How I Get Lower Offer Prices Accepted in 2025

Henry:
When you’re analyzing a property, the least important number on that offer sheet is the asking price. What a seller wants for their home is between them and Jesus. I’m going to make the offer that is in the best interest of me and the profit I’m trying to make. Today we’re going to teach you how to make those offers and how to negotiate. When you get a counter offer, it’s actually a whole lot easier than you think.

Dave:
Hey everyone, it’s Dave. Welcome to the BiggerPockets podcast. I’m here with my friend Henry Washington. Henry, good to see you.

Henry:
What’s up Dave? Man, glad to be here.

Dave:
I missed you. We were together on the roadshow all last week. It’s been like three full days since we hung out.

Henry:
I know. Are you okay? I mean, there’s a little bit of withdrawals.

Dave:
I was crying a little bit last night, but I’ve got it together for the podcast now. Thanks for pulling it together. We have a good show, so I needed to pull it together. We’re talking about negotiating today and I honestly, I feel like this is a topic we should probably talk about more, but we’re entering a buyer’s market and now you actually can negotiate for real estate deals in a way that was really difficult for the average person over the last couple of years. So today Henry and I are going to share the tactics we use to make offers and get them accepted. We’ll talk about how to build rapport with a seller so they may choose to work with you instead of other potential buyers and we’ll get into some specifics that might work better today than a few years ago, like non-refundable deposits, quick closing periods, waived inspection rate, buy downs and more. Alright, Henry, let’s do it. Let’s do it. Alright, well let’s just start at the top and just talk philosophy here because you buy a lot of off market deals. I buy mostly on market deals, but do you try and negotiate on every single deal? Do you ever just go in and buy at what is the list price is?

Henry:
So most of the time when I’m buying off market, there’s not really a list price, but there’s a number that the seller wants and we have to figure out how to get them to tell us what that number is and you ask, do I ever negotiate? Everything is in negotiation, right? The minute you’re having a conversation with the seller about making a purchase, you’re in a negotiation. Now when you’re buying off market, there’s no one that says, okay, ready, go. We’re negotiating. Right? It’s just part of the conversations that’s happening as soon as you start talking to a seller, whereas when you’re making an offer on the market, once you put that offer in, you have officially started your negotiation.

Dave:
Yeah, there’s this book called Never Split the Difference written by Chris Voss. It’s the best book, love that book. I think I’ve literally read it four times. Chris Voss is actually speaking at BP Con this year, so if you want to learn how to really negotiate, well check that out. But he distinguishes these different phases of negotiation and what I think most people call unquote negotiation, where you’re going back and forth about price, he calls that the haggling phase. That’s when you’re just getting down to it, but according to him, I forget if it’s 90, 80%, something like that is the stuff you do before you’re actually talking about price, where you’re establishing trust and sort of building a relationship with someone because if you just go into it and start naming prices, you both don’t like each other. You’re sort of treat each other as adversaries. Whereas if you go into the conversation seeing it as a trust building exercise that’s going to build towards that haggling stage, that’s what he says at least is more effective and definitely worked for me in my career.

Henry:
Absolutely. That pre-conversation having when you’re just really getting to know a seller or why they might be selling, it’s all positioning for the negotiation and there’s different tactics that you can use, and I hate the word tactics, it makes it sound like you’re trying to take advantage of somebody and that’s not the case, but I absolutely am trying to build trust. I’m trying to show them that I’m going to be open and honest and upfront with you and I can say that and you can go or I can say and do things that build trust so that when we do start talking numbers, we don’t have a difficult conversation because I’m coming from an honest place.

