Pod Insights BiggerPockets Real Estate Podcast How I Get Lower Offer Prices Accepted in 2025 About this episode Sellers are already accepting lower offer prices. The data is clear—the buyer’s market is back. So, how do you ensure you’re getting the best price for you, without making a seller feel like they’re getting taken advantage of? This episode is all about how we negotiate the best real estate deals in 2025, using methods that everyday homebuyers are unaware of, and most investors never try. This is how to do real estate negotiation the right way. Listen: you don’t need to be the highest offer to win the house. We’re showing you other “levers” you can pull besides the offer price that give the seller confidence in you as a buyer and get you under contract quicker. What if you’re doing off-market deals? You know, sending mailers, talking to sellers, walking homes. Henry breaks down the three offers he gives every seller (yes, three), and why this strategy is a winner. Rather have a low interest rate than a slightly lower price? There’s one subset of sellers that’s basically begging buyers to take houses off their hands. The best part? They’ll actually pay to get you a lower mortgage rate. Don’t worry, we’re sharing all our expert tricks to get you the best price/rate/terms on your next investment property. Learn expert negotiation tips from former FBI hostage negotiator Chris Voss at BPCon2025! In This Episode We Cover The “pre-negotiation plan” that leads to you making a much better offer Negotiating for a lower interest rate and the sellers who will pay for it Data proving that sellers are ready to accept lower offer prices How to “build trust” with sellers before you make a lowball offer The three options you should give every off-market seller (don’t give just one) Other “levers” you can pull to make a great offer without raising your price And So Much More! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1157 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected] . Learn more about your ad choices. Visit megaphone.fm/adchoices
Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Henry Washington? 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.
0:26 Dave Meyer? Hey everyone, it's Dave. Welcome to the BiggerPockets Podcast. I'm here with my friend, Henry Washington. Henry, good to see you.
0:34 Henry Washington? What's up, Dave? Man, glad to be here.
0:36 Dave Meyer? I missed you. We were together on the road show all last week. It's been like three full days since we hung out.
0:41 Henry Washington? I know. Are you okay? I mean, is there a little bit of withdrawals?
0:44 Dave Meyer? I was crying a little bit last night, but I've got it together for the podcast now.
0:49 Henry Washington? Thanks for pulling it together.
0:50 Dave Meyer? 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,
1:32 Dave Meyer? waived inspection, rate buy downs, and more. All right, Henry, let's do it.
1:37 Henry Washington? Let's do it.
1:38 Dave Meyer? All right, 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? Have you ever just go in and buy at what is the list price is?
1:55 Henry Washington? 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 a negotiation, right? Like 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? Like, 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.
2:32 Dave Meyer? Yeah, there's, there's this book called Never Split the Difference, written by Chris Voss. It's the best book. I think I've literally read it four times. Chris Voss is actually speaking at BPCon 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 quote unquote, negotiation, where you're going back and forth about price. He calls that the haggling phase. That's when you're just like 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.
3:15 Dave Meyer? You 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 this definitely worked for me in my career.
3:32 Henry Washington? Absolutely. That pre-conversation that you're 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 because it makes it sound like you're, you're trying to take advantage of somebody.
3:50 Dave Meyer? Right.
3:51 Henry Washington? And that's not the case. But I absolutely am trying to build trust because 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, yeah, right. 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 you know I'm coming from an honest place.
4:09 Dave Meyer? 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. 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.
4:52 Dave Meyer? 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 seller.
5:10 Henry Washington? Yep. The negotiation really starts with the first phone call. So if they're answering direct mail or 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 then 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, I'm so sorry to hear about that.
5:54 Henry Washington? I had a similar situation, X, Y, and Z, or I know A, B, and C. And then I call the negotiation that I do is just a brutally honest approach. And I find that if I just am brutally honest, most other investors aren't. 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 gonna have to buy a property at a price point that's gonna 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 gonna be the best tool in the tool belt for you.
6:31 Henry Washington? 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 like, I want you to go do what's best for you, regardless of if it makes me any money. 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. You know, most people aren't gonna have that conversation, but that also sets a tone for me. For when I do make my offer, they now understand it's not gonna come in at the number you probably think it's gonna come in at. But now if I make that offer, they're gonna be less offended. They're gonna understand where it's coming from. So it's all just setting the tone and building trust.
7:15 Dave Meyer? How long is that first phase where you're just trying to get to know someone and understand that problem? Like if you're on the phone with them, is that two minutes or is it 20 minutes?
7:23 Henry Washington? That's typically between a two and 10 minute conversation. 10 minute is the extreme long into 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.
