The secrets to negotiation are often simpler than you think. There’s no double-talk, bribing, or harshness necessary to get what you want. If you know what the other side wants (which you probably do already), you’ll most likely have enough to negotiate successfully. So why aren’t most people winning negotiations? Well, when everyone is buying or selling to get the most they can, it’s often the people who create wins for their opponents that come out on top.

David Greene would know this. He’s one of the top real estate agents in the country and is the host of the biggest real estate podcast around (that’s us!). His new book, SKILL: A Top-Producing Agent’s Guide to Earning Unlimited Income, is more than a handbook for real estate agents. This book also details how almost anyone investing in, buying, or selling real estate can win negotiations easily.

David spends time today outlining the seven negotiation tactics he has used in the past to lock down deals for buyers, sellers, and himself. You’ll hear real-world examples of when David and co-host Rob used these tactics in their own investments plus exactly how to formulate each of these tactics so you can ultimately get what you want.

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David:
This is the BiggerPockets Podcast Show 622. We had to get heard to be our advocate in that scenario. And no listing agent wants to have to go to her clients and say, “I got beat.” So, instead what we do is we coach them to go say, “Hey, we took a really good shot. We listed it for as high as we possibly could.
We didn’t get any buyers, but good news, I got a person that’s still willing to pay more than I think anybody else will.” Now, she’s aligned herself with them against us. It makes it easier for the other side to adopt or to accept the offer that they didn’t want. This is the same technique that we give people when we say, “Hey, if you’re going to live in a duplex and live in one side to rent out the other side, you don’t have to tell your tenants that you own the property.”
What’s going on, everyone? This is David Greene, you’re host of the BiggerPockets Real Estate Podcast here today with my amazing co-host, Rob Abasolo.

Rob:
How’s it going everybody? Today, Mr. Rob Abasolo, yeah, I’m going to be taking the reins a little. I’m a little nervous. I’m going to be the one turning the mic around to you and asking you the hard questions, David/. Are you sure you’re ready for that?

David:
Hey, here’s the thing. I used to co-host this thing with Brandon Turner and I was allowed to get one word in for every 300 that he said. So, anytime I get a little bit of mic time, I’m good with it.

Rob:
Today we’re going to be talking about skill, which is the sequel to your book, to your bestselling book in my heart, SOLD. Is that right?

David:
Yeah. So, SOLD was a book written for new real estate agents. This is a book written to have agents become top producers where they make a really good amount of money and they dominate their market/

Rob:
Well, awesome. So, before we jump into today’s interview, let’s get to today’s quick tip. I’m going to just brag on David a little bit. I don’t know if you’ve ever read any of his books, but they are very, very, very good. So, if you’re looking to expand your real estate horizon as a real estate investor, as a realtor, then go pick up a copy of SKILL. You can go to biggerpockets.com/skill, and all of the good knowledge and David’s nagging, you’re going to get a piece of that when you open up that book. Again, that’s biggerpockets.com/skill.
Okay. So, let’s dive into it. I want to talk about SKILL a little bit, David. How long ago that you wrote this? Is this all still top of mind for you?

David:
It was, I probably started this book about two years ago because I wrote an entire dictionary for real estate agents. And then, we had to split it up into different sections because it was like the Bible. It was just way too long to be a standalone book. And so, I was writing this book when the shelter in place hit for COVID, that’s where it started. But yeah, it’s fresh in my mind because we review and edit things so many times before a book gets released.
So, in this book, we’re going to focus on today, there’s several chapters obviously in it, but it’s designed to help real estate agents learn how to sell more houses and do better. So, there’s stuff, this is exactly what you do to take a listing. This is how you work with buyers. This is how you understand loans. And there’s one chapter that’s specifically geared towards negotiation. This is what you do to win when you are negotiating both for your clients and with your clients.
And so, we thought that this would be the best chapter to share on the podcast because negotiation is prevalent in all elements of real estate, not just when you’re a real estate salesperson.

Rob:
Yeah. I don’t really feel like the negotiation really ends at any point. I mean, just like looking at the deal that I’m in right now, we’ve gotten the offer accepted, that took a lot of negotiation, which I’m sure we’ll talk about a little bit later on in the show, but there’s also the inspections and negotiating there.
There is the appraisals. And if there’s an appraisal gap or if it doesn’t appraisal, there’s negotiations there if you’re buying like all the furniture that comes with the house. So, negotiation is really something that is from the start of a deal all the way through the end. And it really… I mean, even after that, you’re still negotiating with people after that if you want to flip it and rehab it and BRRRR it, and all that kind of stuff. So, if I remember this correctly, I think there are seven tactics that you lay out in the book around the realm of negotiation. Is that right?

David:
Yeah. There’s seven that we’re going to cover here. And then, we may throw a couple bonus ones in there. You never know. You and I, we have a property in contract that we bought. And part of how we got that in contract was, I told you to tell our real estate agent, “Here’s the strategy to use,” and low and behold, you went out there and it worked. So, this is just from the years of experience that I have negotiating for clients, negotiating for myself.
These are some of the ways that I’ve simplified the concepts that I use, similar to how a contractor has a tool belt. And when he needs a specific tool, he knows, “Oh, there’s a screw. I need a screwdriver.” That’s how this end up working out for me in my business where, “Oh, this is a problem I’m facing. This is the technique that I need to use.”

Rob:
Okay. So, why don’t we just hop into it here? One of the techniques that you’ve outlined is called the baseline adjustment. Can you explain to us what exactly does that mean?

David:
This is really the foundational component that everybody needs to understand when they’re negotiating, and it’s not just negotiating with another person, there’s actually a lot of negotiation that happens with yourself. So, this concept of baseline adjustment is really not unique to me. I’ve just put ways to apply it into our industry. I was walking through Costco with Brandon Turner one time, and we walked in and they have these TVs or like the first thing you see when you go in and he said, “Hey, you know why they do that?”
It’s like, “Probably because they don’t want to move that heavy TV to the back of the place.” And he said, “No, they do that because if the first thing you see is a $900 TV, everything after that seems cheaper. It’s called price anchoring.” And it started this conversation in my own head with so many things work like that. You come up with the baseline of what you believe something is worth or what you believe yourself is worth. And anything above that, you think you’re paying too much. And anything below that, you think you’re getting a good deal.
This is very prevalent in real estate because we use comps. So, if you are buying a house and it appraises at 3.3, but you paid 3.25, in your head, you just beat the other side by $50,000. And the same would be true of the other side. They would feel like they just lost because the baseline was established at the appraised value of 3.3. Many times, this happens with list prices. So, we see a property listed for sale. We say, “Oh, they want $700,000.
I want to offer $690,000.” And if you get it for $690,000, you think you won. If you have to pay $710,000, then you think you lost. So, right off the bat you say, “Oh, I paid $710,000 I lost. This suck. I lost $10,000.” Then it appraises for $750,000. And all of a sudden you go, “Oh my God, I just made $40,000.” It makes no sense. But this is what happens with our emotions because we’re establishing a baseline that we think something is worth.
So, one of the things that a good negotiator does is they help the other person to move the baseline in their mind. So, this applies all the time. Say, I have an agent come to me on my team and say, “Hey David, I want to work on your team, but this is the split I want of the commission.” And in their head, that’s what they’re worth. Well, if I just tell them, “Well, this is all you’re going to get. It’s going to be this amount.” They feel like they’re not appreciated, like they’re being taken advantage of, like they’re being ripped off. It’s very negative.
If I say, “Hey, let me tell you what my profit margin is. Like most of these big teams that sell real estate operate on a 14% profit margin. So, at 50% that you’re going to get to keep, you’re already making more than what the team leader is making. I also have a lot more expenses that you don’t have. I said X amount of money every month that if we don’t sell houses, I could lose it. You don’t have any of that. I spend all this money on marketing.
You don’t have to spend anything on marketing.” And as we talk, they start to see things from my point of view and they start to have their baseline adjust to where 50% could seem like a really good deal compared to the 14% that the team leader might be making. So, that’s the theory, is when you’re going into negotiation, what you’re really trying to do is get the other side to adjust what they believe the thing is worth without forcing them. And one of the techniques that we use is the spectrum. And I’ll stop here to see if you have any questions before I get into that.