Dave:
Right, exactly. Saying that you’re being tactical or that you go into a conversation, having a plan does not mean you’re trying to manipulate someone. Exactly. It just means you’re trying to show them who you genuinely are, explain what your business is and why you can only offer the amount that you are going to offer or the other things other than purchase price that you can do to put those person at ease. That all takes in that first phase. You mentioned something that I think for this episode we probably should split up because the tactics that you use for negotiating off market and on market are going to be different, and I actually think that some of the things that you use to negotiate off market deals are probably some of the same things you use to negotiate with a contractor, for example. It’s that same sort of process for building relationships and having conversations. So let’s start there and then later in the show we’ll talk about on market deals because we are in a situation where you can negotiate on market, but it’s a little bit different. So maybe walk us through your approach to negotiating with an off market

Henry:
Salary. The negotiation really starts with the first phone call, so if they’re answering direct mail and calling me or if I’m calling them and reaching out cold, it’s all just still about trying to build trust from the get-go. When you’re talking off market, we have to understand that there’s some level of pain that’s associated with why the seller may consider selling at a discount, and so empathy is key in these situations and so the first thing I’m trying to do is understand what’s that pain point and if I can get them to tell me what that pain point is, I want to show genuine empathy for whatever situation that they may be going through. And I think that that starts to build this bridge of trust because I didn’t have to say, oh, I’m so sorry to hear about that I had a similar situation X, Y and Z, or I know A and C and then I call the negotiation that I do.

Henry:
It’s just a brutally honest approach and I find that if I just am brutally honest, most other investors and so that sets me apart and it starts to build that trust. So the first thing I’m telling them is, Hey, I am a investor and so what I want to make sure that you understand is that I’m going to have to buy a property at a price point that’s going to allow me to make profit. If your house is in great shape, it’s in good condition and time isn’t a factor for you, you don’t need any kind of speed or convenience, I’m probably not going to be the best tool in the tool belt for you. You probably need a real estate agent or someone who can help you get top dollar for your property because it’s in good shape and you have time. Now, most sellers know this, but most investors don’t say it and I want them to know that I want you to go do what’s best for you regardless of if it makes me any money.

Henry:
This is before I’ve ever seen their property or make an offer and it just builds this trust of saying, okay, this guy’s telling me to go do something that won’t financially benefit him. Most people aren’t going to have that conversation, but that also sets a tone for me for when I do make my offer. They now understand it’s not going to come in at the number you probably think it’s going to come in at, but now if I make that offer, they’re going to be less offended and they’re going to understand where it’s coming from. So it’s all just setting the tone and building trust.

Dave:
How long is that first phase where you’re just trying to get to know someone and understand that problem if you’re on the phone with them, is that two minutes or is it 20 minutes?

Henry:
That’s typically between a two and 10 minute conversation. 10 minutes is the extreme long end the conversation. The whole point of that call is to get me an appointment to go see that house so we can have a face-to-face conversation.

Dave:
Okay, I see. So you’re just trying to understand you want them to trust you enough to be like, this guy is going to be worth my time. Having Henry come over is worth my time. He at least understands me.

Henry:
Absolutely. Because if they go, oh, you know what, I’m not in a rush, it’s in pretty decent shape. They might go, well, there’s no need for us to waste time. Or they’ll open up to me about what number they want and they’ll say, well, we’re hoping to get around this much. And I can say, okay, well I can come take a look. I may be able to get in that ballpark or no, I’m not going to be able to be in that ballpark. And so it’s a level setting conversation and it’s an appointment setting conversation. Once I set that appointment, the kind of real negotiation starts.

Dave:
So let’s just say that you get to that appointment. What have you prepared at that point? Are you strategizing ahead of that meeting or you kind of just go into it to learn what you can?

Henry:
There’s two numbers I need to make an offer that I don’t have everything else. I already have the after repair value and the renovation budget. Once I get those two numbers, then I can make an offer. So as soon as I get off that phone call from that lead, I am comping the property and getting that after repair value. And so the only number I then need to make a precise offer is that renovation budget ahead of it. I’m just comping the property so that I can walk in and my whole goal is I want to make an offer while I’m at the property on the spot.

Dave:
And just so everyone knows, what Henry’s buying most of the time is something that is a little bit distressed to a lot of distress, varying degrees of distress let’s say. And so he’s not going in and buying something that is just going to turn around and rent out. He’s going to renovate it. And so the after repair value, if you haven’t heard that term before, is basically he’s going to buy it for X dollars, let’s call it $200,000. He needs to know that once he does all of those renovations, it’s going to be a 300,000 or it’s going to be three 50 or whatever it is to make sure that when he goes and sees the property and understands what it’s going to cost to renovate it, that there’s enough profit in that spread between what he’s buying it for and what it’s going to be worth to make it worth his time.

