Wednesday, January 9, 2008

Why would anybody sell a property for under market value?

Their specific motives are varied and many, but one thing is probably true: The person who put together the deal these people agreed to likely had strong sales and negotiation skills.

As important as it is to know the investment techniques and understand how the numbers work, it's also important to recognize that interpersonal skills play a key role in real estate investing. As an investor, your first "product" is yourself. People want to do business with people they like and trust, so you need to show them that you are likeable and trustworthy. You need to sell yourself to buyers and sellers, tenants, fellow investors, funding sources, and all those other people who play a role in the process. It's important to recognize that this isn't about manipulation or deception, it's about communication and fairness. It's about finding out what the other person needs and showing how your proposal will meet that need.

You're probably involved in sales more often than you realize. Whenever one person wants another person to take a particular action, something is being sold. In commerce, the action is usually the purchase of a product or service. But sales also occur when a teenager is angling for an extended curfew, when a parent is trying to coax a toddle to eat vegetables, when one spouse works on convincing the other that a vacation at the beach is better than a trip to the mountains-essentially, whenever two people are communicating, elements of the sales process are occurring. That's why it makes sense for everybody to learn selling skills, whether you see yourself as a salesperson or not.

A good way for a real estate investor to approach sales training is to look for a program that teaches sales skills along with negotiating and also touches on marketing. If you aren't marketing your business, people won't know to contact you when they have a real estate problem you can solve- and you'll miss out on a lot of potential deals. If you find the deals but can't get sellers to accept your offers or buyers to pay your price, you won't be able to close on the transaction-and if you don't close, you don't get paid. If the other party is receptive but not entirely satisfied with your proposal, you need to know how to negotiate so you can work out the details.

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