Rob:
No, I actually relate to this in some capacity. I mean, it’s like there are people who will list the house and then I’ll make the offer at the asking price. And then, they’ll get back to me and they’ll say, “Well, we’re really only accepting offers that are $50,000 over or whatever.” I’m like, “But that’s not the price you sold in.” And so, now I’m like, on principle, “It’s very hard for me to pay more because you showed me that pretty price. And now you’re telling me that’s not actually the price that you want.”

David:
Now, if they had come to you instead and said, “Hey, I realized that you thought $700,000 is the price that you were going to pay, and we’re saying $750,000. But here’s why. There’s a comp on the street that sold at $825,000. And it’s only a little bit bigger than ours. And the market has adjusted since here to here. And this house is unique because it’s the only one on the street that has this amenity.” That might get you in your mind to start thinking, “Oh, I feel a little bit better about paying more than before.”
And what’s happening is you are adjusting what you think that house is worth. The baseline value is being adjusted by what they say. Bad realtors don’t do that. They just go, “You’re going to have to pay more than that.” And you’re like, “But then, why did you list it for $700,000?” And everyone gets pissed. This happens over and over. And they just act like, “Well, not my problem. If you want the house, you’re going to have to pay for it.” This is realtors’ egos that get in the way.
But a good agent understands sharing information to adjust the other person’s baseline makes it easier for them to do what they want, which is to buy the house that you inquired about in the first place.

Rob:
100%, because I’ll have a realtor that might go to an open house because I buy out of state all the time. And so, if that realtor goes, and they go to the open house and they communicate with that other realtor, the listing agent, and then that listing agent is like, “Hey, by the way, this is probably going to go over asking, there are a lot of things that are selling for this and this and this.” They prep my realtor. Then, my realtor brings that back to me.
And at least I’m like, “Okay, well, at least I know to expect that,” versus just getting closed lined right out the gate.

David:
Yeah, we did this a little bit with the house we bought. So, they had a really high purchase price. They were on the market for a while, and we told our realtor to mention a couple things. And one of them was that houses that have as much land as this house has. They’re not eligible for the majority of conventional loans.
So, right off the bat, their buyer pulls a shrunk because conventional mortgages would not work on a property like this. It was also at a price point that makes it a jumbo mortgage so that the loan terms are much less desirable than what somebody that was getting a conventional loan could do. And we went through the list of, “Hey, here’s why we think your property is taking longer to sell.”
And those were designed not to insult them, but to get them to adjust their own expectation of what their property is worth. And this is really the foundation of what a lot of negotiating is, is reestablishing a baseline that is more, I don’t want to say with the right word, reasonable in the other person’s side. And so, in the book, I list several ways that we do this on the David Greene team.
But one of the biggest ones is we use what’s called the spectrum. And the spectrum is just a way that I stop the other side from having their cake and eating it too. So, many times you’ll get a buyer client, they’ll come to you and they’ll say, “Hey, I want to invest in the bay area because I know the appreciation is crazy. It’s awesome. I’m going to make a ton of money.
And I also want a 25% cash on cash return in year one.” They have put themselves into a box where they cannot be successful because they’re looking for something that doesn’t exist. There are no houses out here that are eligible on the MLS at a 25% cash and cash return in an area that’s going to see appreciation. And if there was, somebody bought it yesterday.
It doesn’t exist anymore. So, what we have to do is instead of telling them, “You’re not going to get that,” that creates a conflict between us and them, is we relay this information through the theory of a spectrum. So, I will take a piece of paper. And on one end, I will draw appreciation. And on the other end, I will draw cash flow. And I will draw a line connecting them. And I will say, “Here’s how this whole thing works, supply and demand.
There’s every property has a purpose. Well, some property’s purpose is cash flow, and some property’s purpose is appreciation. Nothing is 100% one and zero the other. We could find you a property that’s right in the middle, healthy appreciation and healthy cash flow. Some of them will go further towards cash flow and you tend to give up appreciation, and some will go the other direction. What matters more to you?” “I think appreciation matters more.”
“Okay. The question we have is, how far can we go towards appreciation before you say, ‘That’s too far, I need more cash flow. It’s not safe.’” We find where that is in the spectrum, and those are the properties that we target. And I relay information like this all the time. Someone comes to me and says, “Hey, I want a house hack, but I don’t want to rent out the rooms, and I don’t want a big rehab budget, and I want to be in the best area possible.” And they have all these ideas and I have to say, “Okay, well, those properties don’t exist.
Somebody else would’ve already bought that.” So, on one end of house hacking, you have maximum profitability. On the other hand, you have maximum comfort. “We have to figure out how far can we get you towards profitability, that it’s still comfortable enough for you and your wife to live in. You don’t want to be sharing a bathtub with a stranger.” And that is the way that we present the argument to them so that they don’t think that they can have everything… have their cake and eat it too would be a better way to put it.
They get in their own way of thinking, “If I just look at enough properties, I’m going to find that one unicorn that isn’t out there.”

Rob:
So effectively, if I’m hearing this right, when you’re establishing that spectrum, you’re basically trying to show them, I guess, another outcome that could be equally good, just different than what their expectations are. So, if they are really hung up on cash flow, but you say, “Well, hey, on the flip side of this, just so you know, appreciation is also a great thing. If you were to land this specific deal, it’s not really a loss. It’s just, it might be different than what your original goal was.”