7:35 Dave Meyer? Yeah, okay, I see. So you're just trying to understand, you want them to trust you enough to be like, this guy's gonna be worth my time. Like, like having Henry come over is worth my time. He at least understands me.
7:48 Henry Washington? Absolutely, because if they go, oh, you know what, you know, 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 gonna be able to be in that ballpark. And so it's just a, it's a level setting conversation and it's an appointment setting conversation. Once I set that appointment, the kind of real negotiations starts.
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11:55 Dave Meyer? 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?
12:06 Henry Washington? 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.
12:12 Dave Meyer? Okay.
12:13 Henry Washington? 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. So 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.
12:36 Dave Meyer? 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 he's 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 350 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.
13:18 Henry Washington? 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.
13:40 Dave Meyer? And you're talking about emotional walls, right? Because in real estate, we could be talking about real drywall.
13:45 Henry Washington? Yes, yes, emotional walls. Yep, it's going to be like a wall between you and a car salesman. Like you know, you've got your guard up, right? 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.
14:27 Henry Washington? And we weren't even talking about the house at that point, but we were building this bridge, this relationship. So I'm always, I'm on the lookout for things that I can humanize myself to them.
14:37 Dave Meyer? 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 like list everything that's wrong with the house. Cause in a seller's distrust situation, they know there's stuff wrong with the house, right? 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.
15:05 Henry Washington? I mean, I think you said it in your answer. They know, like, 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. And so I'm not like, I don't want to set a tone where I'm making you feel bad or embarrassed about your property because I'm pointing out everything that's terribly wrong that you couldn't afford to fix.
15:26 Dave Meyer? Right.
15:27 Henry Washington? 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. Like if I see, you know, 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, right? Or, you know, 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, right? Because I know that that's something I got to fix, right? 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.
16:07 Dave Meyer? 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 sort of like tell the story, they'll tell you everything. They'll be like, yeah, my cat died over there. Or like, you know, my son, you know, 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.
16:32 Henry Washington? They'll tell you everything.
16:32 Dave Meyer? 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.
16:43 Henry Washington? 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.
16:49 Dave Meyer? Yeah.
16:49 Henry Washington? 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, you know, ARV 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. 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, and I show them and I take a pen and I
17:33 Henry Washington? just a blank sheet of paper and I say, all right, 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, right? So I tell them, I tell them what I'm going to try to sell the house for.
17:56 Dave Meyer? Yeah.
17:56 Henry Washington? 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? Cause I'm trying to get them to say the ARV. Cause if his ARV and my ARV are close, then we're going to have a good negotiation.
18:11 Dave Meyer? That's great. Yeah.
18:12 Henry Washington? If his ARV and my ARV 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 550. 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. Like it's just your 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.
18:48 Dave Meyer? Yeah.
18:49 Henry Washington? And I'll, and I'll do it that way. Cause 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 asked them. And so if they say anything close to 400, which is what I think the ARV 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? Cause I want them to give me the best guess, right? If they say it needs 50 and I think it needs 30, then that's a good conversation.
19:15 Dave Meyer? That's great.
19:15 Henry Washington? If they say it needs 20 and it needs 120, right? Then I have some, some ground to cover here to, to kind of show them. And so typically what I found is I'm usually about 20. Grand to thirty grand higher than what they say. And that's because they're thinking I could do this work myself.
19:30 Dave Meyer? Or just having kept track of
19:31 Henry Washington? Oh, yeah.
19:32 Dave Meyer? Material and labor costs because it's changed a lot, probably in the time they've owned their home.
19:36 Henry Washington? Exactly. So they'll say, oh, it probably needs about thirty. And I say, you know, thirty 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 is crazy expensive right now. So it probably costs me about fifty. I know you could probably do it for thirty because you'd probably do some of that yourself. But it's going to cost me about fifty and they'll get it, right? And so if you were going to do this yourself, you could sell it for four hundred thousand. You're going to have to put about fifty thousand dollars worth of work into it. How long you think it would take you to do that work? And they'd say, oh, probably like ninety days. And I'm like, eh, maybe like six months or so. Yeah, probably like six months. Okay, so six months, fifty thousand dollars. Plus another three months on the market. So in nine months, here's what you could do. You could sell it for four hundred.
20:18 Henry Washington? 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 three hundred and twenty thousand dollars. 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 a major damage. So it probably costs you about ten grand to get it in in selling order. And then you could sell it for three hundred and twenty thousand dollars. It 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 three hundred and twenty thousand dollars with only a ten thousand dollar investment. Or what I could do is I could come in and I can get you paid in seven days. Again, it's going to cost me about fifty thousand dollars to do that work.
