Knowledge Empowers You™.
Scott McGillivray used this trademarked K.E.Y. phrase in his short presentation on real estate investing. The popular host of HGTV’s Income Property and the new Buyer’s Bootcamp shared his wisdom and experience in the art of negotiation and real estate investing with flashes of his megawatt smile.
Scott sprinkled his presentation with some behavioural economics (think Robert Cialdini’s laws of influence) and positive psychology, with a quote from Shawn Achor at the end:
Scott shared a few key nuggets on the art of negotiating a great deal, which was number two in his list of ten things for real estate investors, right after education in the number one spot.
Highlights from Scott’s short tutorial on the art of negotiation:
- Focus on fundamentals over emotion. It’s easy to get wrapped up in the excitement. Do your research.
- Be savvy. Real Estate agents are savvy; buyers need to be savvy too.
- Older is wiser. Bidding wars happen on properties that are recently listed. Look for properties that have been on the market for a while. Older listings don’t get as many views, and often mean the buyer initially listed over-value, then discounted. And many buyers are put off by discounted listings because they perceive there must have been something wrong. This creates an opportunity to…
- Solve a problem for the seller. Sellers are motivated for many reasons outside of the sale price of their home. Maybe they need a short closing date. If you’re in a position to meet that need, you can probably exchange that for a reduction in the sale price. That worked for me in my first home purchase when I learned the seller had a 30 day close on their next home and wanted to avoid bridge financing. This knowledge and my counter offer netted me an 18% reduction in the sale price.
- Be good at putting in offers and put in different types of offers.
- Be firm on your price and be willing to walk away. (You’ve heard me say this one before.) Nine out of ten offers that Scott makes are rejected by the seller. And yet…he has a multi-million dollar portfolio of real estate investments.
What I liked most about seeing Scott’s presentation was his showing up consistently (one of Cialdini’s laws of influence). He shows up in person as the same person he shows up on his reality TV shows. I like how he treats people. After the show, I had a chance to speak with a few of his team, and they echoed my assessment – he’s the same guy to work with.
I recalled from an early episode on Income Property when Scott emphasized that treating your tenants well is good business. Give them a nice place to live and treat them well, and they will treat your property well. Yes!
When I was buying my first home in Toronto I wanted an income suite to support my single-income mortgage. My standard for the second suite was that it had to be something I would live in myself. It bugged me to see other income property owners with suites that were dirty, uncared for and substandard. How would you feel living there?
Scott shared a poignant story about a long term tenant who recently moved out. Scott’s practice in welcoming new tenants is to leave them a welcome card and a bottle of wine. This tenant left his apartment after nine years, with a card and a bottle of wine for Scott. The law of reciprocity in action!
A reminder again of my first house in Toronto. After viewing 30 homes before finding the right one, my realtor gifted me with a lovely bowl she saw me admire in a local café we frequented to compare notes after a viewing, PLUS a cheque for $300 to help fund my renovations to install a separate suite in the single family home. Now that’s class! I remembered that gesture, recommended her often, and I still use that bowl.
Scott obviously lives by what he teaches, and his passion for helping others do the same was evident in his message:
Knowledge without action is just data. Implementation is key to succeed.
What can you implement from these lessons in your own negotiations?