David:
Because life is all about trade-offs. Like just when you’re looking at investing in general, it’s a spectrum. On one end, you have maximum returns. On the other end, you have safety. Higher returns tend to come with more risk. The problem is, everybody walks into it that’s an experienced and says, “How do I get a ton of returns with no risk?” And that’s literally how you get taken advantage of because someone makes a fake Instagram account that looks like me or you and message them and says, “Hey, invest in my Forex Fund.
There’s no risk in a higher return,” and people fall for it. But that isn’t the way it works. So, I have investwithdavidgreene.com, a website where people can register to invest with me. And I tell them very clearly, “Hey, if you’re looking for a very safe, it’s not secured and it’s not… the return is not dependent on how well the property performs. You’re going to get the interest rate that I told you about, irregardless of how things work out, you’re going to get a smaller return, but there’s a lot of safety.
If you want something riskier, you can get this kind of a return, but there’s risk involved. It’s this indication if the property doesn’t do well, you could lose your money.” The way of presenting that information on the spectrum helps people to understand what decision would be best for them.

Rob:
So, this seems like a really great time to get into technique number two here, we’re calling this, making sure you’re heard having your opponent punch themselves out. Can you explain that a little bit?

David:
This is a communication tactic. So, anybody who’s married probably understands this at a high level, even if you’re not a real estate sales person or a real estate negotiator. Yeah. I use the analogy of like a boxer, okay? Most people that are inexperienced at martial arts or combat, they think they’re going to walk into a fight and they’re just going to punch as hard as they can until they hit the other person, they’re going to overpower them and knock them out.
But what a good boxer does is they sit there and they let you just throw a punch after punch after punch, while they’re defending themselves and not being hurt. And then, you get really tired. And then, that’s when they hit you, and they knock you out. So, there is an art to knowing when you can throw a knockout blow and when you’re just trying to soften out the opponent.
So, another way this analogy can be understood is your idea that you’re trying to get somebody to see or understand a seed. You don’t want to plant that seed on rocky soil. You want to plant it on soft soil. So, this is a technique to soften up the other side. And I know that this works in everything in life, not just real estate, because I’ve seen it in my personal life as well.
So, Rob, you’re a married man. You probably understand this very well. If you have something that you want your wife to do, or you guys are in conflict over, you want something, she wants something different. If you go in there and you just say, “Here are all the reasons that you’re wrong and you’re not worth as much as what you think you’re worth. And this is the only reason I’m going to give you just this little amount, not what you’re asking for.” And you’re just going to overpower them. Does that ever work?

Rob:
No, no, no. No. No.

David:
Right. Well, a better technique would be is to say, “Hey, honey, can we talk? I want to get this thing smoothed out, whatever our issue is.” And that’s a negotiation. “Can you tell me other ways that I’ve been letting you down or not coming through for you?” And then, she starts sharing some of the ways that you’ve disappointed her. You’ve heard her.
And you say, “Man, that must have been really hard. Thank you for putting up with that. Can you tell me a little bit more about what you wish I was doing that I’m just not doing enough of, or what I don’t understand that you’re going through?” And then, she’s going to give you a lot more information. And you keep doing that path. What you’re doing is you’re getting the other side to punch themselves out. All of the fear or the anger or the bitterness or whatever we’re holding onto gets released in that conversation.
So, imagine that you’re trying to buy a house from somebody off market and it’s direct to seller, and that seller is selling their grandmother’s house. And they had a great relationship with grandma. And you think the house is worth $300,000, but to them, it’s worth $500,000 because this was grandma’s house. Okay? Telling that person, “Your grandma’s house is not worth what you think. In fact, you’re lucky that I’m even giving you $250,000. You shouldn’t be expecting that.
Let me show you all the things that’s wrong with the house.” It’s like going to your spouse and saying, “Let me tell you everything that’s wrong with you to start a conversation.” It doesn’t work, right? Instead, what you want to say is, “Tell me what you love about the house. Tell me the memories that you had here. Tell me why you think it’s worth $500,000.”
You get them talking until they can hear themselves and realize, “Oh, it’s not worth $500,000 just because that’s what it’s worth to me.” And once they’re punched out, once they’ve gotten everything they have to get off of their chest, that’s when you would introduce your idea.

Rob:
Okay. So, I think I might have a tactical example of this. Let me know if I’m misunderstanding this concept. But on this house that you and I are in contract on, we actually came in and we gave a considerably lower offer, like what we felt was what it was worth. They said, “No.” Well, basically, they told us to kick rocks and we’re like, “Okay, cool.” So, now we wanted our realtor to come in and play buddy-buddy with the other realtor and say like, “Hey, I really want this.”
And had him check in with the other realtor. We had him checking in, “Hey, how’s it going? How’s it going? My guys are still interested in this. I’m helping them make this decision. Here’s why we were offering this. Hey, if we can put a deal together, maybe I could get them to come up a little bit.” And so, basically every single day was like those little jabs, right?
Every single day, checking in, checking in, checking in to the point where I feel like at the very end, when we did get our final offer accepted, it’s because we had worn them down over the course of one to two weeks.

David:
Okay, that’s a great point. That technique was a combination of what we’re talking about now, getting them to punch themselves out, mixed with triangle theory, which we’re going to get into later. But what we basically had our agent do was align himself with the sellers against us so that they had a common enemy, which is what we’re going to get into this triangle theory, and then get the listing agent to keep telling him why she thought the house was worth what she said.
And eventually, she ran out of explanations because the house wasn’t selling. And that’s when they were like, “Okay, well, let’s hear what these guys have to say.” We gave our explanation for why we wanted the purchase price. We got it accepted.

Rob:
So, let’s move on to the third one here. Keep things moving. Another technique that you call, the tension formula.

David:
Yes. The tension formula is something every agent needs to understand. It’s particularly important when you’re in a situation where feelings could get hurt. So, this would apply… it could apply when you’re writing an offer to buy a house, but it wouldn’t come up as often. Because when you… if there’s multiple buyers in the market we’re in today, you got to do whatever you got to do to get that thing. You don’t really have a whole lot of leverage. But once you’re in contract and now you’re negotiating a request for repairs or a credit based on the inspection report, there’s a lot more subjectivity to a situation like that.
And that’s where the tension formula is best used. What you’re basically trying to do, and I have a diagram in the book that explains this, is you’re trying to create a pressure capsule and keep the other side in there until they are so uncomfortable from the pressure that you’ve created, that they give you what you want to get out of that, I say like the lid blows off the thing and you get what you want. The problem is, on one side of this pressure capsule, you have to be likable. If you just go in there like a jerk and you’re like, “Listen, I got news for you. We’ll pull out at any second. We don’t need your house.
There’s a ton of houses out there.” All that does is tell the seller, “Well, then fine, go find someone else. I don’t need you.” And if you come in not being likable enough and you don’t hold tension on the other side, they think you’re a pushover. They don’t have to listen to you. So, you’re trying to create these two walls where on one side, you’re very firm, but you’re balancing that out by being very likable at the same time. And I have examples in the book of what it looks like, but you’re basically trying to not air it on either side.
Sometimes you’ll get agents that will come in and say, “Hey, we’d really like a price reduction of $30,000. It would mean a lot to my clients. Just do the best you can. We don’t want to blow up the deal, but we just really hope you can help us.” Right? When I hear that, when I’m the listing agent, I just think, “That’s a hard no, you were going to pay what you’re going to pay.
You’re coming in so soft. There’s no firmness at all. I don’t have any worry that you’re going to back out of the deal.” On the other side, they could not be likable enough and just be totally firm. “Hey, buddy, here’s the deal, either you dropped the price or we’re moving on. You have 24 hours to let us know.” If I know I’ve got four other people that want to buy this house and you approached me like that, I’m going to tell you to kick rocks and I’m going to go find somebody else.
So, what our agent did in that example or what we coached them to do was to continually go to them and say, “This is the price and this is why. And they can’t pay more than that and they shouldn’t pay more than that.” But he was so dang likable that he won them over to seeing it from his side. And that’s the tension formula is, you are trying to have equal parts of both of this.
And if you can do that, it puts the other side in a very uncomfortable situation where your request that you ask for is creating pressure, you’re firm so that pressure cannot escape, but you’re so likable that they can’t just write you off and say, “I don’t want to deal with this person at all.” And eventually, if they sit there long enough, they will usually give in, the top will blow off and you’ll get what you want.

