One of the most important skills to master if you want to be successful in real estate investing is negotiation. This skill is useful in a variety of real estate contexts: dealing with sellers, dealing with buyers, dealing with closing agents, dealing with lenders, etc. – but the focus of this article will be to negotiate with the owners. For our purposes, we’ll assume these are private sellers rather than corporations or banks.

The key point I want to emphasize here is that timely use of select words and phrases can earn you thousands of dollars. In my experience, I have found that the most effective and ethical use of negotiating with sellers occurs early on, the first time price is discussed. I’m going to introduce you to some phrases that have seriously helped fill my bank account over the years.

Rule #1: the one who names the first number loses. He will always want to try to get the seller to tell him how much he wants for the property before making an offer. Think about it: If a seller is willing to accept $50,000 for a property, and you come up and offer $60,000, you just cost at least $10,000 and probably more.

Not all sellers will disclose their sales price to you upfront. One of the ways to counter this is to ask the seller how much he thinks the property is worth, given the existing condition.

Once you have a number from the seller, you can go to work negotiating that number lower. One of my favorite quotes is: “If I paid you everything in cash and closed fast, what’s the least you’d accept?” Most sellers understand the power of cash and why it is preferable to an offer from a buyer who needs to obtain a loan to purchase their property.

Another particularly effective phrase you can use is: “Is that the best you can do?” Make sure to ALWAYS ask this question. Often a seller will lower his selling price in response to this question.

Finally, you can use this phrase in a last-ditch attempt to get a lower number from the seller: “So you’re saying that if I can’t pay you x$ (whatever the most recent sales price is), we can’t do business?” You’ll be surprised how much many sellers will drop from their original asking price when you ask them a series of questions like this.

So, to recap, here’s a little script I recommend you use the next time you’re talking to a seller about buying your property:

“How much are you willing to sell the property for, given existing conditions?”

“If I paid you all in cash and closed *quickly, what’s the least you’d accept?”

“It’s the best you can do?”

“So you’re saying that if I can’t pay you $x (his most recent number), we can’t do business?”

Of course, just because we’ve gotten the seller to seriously discount your property from the original sales price doesn’t mean we’re done. When we put together an offer, it’s probably for less than what they’re asking, but this sequence of questions is designed to make the seller feel more comfortable selling their property at a deep discount. If the seller is answering his questions, in his mind, it is now his idea to sell the property for less. This makes his job much easier than if he had just received a sales price from the seller and then submitted a low offer, which pales in comparison.

*yes, I know ‘quickly’ is grammatically correct, but we’re not as concerned with grammar as relationship with the seller