker or seller would
counter with a higher price. I ’ d be immediately forced into one of two
bad alternatives: Either I could violate my own best offer, or I could say
“ My offer is fi nal. ”
Now what room did I just give the seller to negotiate? I ’ m making
the seller look bad by insisting that the only party to be fl exible on
price is the other person.
I lost a few deals before I realized that it ’ s not a matter of honesty, but
of negotiating manners. People want to feel good about how the negoti-
ation turns out. They frequently come into a negotiation feeling that the
other side is better prepared, or in some way has the upper hand.
When you position yourself so that you can come down on price,
or throw something else into the deal to sweeten it, you enhance that
person ’ s self - esteem instead of squashing it.
If you ’ re not already convinced, think how you would feel if the
next time you made your first offer for something expensive, the other

person grinned broadly and said “ Yes sir! No problem! ”
You would instantly feel that you were being taken advantage of,
because the other person is so happy. It would make you wonder how
much money you had just left on the table. If, instead, you had to go a
couple of rounds with the other party, and each side somewhat reluc-
tantly agreed to a middle price, you would feel better. When your boss
or spouse asks “ How did it go, ” you would be able to say “ Well, I went
up on price, but he had to come down, too. ”
One time I put an offer on a property in Montgomery, Alabama. The
owner was asking $ 2.2 million. I did my numbers and the property
penciled - out at that; in other words, it was worth that price. I offered
$ 2.2 million, thinking, “ Great, we have a deal. ”
The seller came back with $ 2.4 million! I had never heard of such
a thing before. He had just experienced the feeling that I was taking
advantage of him, when I gave in too quickly.
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