Rob:
So, what you’re saying is, you shouldn’t go to another realtor and say, “Hey, bucko, sell me this house.”

David:
Yeah, or insult the house. Right? A lot of people will do that. They’ll go, “Oh, look at this thing, man. It’s probably got lead paint. I bet you there’s this pest everywhere. Who knows how many people have died in this thing? It’s barely worth whatever.” You’re not likable enough. It makes it too easy for someone to kick you off. Right? The other thing you don’t want to do is say, “Hey, I really need a house so bad. I’ll do anything it takes to buy it.
Please don’t rip me off when you give me the price you want for the house.” Well, that’s what they’re going to do. So, it’s finding that balance and then knowing you’re creating pressure that your opponent is sitting in and they’re going to tap out themselves when it gets to be too high.

Rob:
Yeah. I could definitely see this popping up quite a bit during inspections and listing out all the different things that you want them to repair or credits. There’s a little bit of teamwork that’s needed from both sides. If you just went and said-

David:
Because the leverage becomes even at that point.

Rob:
Yeah.

David:
They don’t want to lose. They don’t want you to back out just like you don’t want to have to back out. In the beginning when you’re trying to put in contract in today’s market, you don’t have a whole lot of leverage. This very rarely applies. But like I was saying, when you’re in escrow, you’ve got a little more leverage. They’ve started to move on, they’re packing up their stuff. Maybe they put another house in contract that they don’t want to lose. That’s where a technique like this would really shine.

Rob:
Yeah, definitely. I mean, I think there’s a lot of instances where, yeah, it’s like, you don’t want to throw the deal over it. So, there is firm. You have to be firm about it and have your list of things that you resolute about. And then, yeah, there’s a little bit of cooperation, I imagine. So, okay. Yeah. So, let’s keep moving here. Next one you’ve defined as a trademark really. If not, I’m going to get you in touch with my trademark attorney, the persuasion formula.

David:
Yeah. So, this is a really fast one. We can go through this pretty quick. Here’s an actual paragraph from the book. Well, basically here’s the… it’s a five-step process, I should say that. It’s like literally a formula for how you can communicate information. Step one is acknowledge the difficulty or negativity in the situation that the other side is facing. Step two is empathize with them. Step three is align yourself with them. Step four is propose your solution.
And then, step five is to use logic to support why you believe it’s a win for all parties. So, here’s what that would look like in practical terms. “I’m sure this comes as a shock to your sellers.” That’s acknowledging the difficulty or negativity in the situation. “And I know it’s going to be a tough pill to swallow with the plans they’ve no doubt made for their future.” That’s empathizing with them. “But I really want you and I to work together to arrive at a solution that works for everyone, that would be aligning myself with the other agent.
How about if you credit us $3,000 towards the worn-out AC unit and we’ll drop the home warranty that you’re currently paying for?” That would be the solution. “I can convince my clients they won’t need the warranty if we already have the credit for the air conditioner.” That’s the logic to support what I’m saying. When you set things up in this order, you disarm the other side and then you align yourself with them. So, they want to come up with a solution.
You propose a solution, putting you in control. Because if you let them propose a solution, they’re probably going to say, “We’re going to give you a home warranty. We’re not going to pay for an air conditioner.” And that’s going to be much worse for my side. And then, the end, I give facts to support what I said.

Rob:
Okay. So, I don’t want to oversimplify this, but to me, this sounds like a good old compliment sandwich.

David:
Yes.

Rob:
So, this would be like you saying, “Hey, Rob, love you. You’re a great guy. When you were doing that BiggerPockets intro, we had to edit it quite a bit, but here’s a fact, you’re a very likable guy. And you did great for your first run. Here’s how you could improve it.” I don’t know.

David:
It’s funny.

Rob:
Did that follow the logic at all?

David:
Yeah, it’s a similar structure to where a compliment sandwich is designed to make the criticism not shock the other party into being your enemy. This is very similar where this is something that as an agent, I’m using to get the other agent to agree with what I’m looking for. And the same thing can apply when you’re negotiating for anything. So, this could work if you have to go talk to your boss about a raise. “Hey, I understand that the company is not having the best year ever. And there may not be a ton of money to go around. I also know that by me asking you to do this, I’m sending you to your boss, which may not feel good.
But look, I want to do a great job for you so that you look great at the next quarterly meeting. And I think that I can make you look like the top manager in the company. If you can give me a raise of this amount, I will take on these responsibilities and make sure you look good. And I believe I can do that because my sales record the last three years has been the top in the area. I’m getting even better. And I now have a new book business that I didn’t have before.”
That is the same five step system that you could easily use to get your boss to hear what you have to say and really consider it. Versus, if you walk in there and say, “I’m getting a raise or I’m quitting.” You’re playing Russian roulette with your career.

Rob:
Yeah, definitely. I think this is… I mean, this to me right here is like such a fundamental pillar of negotiation, especially when you’re working with your realtor. And funny enough, I mean, I don’t necessarily always see this actual thought process. I mean, from a conceptual level, it makes sense. Give a little, take a little. But here it feels like there’s actual strategy behind every single component of the persuasion formula.

David:
Well, I think people that are naturally persuasive, like to be frank, you, Rob, are a pretty persuasive guy, right? It’s easy to give into you and give you what you want because you naturally use the tension formula and you naturally use the persuasion formula, but I create this for the people who don’t have this natural skill, right? You can take it and you can make it into this five-step system for whatever it is you’re going to ask for and deliver the information.
And it works in an email, it works in a text message. It works in a phone call. It works when you’re live in person. If you can get used to communicating in this rhythm, it makes you more likable, which really helps with your tension formula game.

Rob:
Yeah, this is great. This is great advice. I’m going to take this to my wife, and I’m going to say, “Hey, you know what? This is not an ideal scenario, but here’s my solution. It’s going to be great.” This is like marriage advice too.

David:
Actually, you know what I want to see, Rob? I’d like to see you put the persuasion formula into action right now in front of everybody over the situation where one of your children put Play-Doh up their nose and your wife was the only one that was there to fix it while we were recording.