Henry:
The whole idea is to understand what it’s going to cost me and again, to continue to build that trust. So from a negotiation standpoint, once I get to the property, yes, I’m looking at what I might need to spend to fix it, but I’m also looking for ways to relate to the seller on a personal level. I am on the hunt as soon as I get to the house for something that can take the walls down.

Dave:
And you’re talking about emotional walls because in real estate we can be talking about real drywall.

Henry:
Yes, yes. Emotional walls. Yep. It’s going to be like a wall between you and a car salesman. You’ve got your guard up and so the guard’s going to be up because they don’t know that I really care about what they do at this property. They are assuming I’m trying to get it as cheap as humanly possible and I don’t care about what happens to them. And so there’s this wall up and my whole goal when I get there is how do I get this wall down so that we can have an honest conversation? Some examples are I saw a guy, clearly he was a painter, he had been painting, and so I was able to talk to him about how my dad was a high school art teacher and I showed him, I pulled up pictures on my phone of art, my dad did, and then that got us talking about art and we started to relate to each other and we weren’t even talking about the house at that point, but we were building this bridge, this relationship. So I’m on the lookout for things that I can humanize myself to them.

Dave:
If you go in and focus on the big picture, at least in my experience, that’s what builds trust. When you’re really trying to understand big picture value, you’re not trying to list everything that’s wrong with the house because in a seller’s distress situation, they know there’s stuff wrong with the house. Of course they know that. And so how do you sort of strike that line because you do need to convey to them what the real value of the house is, but you don’t want to insult them, nor do you want to nickel and dime them.

Henry:
I mean, I think you said it in your answer, they know their house needs work. Now, occasionally you run into the delusional seller who thinks their house is perfect when it’s not, but most of the time they know I don’t want to set a tone where I’m making you feel bad or embarrassed about your property pointing out everything that’s terribly wrong that you couldn’t afford to fix,

Henry:
That doesn’t set the stage for a good negotiation that doesn’t tear down walls. It builds them up. I will only ask questions about condition when there’s a genuine concern. If I see spotting on the ceiling from what looks like to be a leak, I’m going to ask if there’s an active leak or not, or how old is this and I’m going to touch it. So if I’m in the house and it’s the middle of summer and it’s super hot, I’m going to ask what’s going on with the ac because I know that that’s something I got to fix. If there’s a foundation problem, I’m going to ask them, have they had that looked at or not? Did they get any quotes? Can you send me those quotes? Because I really do want to get a sense for what it’s going to cost me to fix the foundation, but for little things, I’m not bringing it up.

Dave:
Yeah, that’s a great advice I’ve found in my experience. If you sort of just ask people about their personal experiences with the home and sort of ask them to tell the story, they’ll tell you everything. They’ll be like, yeah, my cat died over there, or My son had his first steps over there, which is lovely. It’s kind of a fun, nice part of being in real estate, but I find sellers more often than not will disclose a lot.

Henry:
They’ll tell you everything.

Dave:
If they genuinely believe that you are on their side, they’re going to tell you and they’re going to look for a mutually beneficial relationship, which is exactly what you as an investor should also be looking for.

Henry:
Exactly. I don’t want to do a deal unless it’s a win for everybody. And that’s kind of one of the things I say on the front side as well.

Henry:
So once I walk the property and I see what it’s going to cost to fix it, I now have everything I need in order to make an offer. Hopefully I found something in the home that I can relate to them on, and we’ve kind of bring down those walls. Once I’ve done all that, I typically say, Hey, let me run to the truck for five minutes. I’m going to do some calculations and I’ll come back and I’ll make an offer. And that’s when I’ll go to my truck and I’ll usually call my agent, send in the pictures and we’ll figure out, all right, this is a RV seems solid based on what I’m seeing, here’s what we can do. And so I get my offer number ready and then I go back into the seller. And again, I take a brutally honest approach. And so what I do is I come in and I say, okay, here’s what I got.