21:02 Henry Washington? I am going to try to sell it for four hundred thousand dollars, but I got to pay an agent. That's six percent, right? So I subtract six percent. I'm doing this calculations right in front of them. Then I got to pay the mortgage while I have it because yes, I buy with cash, but I do borrow that money from a private investor and they want their twelve percent. So that's about, you know, fifteen thousand dollars in holding costs. Then I got to pay for the renovation. You know, we said it's going to cost about fifty thousand dollars. So we subtract fifty thousand dollars 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 ten thousand dollars. And then I I gotta pay closing costs again when I sell it. So that's probably another $10,000, right? And so I have the sheet in front of them where I say, here's the 400 minus the 6% minus the 15 minus the 50 minus the 10 minus the 10.
21:46 Henry Washington? 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, you know, 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, down the piece of paper that they can see. And then I show them the number.
22:12 Dave Meyer? Honestly, this is working on me. Like 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, right? 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 like, 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. I can imagine that working very well.
22:54 Dave Meyer? Do you have an estimate? Like, once you get to this stage of your negotiation process, how often do they take the offer?
23:03 Henry Washington? I would say I have to make about 10 to 15 offers before I get one accepted. And so it's a lot, like it's a volume game.
23:10 Dave Meyer? And where does it break down usually at this point? Like after you've like done this and they just don't like the number?
23:16 Henry Washington? Yeah, typically if they don't say yes right away, it's they're truly trying to figure out, you know, is there another option? Right? 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, you know, 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 the 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
23:58 Henry Washington? offer, just because I took the time to build the rapport and the trust and be honest and transparent with them.
24:04 Dave Meyer? And then how often do people come back? You know, like if they don't accept right away, do you get people who call you a couple of weeks, months later?
24:11 Henry Washington? All the time. So we put them in follow-up so that we're actually calling them every week or so, just checking to say, hey, did you get an offer? Did you sell it? Did you, you know, you know, 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.
24:28 Dave Meyer? Do you ever budge on price or do you sort of like set your price and stick to it always?
24:32 Henry Washington? I'll budge on price. So there's a couple of us and sometimes depending on how much it is, I'll, I'll show them what I want to make. Like there was one recently where it needed $120,000 renovation. And before I showed them how much I wanted to make, I told them, 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 is going to be? Yeah, it's because I'm budgeting to make a decent profit. And again, it's just honesty. Like if I know my number is going to be super low and another investor might be higher,
25:16 Henry Washington? 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, you know, 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.
25:33 Dave Meyer? 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 because 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 PPCon 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.
26:13 Dave Meyer? 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, like 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 BPCon where he's a keynote, head to biggerpockets.com/conference and you can get your tickets for BPCon. It is this October 5th through 7th at Caesar's Palace in Las Vegas. It's going to be a lot of fun. Go check it out. We'll be right back. For my wife's birthday, I wanted to make her a new website for her landscape
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30:36 Dave Meyer? 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 negotiate 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 to 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 2% or 3% above what's normal. Now it's closer to 98, which means on average,
31:18 Dave Meyer? 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, like, do you think that's reasonable?
31:31 Henry Washington? Oh, absolutely. In this market, 100%.
31:34 Dave Meyer? So how do you even go about it?
31:35 Henry Washington? 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.
32:00 Dave Meyer? Yeah.
32:00 Henry Washington? 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.
32:13 Dave Meyer? 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 on 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 440 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.
32:53 Henry Washington? Yep.
32:53 Dave Meyer? 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.
33:06 Henry Washington? Yeah.
33:07 Dave Meyer? Again, it's another example of sellers getting feedback from the market that this isn't going to be easy for them. And I, I think in my experience, right, the seller's then thinking like, how do I solve this problem? You know, like 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.
33:31 Henry Washington? 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 gonna have to shift one of the levers in their favor in order for you to get the lever of price closer to your favor.
33:48 Dave Meyer? Yep.
33:48 Henry Washington? And so what you might negotiate depends on how long that property may have been on the market or not. Like if I want to 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.
34:06 Dave Meyer? Yep.
34:07 Henry Washington? Or a very fast close, right? Something that says, yeah, I'm gonna give you 20 grand less than what you're asking, but you'll get all your money in seven to 14 days, you know, with a quick inspection. Like, these things are worth something to sellers.
34:21 Dave Meyer? Yeah, I, I just did that. I bought a property for list price because I walked in there and my agent said it's probably worth, that my agent said there's gonna be a bidding war for this, right? Like this one is, it's underpriced on the market and it's gonna be, it's gonna 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.