Rob:
Okay. So, my wife texted me and she said, “Do you have a minute?” And I said, “Not at this time.” And then, she said, “It’s important. Get down here right now.” And I said, “Yes, ma’am.” And I went down, and her and I looked at each other and she said, “Hey, Ilah put a piece of Play-Doh in her nose.” And so, we both acknowledged this was not going to be fun. And the only solution in that particular moment… well, there was two solutions.
One of them was very elevated. One of them was a lot smaller solution. Solution one was go to the ENT. But before we did that, she called her doctor friend, her sister. But she got the advice to give her reverse CPR where you basically have to hold down one nostril, blow air through the mouth so that the other nostril clears the Play-Doh and snot the blockage. So, basically, I was like, “Listen, option one, we go to the ENT, but that is like a whole ordeal. I acknowledge that these sucks, but we got to do this right now. Let’s try this solution.”
She said, “Let’s try it.” And it was not a fun solution in the moment because my daughter had no idea what she was about to go through. And we were holding her down. And we did it and we got the Play-Doh out.

David:
Okay. But that was a better solution than having to go to the emergency room, right? So, how could you use-

Rob:
That’s 100%.

David:
So, let’s say that that’s your goal, is to get your wife to try this awkward, reverse CPR method. How could you use a persuasion formula to convey your information?

Rob:
Well, so for me, I was like, “Listen, I understand that this is not fun and-

David:
No, I’m saying, convert it into the five steps. Do you think you could do that?

Rob:
Okay. So, one was acknowledging the situation. So, for me, I was like, “This is not going to be fun regardless of the outcome.” Two, empathize with the other side. Empathizing that this is her baby. It’s also my baby. And that, “Hey, as parents every so often, this is going to be hard on us, but it will be worth it.”
Three, align yourself with the opponent. And this one, of course, the opponent being my wife. And I said, “Look, if you and I can do this, and we can do it fast and concisely, we can avoid a trip to the ENT at the end of the day, where they’re probably all closed.” Four propose a solution. “I will hold down Ilah.
I will hold her down, and hold her head down while you hold one nostril and blow through her mouth.” And then, five, use logic to support why you believe it’s a win for all parties. “Because if we do this, it will probably work. And it’s probably a lot better than what the ENT is actually going to do.” Because I don’t know what devices or what things that they’re going to do, but I would rather us be the one blowing air through my child’s mouth than a random doctor.
Actually, I don’t know if that’s true, but in this particular scenario, in this reality. And I think after I was like, “Let’s give it a shot.” And she’s like, “All right.” I mean, worse comes to worst. Well, I was like, “Oh, and the solution here, if it doesn’t work, we’ll go.” And she said, “Okay, great.” And we did it, mucus and blue Play-Doh came out and we’re all the better for it.

David:
That’s good, right? I think that’s for the first attempt, that’s pretty solid. Here’s the way that I would’ve communicated if I was in your shoes. “I know this must be really scary that our daughter snorted Play-Doh up her nose and you’re worried about the long-term effects or if this could be really damaging. You probably feel terrible because you were the one watching them and you were alone at the time because I was off working, and you think this is your fault.
But look, this is not your fault. If I was in your shoes, the same thing would’ve happened to me, you and I are parenting them together. And you were carrying the slack because I wasn’t there when this happened. What I’d like to do is this reverse CPR method so that we don’t have to take her to the ER at the end of the day. And it will save us a lot of time. It will also give us a really funny story to talk about someday, how we blew Play-Doh out of her nose.
It’ll build trust between her and us because she’ll see that mom and dad can fix anything, and it will help you and I to recognize that together we can solve problems without needing to get a doctor involved.” So, I just literally went down those five steps as I was saying it. And I have a little bit more practice with this than you because I’ve been negotiating with people for a really long time, but that is the idea behind the persuasion formula. It took me a long time.
I still screw this up in my personal relationships more than what you think, right? I naturally do this when I’m negotiating for a client, but what I always attempted to do is just to skip right to number four, propose a solution. “Here’s what we’re going to do. Here’s why we’re going to do it. Get out of my way and let me go.” But when I presented it this way, I always get better results.

Rob:
Well, I never thought that this would be so applicable to something that happened minutes before we started recording this podcast. Everybody home, all the people, they are like, “Get her to the…” “She’s fine. We did it. It’s okay. It’s all good. Don’t worry. My daughter’s fine.” I know there’s a lot of people that are like, “Oh, boy.”

David:
I’m sure you’re not the first person that had a kid put Play-Doh up their nose. I mean, kids find ways to put everything up their nose.

Rob:
Oh, it actually turned out that it was mostly just… she had a stuffy nose. The stuffy nose actually did its job and stopped the Play-Doh getting up there more.

David:
Natural defense system.

Rob:
Oh, the body is a beautiful thing. So, I think I’m excited to get to triangle theory because you touched on this with our negotiation tactic, working with the realtor. So, can you explain a little bit more about what this is?

David:
Yeah. Triangle theory is something that’s one of the most commonly used negotiation tactics that we use on our team and probably anybody uses everywhere, and good negotiators are good at doing this. It is the idea of having an issue where you would normally be in conflict with another person. So, say, you and your client, let’s say you’re trying to take a listing. And the person thinks their house is worth $1 million, but it’s really worth $850,000.
So, you’re telling them it’s worth $850,000. They believe it’s worth $1 million. The two of you are now clashing. And even if you win in that negotiation, the relationship gets damaged and it makes it very difficult from that point forward to have a positive experience for them. So, the key is you create a third party, like the third point of a triangle. You align yourself with your client and you make that your common enemy. So, in that case, rather than me saying, “Look, I know more about real estate than you do. It’s worth $850,000, okay?”
Now, I’m in conflict with them. If I say, “Hey, I think your house is worth $1 million also. And I’d love to sell it for $1 million. Someday, I think we would be able to do that, but let’s take a look at what the market is telling us. Do you see these other houses that are on the market? They all sold for somewhere between $800,000 and $875,000. That means the appraisals are going to be coming in around this number. Do you also see how many houses are sitting on the market right now that are not selling that are priced above $900,00?
These all compare really closely to yours. And even though your house is much more beautiful than those, the appraiser is not going to look at it that way. They’re going to say this house is worth right around $850,000. So, though I would love to do what you’re asking, what comp can you pull out of this list that would show me that your house would be worth $1 million?”
What I actually did there was I created a common enemy in the market and then I also did it with the appraiser. So, now I’ve said, “We have all of these people that are stopping us from hitting our goal, but I’m on your side and here’s what I’m going to do. If we get a low appraisal, I’m going to take them these numbers and I’m going to show them why I think they should be higher.
And even though the market is showing us, ‘This is what your house should sell for,’ I’m going to market it better than other people do. And I’m going to try to get you $875,000 instead of $850,000.” And you go through this list of showing them how all of these different opponents that we just created, “I’m actually standing on your side against those people.” And that could apply with the hypothetical situation of the person who’s selling grandma’s house.
If you just tell them that house is not worth enough, you’re in conflict. If you show them that, “The person who’s buying this house didn’t have their grandma living here, so they’re not going to value it as much as you did. Even though to you, I do believe it’s worth $500,000, I’m only able to give you $250,000 and here’s why.” And I find myself doing this all the time. I will have our clients that say, “Hey, this is how much we want to pay for the house.”
And I go talk to the agent and there’s 20 offers. So, my client wants to pay $800,000. They already have offers over $1 million, right? I’ll usually go to my client and say, “Hey, I really wanted to get this thing for you at $800,000. Unfortunately, they have 20 offers and the sellers don’t care who’s writing that check. They just care about how big the number on that check is. And it’s probably going to need to be $1,000,025 if you actually want a chance.
Do you want this house? Or you want to walk on it?” “No, we want it, but we just don’t want to get taken advantage of.” And then, I’ll go to the listing agent and I’ll say, “Hey, I know that your client wants $1,000,025. And I think it’s worth that. But my clients are just not preapproved to go that high. I can get them to $1,000,015, right? Do you think we can make it work at $1,000,015?
What if we do this or this to make it a little bit sweeter for you?” So, what I’ve done in a sense is I’ve gone to listing agent and I’ve agreed with them that their house is worth the price they want, but they can’t get it. So, I’ve created my client in their eyes as the opponent. I’ve gone to my clients and I’ve said, “Hey, this is what we’re going to do for you. The opposition is all the other buyers that are out there looking for the house. We’re competing against them.
We’re not competing against the seller.” And you’re not actually taking their side. It’s the way you’re relaying the information that makes them feel comfortable with you, to where they understand your hands are tied in a sense. I tell people all the time, “In today’s market, you’re rarely ever negotiating against the seller. You’re negotiating against the 14 other buyers that are all trying to buy that property.” So, you have to understand there’s many components into making it work. And triangle theory is a way that you can rid that information without getting the person who you want on your side to be in conflict with you.