Henry:
And we sit at a table typically, or we sit down somewhere and if we can’t sit down, then we just kind of lean on my truck and I show them and I take a pen and a blank sheet of paper and I say, alright, here’s what I see is you got three options. Option one is you fix this thing up yourself and you sell it for top dollar. Here’s what I think that looks like. My agent told me that he would sell this house for me once I fixed it all up for $400,000. I tell him what I’m going to try to sell the house for. What I typically do is I ask them, I say, okay, if this house was all fixed up and it was perfect and it was nice and it looked like the stuff you see on HGTV, what would you sell your house for? Because I’m trying to get them to say the rv. If his RV and my RV are close, then we’re going to have a good

Dave:
Negotiation. That’s great.

Henry:
If his RV and my A RV are way off, then I know that I probably don’t need to go into negotiating with the seller. They’re not realistic about what their house is worth. If they’re like, oh, all fixed up, yeah, I’d sell this for five 50, then it’s a different conversation. I’m not going to try to make an offer on that property. I’m going to try to understand where they get that number from. And I found when you try to convince people that their house is not worth what they think it is, even with facts, it’s just you’re butting heads, you’re banging your head against the wall. So I typically would say, Hey, I’m probably not the buyer for you. I don’t know that I’d be able to sell it for that much, but I really want you to. I’ll give you an agent recommendation to help you

Henry:
And I’ll do it that way. Then they need to get brought down to reality a little bit before I’m able to make an offer that makes sense. So I ask them, and so if they say anything close to 400, which is what I think the A RV is, I’m like, good. Perfect. That’s exactly right. I would try to sell this for 400 as well and it needs some work. How much work would you say it needs? I want them to give me the best guess. If they say it needs 50 and I think it needs 30, then that’s a good conversation. That’s

Dave:
Great.

Henry:
If they say it needs 20 and it needs 120, then I have some ground to cover here to show them. And so typically what I found is I’m usually about 20 grand to 30 grand higher than what they say. And that’s because they’re thinking I could do this work myself

Dave:
Or just having kept track of material and labor costs changed a lot probably in the time they’ve owned their home.

Henry:
Exactly. So they’ll say, oh, it probably needs about 30. And I say 30 is probably not too far off. Again, I don’t do any of the work. I hire it all out. Contractors are expensive right now. Labor’s crazy expensive right now, so it probably costs me about 50. I know you could probably do it for 30, you’d probably do some of that yourself, but it’s going to cost me about 50 and they’ll get it right. And so if you were going to do this yourself, you could sell it for 400,000, you’re going to have to put about $50,000 worth of work into it. How long do you think it would take you to do that work? And they’d say Probably like 90 days. And I’m like, yeah, maybe like six months or so. Yeah, probably like six months. So six months, $50,000 plus another three months on the market.

Henry:
So in nine months, here’s what you could do. You could sell it for 400. And I say, okay, option two is you could do just enough to sell this property in its current condition. My agent thinks that this property in its current condition could probably sell for like $320,000, but you would need to make sure all the floors have coverings, all the mechanicals work. So as long as you’re plumbing, HVAC, and your floors are covered and you fix anything, that’s the major damage. So it’ll probably cost you about 10 grand to get it in selling order. And then you could sell it for $320,000, may take you three months to do that work another two to three months on the market. So in six months you could sell it for $320,000 with only a $10,000 investment. Or what I could do is I could come in and I can get you paid in seven days.

Henry:
Again, it’s going to cost me about $50,000 to do that work. I am going to try to sell it for $400,000, but I got to pay an agent that’s 6%, right? So I subtract 6%, I’m doing this calculations right in front of them. Then I got to pay the mortgage. Well, I have it, yes, I buy with cash, but I do borrow that money from a private investor and they want their 12%, so that’s about $15,000 in holding costs. Then I got to pay for the renovation. We said it costs going to cost about $50,000, so we subtract $50,000 from that number and then I’ve got to pay closing costs and I’m going to pay your closing costs when I buy it, which is going to be about $10,000. And then I got to pay closing costs again when I sell it, so that’s probably another $10,000.