35:03 Dave Meyer? It was great. That's, that's exactly what I wanted. I was able to use non-price negotiation. I feel like they 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 eight percent more than I paid for it.
35:17 Henry Washington? Yep, absolutely. That is exactly the way you can do it with a newer listing.
35:21 Dave Meyer? 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? Cause it's kind of different. Like you're just, it's so formal, right? Like you don't have a personal relationship. You don't really have trust. So like, how do you signal your intent, especially if you're making what is maybe a low-ball kind of offer?
35:44 Henry Washington? 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, you know, I'm not just some random person making a low-ball offer. Like 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.
36:23 Henry Washington? And then we just make the offer and that's what I tell people. Like it's so impersonal that it's more of a volume game with on-market deals. Like 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 that are going to care and some aren't going to care. Like you just have to shoot your shot when you're making on-market offers.
36:45 Dave Meyer? Dude, I am constantly surprised by what offers on-market get accepted and rejected. Like the ones I'm like, oh, I just made such a strong offer. They're like, oh no, that's rejection. Then sometimes you throw one in, you're like, they're never going to take this. And they're like, it's yours. It's just, it's super surprising.
37:02 Henry Washington? 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 because they're so worried about offending someone or that it's so far below retail value. Or their personal agent talks them out of making the offer.
37:16 Dave Meyer? That's what I was gonna say. You gotta 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.
37:38 Henry Washington? Absolutely.
37:39 Dave Meyer? I think for me, the thing I've tried to convey in the last few years is like, I'm gonna close. That's like the, you know, you talked about your credibility packet. Like the thing I want the seller to understand, which you can't say to them directly, which is annoying. But like through your offer, the thing I am trying to say is like, this guy is serious. He's bought real estate for a long time. He's not gonna nickel and dime you on the inspection. He's not gonna 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 is 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.
38:20 Dave Meyer? 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 gonna be done and paid for. I'm gonna 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.
38:38 Henry Washington? The other part of negotiation with these on-market deals, you gotta understand what you can do personally. What are your strengths, right? If you've got cash that you can put down and you're so confident, like 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. Cause that speaks volumes with non-refundable deposit. Cause that says this guy's gonna close. He's not just gonna put up 10 grand and not close the deal. Which is different than earnest money, because 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. You're concerned about your payment and you don't have a ton of cash, then you can maybe pay more
39:18 Henry Washington? or pay the asking price, but you can get them to buy down your rate with some of those dollars, right? 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 the price you wanted, but you got the payment you wanted.
39:37 Dave Meyer? 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.
39:48 Henry Washington? Yep.
39:48 Dave Meyer? They're building, let's just call it a hundred properties in the same area. So if they lower the price for you, they're going to have to lower the price for everyone, right? But no one knows if they pay down your mortgage rate, you know, 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? Like 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. Like 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.
40:29 Henry Washington? 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.
40:44 Dave Meyer? They're keeping their comps.
40:45 Henry Washington? Yep.
40:46 Dave Meyer? All right. 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?
40:58 Henry Washington? First and foremost, like, uh, use your powers for good. 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 a seller who had no idea what they were doing. And I could have easily taken advantage of them. And so A, 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, if 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, right? What you can bring to the table.
41:39 Henry Washington? Because if you know what you have, like if you've got cash, if you've got time, if you've got resources, you know, lending connections, whatever it is that you can throw something into your negotiation that may benefit the seller, that doesn't affect the price, 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. It was a single elderly woman and I said, hey, here's, 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?
42:21 Henry Washington? I knew that that was something of value to her because 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.
42:33 Dave Meyer? 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 like bravado. They're like, I gotta be tough, I gotta go into this and be like, I got this number and I'm sticking to it. Whereas every success 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 put framing yourself as the person who can solve that solution best. That's how you win. It has to be mutually benefit. You can't see this as 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.
43:18 Henry Washington? Absolutely.
43:19 Dave Meyer? All right, 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 BPCon today. Thanks again, man, for being here.
43:41 Henry Washington? Thank you for having me.
43:42 Dave Meyer? See y'all next time for another episode of the BiggerPockets Podcast in just a couple of days.
43:48 Speaker 04 When you shop Kroger Delivery, you can expect the savings you love and fresh groceries delivered right to your door. From delicious produce to everyday essentials, enjoy the convenience of delivery and the trusted selection you've come to know from Kroger. Because bringing you fresh, quality groceries is what we do best. Right now, enjoy free delivery on orders of $50 or more with your digital coupon. Restrictions apply. See site for details. Kroger. Fresh for everyone.
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