Rob:
Well, yeah, I think a big pillar of this that you touched on is that you’re allowing the other person, instead of making them the opponent, you’re letting them scheme with you a little bit.

David:
Yes.

Rob:
“Hey, if we do this, what do you think? I’m going to give you input. I’m going to let you collaborate on a plan that I’ve already decided. But hey, if it’s a good idea, I’ll take it.” Right? So, they feel involved. They feel like, “Hey, if I can actually land this, then man, I’ll be really proud of myself because that would’ve been a really hard obstacle to overcome.”
And I think that was very evident in the deal that we did because that’s probably a tough one for the opposing realtor to really get through to the client and then actually getting an offer accepted. There’s a little bit of pride of actually pulling something like that off too.

David:
We had to get her to be our advocate in that scenario. And no listing agent wants to have to go to her clients and say, “I got beat.” So, instead what we do is we coach them to go say, “Hey, we took a really good shot. We listed it for as high as we possibly could. We didn’t get any buyers. But good news, I got a person that’s still willing to pay more than I think anybody else will.”
Now, she’s aligned herself with them against us. It makes it easier for the other side to adopt or to accept the offer that they didn’t want. This is the same technique that we give people when we say, “Hey, if you’re going to live in a duplex and live in one side and rent out the other side, you don’t have to tell your tenants that you own the property. You can get a property manager that manages it, and they don’t need to know that you’re the person who owns it.
Because if they know you own it, they’re going to feel much more comfortable not paying the rent on time, pushing the boundaries. And you’re like, ‘That’s my neighbor. I don’t want to upset him.’” Well, triangle theory is a way of introducing the property manager, making that person the bad guy.
And now, boom, you don’t have to worry about this. So, you can know that you’re being triangle theory when you ask somebody for something and they go, “I don’t know. Let me go check with my partner on that.” Oftentimes, the partner is a hypothetical person or doesn’t have as much power as what they want you to believe they’re buying themselves time. So, like at car dealerships, this is notorious. That’s what they’ll do. “Hey, the car is listed for $20,000. You say you want it for $14,000?” What do they always say?

Rob:
Let me go talk to my manager and ask.

David:
That’s it. The manager is-

Rob:
I’m glad I passed.

David:
… is the bad person in triangle theory. That’s exactly right. They’re using triangle theory because they don’t want to be in conflict with you, and they’ll come back and say, “The manager says, I can only give it to you for $17,000.” Right? They might not even be talking to the manager. They might be just walking in the back, filling up a cup of coffee, talking to their buddies. And they come in right-

Rob:
Put on their hat and a jacket. Trench coat.

David:
A tie. Now, I’m the manager. Yeah.

Rob:
Okay. Well, I think that makes up a lot of sense. Let’s keep this moving here. I think technique six, we call this pricing.

David:
Yes. So, here’s a line from the book. Pricing is a way of shifting the value in a negotiation away from the other side and onto yours. When used effectively, it removes leverage. The other side was holding against you and leaves them wanting what you have instead. If you don’t learn to prize what you bring to the table in a negotiation, you will find yourself constantly on the defense.
It’s hard to move forward when you’re always defending yourself. A simple example of pricing and action is when a client asks you to reduce your commission because they have something of value. “David, I think you’re a great agent and we want to have you represent us because we have a house to sell and a house to buy. We’d like you to give us 25% of your commission because you’ll be getting both sides.” In this case, the seller has created a frame where the commission is the prize and they have it.
In order to get that prize, you have to give something up. Rather than argue why you are worth the commission, a strategy that leaves you on the defense and allows them to continue to poke holes in your value, it’s better to shift the prize away from the commission and onto something you possess. So, in this case, now that’s the part that was in the book. In this case, what you’d want to say is, “Well, I have a list of buyers that other people don’t have. Well, I have a skill with selling homes where I can make you more money than other people do.
I have a marketing plan that’s different than other agents. What you want to do is come up with something that you have that’s of value that the other side wants.” What most people do is they end up trying to defend themselves or defend why they shouldn’t have to give up part of their commission. And the minute that somebody else makes the claim, “Hey, I want this commission and you’re now trying to backpedal to keep what you have,” you’re on the defense.
You’re going to lose. What you actually want to do is switch it around and you want to say, “Well, I could let somebody else sell your house. You probably lose about $50,000 because they don’t do this thing that I do, or they don’t sell as many houses, or they don’t have this strategy that I have.”
So, pricing is another negotiation technique when you feel someone’s trying to take value away from you. So, if you’re looking to go buy the car and the salesperson says, “Hey, it’s $17,000. That’s what the car’s going to cost. If you don’t want it, somebody else will buy it.” Right? If you don’t have leverage, because people are buying these cars all the time, there’s not much you can do.
But let’s say you look out the window and you’re like, “There’s 14 more Toyota Camrys sitting out there and they’ve been there all month. I don’t think anyone’s buying this car.” Right? You would want to say something back like, “Well, I could buy this car right now. You could have another one in here next week. I don’t know how many of these other people are ready to buy a car today, but I am.
It just has to be at this price. And if we can’t make it work at that price, I’ll be forced to go find somewhere else that does want my money. I was hoping I could get this done with you guys today to save myself some time.” You’ve shifted the prize away from the car that they have onto the fact that you can close it right now when other people can’t. And it’s not a guarantee in any scenario, but it is a way of calling the bluff of the other side when you think that they’re trying to take advantage of you.