Henry:
And so I have the sheet in front of ’em where I say, here’s the 400 minus, the 6% minus the 15 minus, the 50 minus the 10 minus the 10. And I said, obviously I can’t do this for free. I have to be able to make some money. So when you subtract my profit, I show them my profit. I tell them, look, for me to do a deal of this size, I’m looking to make about x, I want to make typically the risk I have to put into it. I’m going to spend 50. I’d like to make at least 50, and so here is the number that I would offer, and it’s just literally a calculation down the piece of paper that they can see, and then I show them the number.

Dave:
Honestly, this is working on me, the amount of math you just did. I’m like, I don’t want to do all that stuff. Let Henry do it. It’s very effective because you’re explaining to them how complicated flipping a house is not in every detail, but they’re not thinking about closing costs. I would imagine the everyone’s not thinking about closing costs. They’re probably not even thinking about commissions to the selling agent. In their mind they’re thinking it’s worth 400, I could put 50 grand into it, I’m going to make X. And then you show them actually there’s a lot more to this and then people get to make their own decision about whether they’re willing to take on that work or not. But you’re being very transparent with them.

Henry:
Absolutely.

Dave:
I can imagine that working very well. Do you have an estimate once you get to this stage of your negotiation process, how often do they take the offer?

Henry:
I would say I have to make about 10 to 15 offers before I get one accepted. And so it’s a lot. It’s a volume game

Dave:
And where does it break down usually at this point after you’ve done this and they just don’t like the number.

Henry:
Typically if they don’t say yes right away, it’s they’re truly trying to figure out is there another option? And typically they’re looking at that second option. Maybe I just list it and try to get X right, and that’s okay because you will make more if you do that. It’s just going to take a long time. And so it’s typically they just need some time to think through those things. And if they’re truly motivated, I will be the investor that typically gets the call back because every other investor made an offer in this same ballpark, but none of them explained how they got there. And so when it gets to a point where they’re ready to say, okay, I’m just going to sell it and get what I can, I frequently will get a call back even if my offer wasn’t as high as another investor’s offer, just because I took the time to build the rapport and the trust and be honest and transparent with them.

Dave:
And then how often do people come back if they don’t accept right away? Do you get people who call you a couple weeks, months later?

Henry:
All the time. So we put ’em in follow up so that we’re actually calling ’em every week or so just checking to say, Hey, did you get an offer? Did you sell it? My offer still stands, but a lot of the times they’ll call back sometimes a year or so later once they’ve realized, okay, it’s been a year. I haven’t done anything, I might as well get rid of this thing and make some money.

Dave:
Do you ever budge on price or do you sort of set your price and stick to it? Always.

Henry:
I’ll budge on price. So there’s a couple of us and sometimes depending on how much it is, I’ll show ’em what I want to make. There was one recently where it needed $120,000 renovation and before I showed him how much I wanted to make, I told him, I was like, look, this house needs a lot of work, which means I’d be taking on a lot of risk. I’m going to want to make a lot of profit to take on that risk, so I may not be the best buyer for you. And there’s probably other investors who are willing to make less to do this much work, and I set that tone on the front side so that they knew when I said, Hey, this is what my offer’s going to be. Yeah, it’s because I’m budgeting to make a decent profit. And again, it’s just honesty. If I know my number’s going to be super low and another investor might be higher, I’m just going to tell you because it is going to be what it’s going to be anyway. When I make that number, you’re going to be pissed and then you’ll go somewhere else. Whereas if I’m just honest with you and I show you everything, maybe there’ll be a shot for me down the road if you don’t find another investor that you trust that’s going to give you a higher number.

Dave:
Well, this has been a great conversation. I’ve learned a lot from you, Henry, already about negotiating off-market deals. I do want to turn to on-market deals. I think this is an emerging opportunity for real estate investors that we need to talk about, but we do need to take a quick break. Before we go to break though, I just want to remind everyone if you want to learn more about negotiating the kind of stuff that Henry’s been talking about here, one of our keynote speakers at PP Con this year is Chris Voss. He is the former lead crisis negotiator for the FBI. He’s written a book called Never Split the Difference. I think I’ve literally read it four different times. I know Henry’s a fan as well and the skills that he teaches from his own career negotiating stuff, way more high stakes than real estate, literally with people’s lives are lessons that you can truly apply to your own real estate investing career. I genuinely attribute probably hundreds of thousands if not more dollars of my net worth to the stuff I’ve learned from his book. So if you want to learn from him and be at BB Con where he’s a keynote, hit to biggerpockets.com/conference and you can get your tickets for BB Con. It is this October 5th through seventh at Caesars Palace in Las Vegas. It’s going to be a lot of fun. Go check it out. We’ll be right back.

Dave:
Welcome back to the BiggerPockets podcast. I’m here with Henry Washington. We’re talking about negotiating in today’s day and age. Henry just gave us a amazing overview of how to negotiation with off market deals. Let’s talk about on market deals, Henry, because this is an emerging opportunity in my mind, you’re probably thinking, yeah, it would be great negotiate every deal, but that’s not realistic. There’s actually this data that they track called the list to sale ratio. Basically how much of list price people are paying on average, and for years it’s been at like 102, 103%. So people on average paying two or 3% above what’s normal now it’s closer to 98, which means on average people are paying 2% less than list price. And what I’m going to ask Henry is how do you do better than that average? How do you pay 5% lower than list price? That’s what I would be shooting for as an investor right now, but let me just ask you, Henry, do you think that’s reasonable?

Henry:
Oh, absolutely. In this market, 100%.

Dave:
So how do you even go about it?

Henry:
If you’re a seller and you’re making an offer on a property that’s been on the market for a while, that’s your first clue to let you know that you’ve got some wiggle room to make an offer at a price point lower than list price. So days on market is always going to be your first indicator. If you are making an offer on a property that just went on the market today and you really want that property, you probably should come in stronger because you don’t have time on your side to show you that there isn’t a lot of demand for this property. And so there’s some emotion tied to it and there’s some reality tied to it, but days on market is your first indicator for negotiation as a seller.

Dave:
Yeah, I think this is probably the single most important thing about judging on market deals right now is that put yourself in the seller’s shoes, right? They need to feel a little bit of pain to come down off of their expectation because they just put the property down the market, let’s call it for $500,000. Their agent just told them that it’s worth $500,000. That’s why it’s listed for $500,000. And so if you come in at four 40 on the first day and their agent just told them it’s worth 500,000, they’re obviously not going to accept that. Now if it’s been on the market for 90 days, clearly the market has given them feedback that it’s not worth $500,000. It’s worth something less than that. Can you knock 10% off of it? Probably not right away, but could you knock something off of it probably. And so I think to Henry’s point, that’s a really important thing. Same thing with stuff that had gone pending and come back on the market again, it’s another example of sellers getting feedback from the market that this isn’t going to be easy for them. And I think in my experience, the sellers then thinking, how do I solve this problem? It’s either sitting on the market or I can’t get it to actually close, so I’m willing to play with the levers that I have in order to move this thing. And price is one of those levers. We can talk about the other ones.

Henry:
Yes, and there are ways for you to negotiate when a house first comes on the market and even get a lower price point, but again, you’re going to have to shift one of the levers in their favor in order for you to get the lever of price closer to your favor. And so what you might negotiate depends on how long that property may have been on the market or not. If I want get a deal for less than what it’s listed for and it just came on the market, I can offer less, but I have to give the seller something else that might be enticing to them, like a large non-refundable deposit or a very fast close something that says, yeah, I’m going to give you 20 grand less than what you’re asking, but you’ll get all your money in seven to 14 days with a quick inspection. These things are worth something to sellers.

Dave:
Yeah, I just did that. I bought a property for list price because I walked in there and my agent said, it’s probably worth, my agent said, there’s going to be a bidding war for this one. It’s underpriced on the market and it’s going to sell for a hundred grand. I was like, how do I get it for list price, which in my mind is a discount because it was undervalued on the market, which happens, and so I did exactly what you did. I put a large deposit down, I waived my appraisal contingency. They had a pre-inspection, so I just accepted the pre-inspection without anything else, and I said I would close in I think 21 days, and that gave them all of the assurances that they need and they took my offer and didn’t allow any more offers. It was great. That’s exactly what I wanted. I was able to use non-price negotiation. I feel like Faith probably thought they won. They got full list price and I felt like I won because I think that property was worth probably five to 8% more than I paid for it.