Rob:
No, I think that actually makes sense. I did that not too long ago. It’s a lot more convoluted than we’ll get into on this podcast, but it was the same type of deal where I wanted a specific thing about a vehicle I was buying. I had to talk to the sales guy. He came with his one of those fake disguises, the big nose and the fake glasses-

David:
The Groucho Marx things.

Rob:
Yeah, he came with one of those. I was like, “You look familiar. Weren’t you just the sales guy was talking to me,” but I did end up saying like, “Hey, I want this and this.” He said, “No.” And I was like, “Well, here’s the deal. I will buy this car right now. And if not, I’ll just order an Uber.” I was like, “I drove here without a car. I came in an Uber. I’ll order an Uber and leave right now. Or alternatively, what I’d prefer is to Uber…” I’m sorry, not to Uber and buy the car.
And we did end up closing a deal that looked a lot different than the original deal. But yeah, I think that the pricing, that little tactic right there was an example of pricing. Like, “I will do this right now.” And not only show them that I’m not bluffing, but, “Hey, go look outside. My car is not there. I would like to drive away in your car. Can we work something out?”

David:
Yeah. A lot of the times, when you’re the realtor representing your client, you’re trying to create your client or something your client has is the prize. This is why all cash offers tend to win. They don’t come with contingencies. So, the listing agent may say, “Well, we have other offers that are higher.”
What you’d want your agent to come back and say, “If you’re the cash person is, yeah, but can they close in 12 days? Can they go with no loan contingency, no appraisal contingency? Are they guaranteed like we are?” In that case, the prize is the certainty that the all cash buyer represents not the highest price.
And the same would be true if you were the person representing a client who doesn’t have all cash. You want your agent to go in there and say, “Hey, they may be able to close in 12 days, but what does 18 days matter to your client?” Right? “And yeah, we’re not paying all cash. We’re paying with some of our cash and some of the bank’s cash, but cash is cash.” Right? “It doesn’t matter that we have a loan contingency. You can talk to Leonard. We already have loan approval.” Right? You’re trying to now present what your client has as the prize.
And this particularly comes into play when you sense the other side trying to take away your value.

Rob:
Well, awesome, man. Well, I think we got one more here to round this now. And you call this the tier system, T-I-E-R not T-E-A-Right. Although I am tearing up with joy from getting a master class from David Greene himself.

David:
Very nice. All right. I’m going to read a little paragraph out of the book for this with you. The tier system is a structure I designed to help address FOMO, fear of missing out. In clients who have trouble committing out of the worry, there is something better out there. So, if you’re listening to this and you’ve ever tried to buy a house, you understand what the FOMO is when you’re like, “I like the house, but what if I get something better?”
This occurs most commonly with buyer clients who find a house that works for them but feel they might find a better one if they keep looking. Should they find a better one? The same problem reoccurs and the cycle continues. That’s how FOMO works. In order to overcome this, you need to help create a framework where the client understands there are no better options out there for them than the one that they’ve just found.
In Pitch Anything, Author Oren Klaff describes how the midbrain receives information and evaluates it within a social construct. This part of the brain wants to take the information it receives and finds some way to compare it to other information in order to decide if the stimulus is good or bad by evaluating if it is better or worse than other stimulus.
The tier system helps me satisfied the midbrain’s concerns while also eliminating options from the client to choose from. Every buyer starts off wanting the perfect house at the lowest price in the best area. It’s only after seeing these houses don’t exist that buyers will adjust their expectations to realistic levels. Amateur agents accomplish this by showing houses to the client over and over and over until the client finally realizes it.
Top producers accomplish this before they ever leave the office. So, in Pitch Anything, one of my favorite books, Oren Klaff talks about how information tends to be received through three different parts of the brain. The first is the midbrain… or sorry, the first is the croc brain, then the midbrain, then the neocortex. The croc brain’s job is to take stimulus and ask one question, “How could this kill me?” So, you hear a loud noise. The first thing we all do is jump.
None of us go, “Oh, my God, did you hear that loud sound? Santa must be coming down the chimney. Give me presence. I’m so happy.” Your first instinct is always, “That’s going to kill me.” Once you realize you’re not going to die, you hear a loud sound and nothing terrible happens, the midbrain kicks in to try to make sense of that stimulus in relation to a social setting or other forms of stimulus that could be happening at the same time.
So, if I’m at my house in the middle of the night and I live alone, and I hear breaking glass in the kitchen, my croc brain wakes me up. I jump and I probably get more scared. There’s no reason glass should be breaking in the kitchen when I live alone at 3:00 in the morning. But that same exact sound, if I’m in a busy restaurant, I jump when I hear the sound. You see everyone do that in restaurants. And then, they go, “Oh, the waiter probably dropped a couple glasses. And that’s what that was. That’s normal.”
That’s what your midbrain does, is it looks at the social setting and says, “Based on what I’m seeing around me, is this good or is this bad?” And the last part of your brain is called the neocortex. And that’s the part that looks at logic and reason, and all the things that we think make everybody make decisions. And that’s one of the problems with bad communicators is they deliver information to your neocortex before your croc brain has decided that it’s safe.
So, you sit down with an agent and they say, “Let me tell you about all the houses that I’ve sold. And let me tell you about how much I know about real estate.” But you still haven’t figured out if you trust this person or not. You think they’re a used car salesman, right? You don’t want to hear about all the great deals they have on cars if you don’t trust them.
They haven’t satisfied your croc brain. For a realtor, one of the things they can do is they can show their clients all the houses that are on the market in their price range before they go take them to see something. And then, they create a tier system, like, “Hey, here is the house that would work perfect for you. Here’s a house that has some of the things that you would like but not all of them.
And here’s a house that has one thing that you like, but it’s lacking in the rest of them. We’re going to try to get that top property. But if we aren’t able to get it because 25 other people want it, would you be okay with this property that satisfies most of what you want?” And then, if they can’t get that one, the question becomes, “Is it better off to buy this house that keeps you from renting and has the ability to be a rental property in the future, but it’s not in the best location. It’s not in the best kitchen. It doesn’t have most of what you were hoping for. The question is, is it better than having nothing?”
And if you can present them that information in a way that allows them to keep their hopes alive, that next year they could get that middle-tier house, and the year after that, they could get that top-tier house. They don’t feel like they’re losing their dream and settling for something that they don’t like. If you just tell them, “Hey, you can’t afford that house. This is all you got, take it or leave it.”
They’re going to probably hold on to that hope that they can get something better because their midbrain doesn’t believe that there’s nothing else out there that is better than this house. You typically have to show them what’s available for them and what they could realistically get to get their midbrain to be quiet and say, “Okay, I understand, I’ll accept the next property.” And the tier system is what I use, where I create a tier structure. “Here’s what we really want.
Here’s what we hope we could get. And here’s what we would be willing to get if we couldn’t get anything else.” And then, create a path where they see they can get the properties that they really want in future.

Rob:
Man, that is really, really good. This is genuinely like my real estate journey, it feels like. Especially when you’re trying to buy a house, right, to live in. I think every first-time home buyer probably goes through this where we all want what we can afford. And we don’t realize it until we start looking for houses.
And then, we finally find one and we get outbid. And then, we get bummed because we’re like, “Dang.” And then, what you start doing is, you start lowering your expectations but more in a negative way. And you start settling. And you’re like, all of a sudden, this house that was on a busy road, now it’s all of a sudden cute because it’s your only option.
And then, by the time you finally get to that house where it’s accepted, you own it. And you’re like, “Okay, yeah, this is not exactly what we wanted.” Whereas, if we had laid out this tier system that you’re talking about, like what’s ideal, what’s probably going to happen and what’s realistic.
If you have that approach to it and you do have somewhat of a plan in place for how to get to what you want eventually, then I think you can really look at evaluating deals a lot more positively. Because in this market, I think the dream deal, it’s not going to just land in front of your desk, right? You have to really… I don’t want to say settle, but you do have to start setting expectations and have a plan for how to get what you truly want.

David:
Yeah. And I’d say in this market, sometimes the house that you settled for, with air quotes, becomes the dream deal two years later. And this is one of the reasons why negotiation is needed with your client because they don’t know the market as good as the realtor does. It’s as often the case with your seller who thinks their house is worth $1 million when it’s worth $800,000.
If you just go in there and say, “Your house is not worth $1 million, you don’t know what you’re doing.” They’re going to go to the other agent. You’re going to lose the deal. If you go in there and say, “The comp show your house is worth $800,000. That’s where the bottom tier would be. But we’re going to try to get $850,000 based off of this information.
That’s where the probable tier would be. And what we’re really going to shoot for is $925,000. That would be the pie in the sky, best case scenario.” They’re not going to get that $925,000 unless some miracle happens, but it allows the part of their mind that doesn’t want to give up on the hope to stay alive. Right?
So, I will often write into a listing agreement. We will list the house at $925,000 for the first two weeks. And if we haven’t accepted an offer within two weeks, we’re going to drop the price to $850,000. And if it sits there for 30 days without an offer, we’re going to put it back at $800,000 which is what the comps were showing. And that’s a solution where the client gets to feel like they took their shot. They didn’t just give up on their dreams, but I don’t have to worry about them setting a baseline at $925,000.
And now, I’m trying to sell an $800,000 house for $925,000. And they’re going to blame me instead of their decision to list that high. And this system pops up in a lot of different times in life, where you want somebody to understand. Like you can get… like, let’s say someone says, “I want to be the CEO of the company.”
It doesn’t make sense to go in on your first day of work and apply for the job of the CEO. You may have to create a tier system and work your way up that system. We are used to doing that in everything in life, real estate really shouldn’t be any different.

Rob:
Wow. Wow. Wow, man. I feel like I was front row to your TED talk right here, man. Thank you so much for sharing this.

David:
Well, thank you for that. This book was probably the most fun one to write. I really do. Actually, I did a TED talk and it was about how you build skills, which is funny because SKILL is the name of this book. And that’s something I’m passionate about. I really like learning to be good at things and like dissecting it and reverse engineering it, and figuring out what does it take to be good at something. So, I got to say, I think you did a pretty good job interviewing me here and letting me run with a lot of this.

Rob:
Yes. The one thing that I really wanted to ask was, what part of your childhood were you pulling from when you wrote SKILL?

David:
No, that was just the frustration of trying to learn how to be a real estate agent when there’s hardly any good mentors out there that can teach you, and learn everything the hard way and wanting to make the path easier for everyone after me. So, if you have a loved one that works as a real estate salesperson, please do them a favor and get them SOLD and SKILL. It is such a ridiculously hard industry.
They’re not telling you a lot of the rejection they’re facing and the disappointment and the lack of confidence that they actually have. It’s brutal trying to make a living in our industry. And these resources would do them a lot of good. So, even if you’re not an agent, I think getting books like these, for agents will do wonders for them and they will end up loving you for it.

Rob:
I 100% agree. And just a reminder for everybody, it’s not quite out yet, but you can pre-order this book right now at biggerpockets.com/skill. Well, awesome, dude. Well, is there anything else that you want to leave us with about this before we wrap up today’s episode?

David:
Well, I use these skills in my own investing business. So, while I learn them as a real estate agent and now real estate team owner, I still use them in deals like what we’re buying together, Rob. So, if people want to invest with us, they can go to investwithdavidgreene.com, register there. And we can let you guys know about the deals that we have and the terms that we’re going to be offering. You could also follow me online @davidgreene24. And I would just love to get some comments with what people think about the book.
There really aren’t books written like this for real estate agents. Every time I release a book, you secretly just crash your fingers and hold your breath, hoping that it doesn’t suck terribly. That’s like every time this happens. I know that’s the cliché line with movie directors, is they’re like, “Oh, Christopher Nolan panics every time. Oh, I made trash. This movie is horrible.” And then, you wait to see if it’s going to get good reviews. So, I’d really appreciate if people would give me a review.

Rob:
Oh, it’s going to be great, man. Not even word… I’ve read the very fundamental book in my real estate investing, which I quoted it earlier and you’re like, “What? You actually read it?” Buy, Rehab, Rent, Refinance, Repeat. You’re a good writer, man. And I think you break it down for people super easily so that people can actually digest some of these concepts. So, thanks again, man.
If anybody wants to find me on the inner webs on the YouTubes, you can find me at Robuilt on YouTube. You can find me at Robuilt on Instagram. If you want to follow me on TikTok, you can follow me at Robuilto. And just a friendly reminder, I will never ask you to send me Bitcoin or invest in Forex. Please, please do not ever send me any Bitcoin. I will never ask for that.

David:
We have some fake account issues going on. That’s why we’re throwing in those disclaimers. How many messages would you say you get a day, Rob, of someone saying, “Hey, did you know you have a fake account?”

Rob:
Oh, man. A lot, dude. Just going to TikTok, there’s like 25 Robuilto, Robuiltoz, or R0built with a zero in it. It’s so frustrating. And then, they’ve sent me screenshot. Someone stole my handle… or not stole, they just snagged Robuilt on telegram. And he’s like sounds like me. It’s very creepy. So, yeah. I’ll never ask you to send me a message on WhatsApp.

David:
Well, thanks for that. Great job, Rob. Let me get us out of here. This is David Greene for Rob, often imitated but never duplicated, Rob Abasolo signing off.

Watch the Episode Here

https://youtube.com/watch?v=-H-GZgPyqI8123

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In This Episode We Cover:

  • Price anchoring and how adjusting a baseline can secure a quick win early in a negotiation
  • Staying likable, yet stern, in a negotiation so the opponents want you to win
  • Persuading opponents that your desired outcome is actually in their best interest
  • Redefining the value you bring and showcasing it in an undeniable way
  • Building a negotiation scarecrow that becomes the enemy (so you don’t!)
  • Reigning in FOMO when working with buyers or sellers in a hot housing market
  • And So Much More!

Links from the Show

Books Mentioned in the Show

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