Henry:
Yep, absolutely. That is exactly the way you can do it with a newer listing.

Dave:
So I know you’ve talked a lot about being open and honest and transparent with your off market deals. Do you take the same approach with an on-market deal because kind of different, it’s so formal, you don’t have a personal relationship, you don’t really have trust.

Henry:
So

Dave:
How do you signal your intent, especially if you’re making what is maybe a low ball kind of offer?

Henry:
So my agent already knows that I’m a credible buyer. I do what I say. And so he will typically set the stage with the other agent and say, Hey, I’ve got a cash buyer. He’s bought tons of properties all over northwest Arkansas, and that kind of sells them on a credibility package for me so that I’m not just some random person making a low ball offer, I’m making the offers that I think make the most sense and maybe we can work out something with your seller. So he kind of sets the stage, builds some credibility for me because I can’t do it myself to the other agent. Now whether the agent relays that to the seller, we can’t control, but we still do it with the other agent and then we just make the offer. And that’s what I tell people. It’s so impersonal that it’s more of a volume game with on market deals, you just have to make your offer and you can try to explain things to people so many times and some agents are going to hear it and some agents aren’t going to hear it and some agents aren’t going to care and some aren’t going to care.

Henry:
You just have to shoot your shot when you’re making on market offers.

Dave:
Dude, I am constantly surprised by what offers on market get accepted and rejected. The ones I’m like, oh, I just made such a strong offer. They’re like, yeah, no, that’s rejection. Then sometimes you throw in and you’re like, they’re never going to take this, and they’re like, it’s yours. Okay. It’s super surprising

Henry:
You have to shoot your shot. But I think that’s where a lot of investors fail is they don’t shoot their shot, they don’t make the offer so worried about offending someone or that it’s so far below retail value or their personal agent talks ’em out of making the offer.

Dave:
That’s what I was going to say. You got to find an agent who’s willing to work with your strategy, especially if they’re a new agent who came about in the last five years. They’ve probably never had leverage to negotiate before. They’ve been in a significant seller’s market for five years plus and they’re not used to it, and so you need to find someone who knows how to do this and is willing to do that too.

Henry:
Absolutely.

Dave:
I think for me, the thing I’ve tried to convey in the last few years is I’m going to close. That’s like you talked about your credibility packet. The thing I want the seller to understand, which you can’t say to them directly, which is annoying, but through your offer, the thing I am trying to say is, this guy is serious. He’s bought real estate for a long time. He’s not going to nickel and dime you on the inspection. He’s not going to back out because his interest rate changed by an eighth of a point. He wants this deal at this price, and if you accept this offer, he’s going to close on this deal because right now the number of contracts that are getting canceled is a lot, and this is a legitimate fear for sellers and to me, I think most of them will probably take five grand off their price, 10 grand off their price to know like, Hey, I’m signing one contract. This thing’s going to be done and paid for. I’m going to have my money in three weeks and that’s it. That is worth money to people, and if you can make that kind of offer, use that leverage.

Henry:
The other part of negotiation with these on-market deals, you got to understand what you can do personally. What are your strengths? If you’ve got cash that you can put down and you’re so confident, if you’ve got experience and you’re confident that you want and can close this deal, then you can put down a non-refundable deposit that speaks volumes with non-refundable deposit because that says, this guy’s going to close. He is not just going to put up 10 grand and not close the deal, which is different than earnest money. You can get earnest money back. So if you’ve got cash and you’re confident in a deal, then non-refundable deposit can speak volumes and help you get a lower price point. If you’re concerned about your payment and you don’t have a ton of cash, then you can maybe pay more or pay the asking price, but you can get them to buy down your rate with some of those dollars. So now your interest rate is lower, your monthly payment is lower. They still get a price that makes them feel like they’re selling the house for a good amount of money and you’re getting the house with a lower interest rate. You may not have got the price you wanted, but you got the payment

Dave:
You wanted. Highly recommend doing that. If you’re negotiating for new construction these days, most of the times if you’re buying new construction, especially from a large builder, they’re not going to want to give up their comps.

Dave:
They’re building, let’s just call it a hundred properties in the same, so if they lower the price for you, they’re going to have to lower the price for everyone, but no one knows if they pay down your mortgage rate, if they buy your points for three grand or five grand. And that is exactly what Henry’s just saying. You can negotiate with them and usually they have the team and the sophistication to know exactly how to do this, right? They have a whole backend system to pay down your mortgage or to buy down your points. And so for new construction, I would think you kind of have to do this right now. You can look, these are publicly traded companies. You could see that they’re doing this all the time, and if you’re not doing that on new construction, it’s a huge mistake.

Henry:
Absolutely. These new construction sellers are trying to sell these homes and they need to sell them for the price point they underwrote them at, so they’re willing to take 10 grand of your purchase price and buy down your points because it still looks like they sold the house for their asking price.

Dave:
They keep their comps.

Henry:
Yeah.

Dave:
Alright, well this has been fascinating, Henry. I love this show. We should talk about negotiating more. This has been super helpful tips. We do have to go here soon in a minute though, but any other last tips for our audience here on negotiating in 2025?

Henry:
First and foremost, use your powers for good.

Henry:
We’re negotiating yes, because we’re trying to make sure that we’re not overpaying for something, but I found myself in a negotiation before with the seller who had no idea what they were doing and I could have easily taken advantage of them. And so we have to understand, use our powers for good. A real estate deal needs to be a win for everybody. If it is not a win for everybody, then you probably shouldn’t do the deal, even if it’s a massive win for you. If you know they’re taking a loss and you feel like you’re taking advantage of someone, then you probably are. You should probably back away from that. And the second thing is for you to be a good negotiator, you have to understand what your superpowers are, what you can bring to the table. Because if you know what you have, if you’ve got cash, if you’ve got time, if you’ve got resources, lending connections, whatever it is that you can throw something into your negotiation that may benefit the seller, that doesn’t affect the price.

Henry:
These are all things that you can use to help you get the price point that you want. So think a little bit outside the box, especially if you’re dealing off market, on market, you only have a few levers you can pull, but off market, we’ve done things where I knew this person was going to have a hard time. There was a single elderly woman and I said, Hey, here’s the offer we can make. I know I can’t pay you as much as everybody else, but what I can do is I can hire movers and we can get those movers to come here and help you move. We can get you into a place safely and you won’t have to deal with that. Right? I knew that that was something of value to her. She was overwhelmed with thinking about, okay, I need to sell it, but I also need to get out of here. And so what can you offer that’s easy to you that may not be easy for someone else, and these are things you can use to help you get priced down

Dave:
A hundred percent. This is one of the things I learned negotiating over the last 15 years a lot from this book. Never split the difference but negotiating. I think a lot of people approach it with bravado. They’re like, I got to be tough. I got to go into this and be like, I got this number and I’m sticking to it. Whereas every successful negotiation I’ve ever had in my life comes from a high degree of emotional intelligence, understanding what the other person’s problem is and framing yourself as the person who can solve that solution best. That’s how you win. You have to be mutually benefit. You can’t see this as a I win, they lose. It’s how do we both win? And if you approach, in my experience, if you approach negotiating that way, you really can both win and you’re going to get a lot more deals.

Henry:
Absolutely.

Dave:
Alright, well Henry, thank you so much. I love this episode. This was a lot of fun. Thank you all so much for listening to this episode of the BiggerPockets podcast. If you want to talk with me and Henry about negotiating, you want to learn from the FBI negotiator Chris Voss, don’t forget to go to biggerpockets.com/conference and get your ticket to BP Con today. Thanks again, man, for being here.

Henry:
Thank you for having me.

Dave:
See you all next time for another episode of the BiggerPockets podcast in just a couple of days.