Why We Don’t Negotiate Real Estate Deals

Why We Don’t Negotiate Land and House Deals

Steven Jack Butala and Jill DeWit

Most people think real estate is a negotiating business. Send a lowball offer, get a call back, haggle, meet in the middle, shake hands. That is the picture in everyone’s head, and it is not how we buy property.

On a recent episode of the show, we dug into why. The short version: negotiating for the sake of negotiating is expensive, slow, and usually has nothing to do with the deal in front of you.

Negotiation Is Usually About Winning, Not About the Deal

Jack has never enjoyed negotiating anything. Jill enjoys it in the right setting, like buying silver in Mexico, where walking to the next stall is part of the fun.

But there is a version of negotiation that shows up constantly in real estate, and it is not fun and it is not productive. A buyer looks at a $500,000 house, the seller will not move, and the buyer walks away over $5,000. At that point common sense has left the room. The deal is no longer about the property. It is about winning.

Jill’s read on that behavior is blunt: when someone digs in that hard, they are trying to kill the deal. Consciously or not, they do not actually want it. And there is nothing wrong with that. If you dig in and lose the property, you probably did not want it badly enough in the first place.

The problem comes when you burn weeks of your life proving a point on a deal you were never committed to.

What “Never Split the Difference” Gets Right

We ran an AI summary of Chris Voss’s Never Split the Difference, widely treated as the modern bible of negotiation, and put the main ideas to Jill cold. She had no idea the questions were coming. Here is how she handled each one.

Tactical empathy. Showing you understand the other side even when you do not agree. Jill’s version: “I can’t imagine what that would feel like. Can you tell me more about that?”

Labeling emotions. Naming what the other person is feeling so the tension comes down. Jill’s version: “That must have been hard to hear. It’s hard for anyone to hear that their property is worth half what they thought.”

The accusation audit. Getting ahead of the negative assumptions the other side already has about you. Jill’s version: “You’re right, you don’t know me. How would you know me from anybody else? Let me tell you about me and my business, and please feel free to look me up.”

Calibrated questions. Open questions that let the other person arrive at the solution themselves. This one Jill does constantly, and it usually starts with four words: why are you selling? The answer is where the actual deal lives. “I lost my job, I can’t find anything here, so I’m packing up and going home.”

No oriented questions. Framing things so the other person can say no and feel in control, which makes a yes easier later. Jill’s version: “Gosh, if you called me about my house, I’d probably say the same thing.” You end up on the same side of the table, agreeing that some numbers do not make sense, which opens the door to the ones that do.

Bargaining for how. Moving off yes or no and onto how this could actually work. This is Jill’s default setting. You want to sell, I want to buy, we agree on that much, so how do we get there?

Jack would file all of that under one heading: establishing trust.

Where Everyone Gets Stuck: The Price

Here is the scenario we see over and over.

We mail an offer of $22,000. After some back and forth, the seller says $40,000 is the bottom number and will not move.

Most buyers respond by talking about the price. Jill does the opposite. She goes looking for what is really going on.

Why do you think it’s worth that? What’s happening in your world that you can’t come off that number? Tell me what’s going on here and maybe we can work something out another way.

Nine times out of ten an open question smokes it out. In this case: that is what the mortgage payoff is, and the seller needs out from under it. Now you know what you are solving for, and $40,000 stops being a random line in the sand.

Sometimes the answer is still no. The seller needs 40, you cannot pay 40, and that is the end of it. A hard no where you understand the reason is just as valuable as a yes. You get your time back.

But sometimes you can help solve the problem instead of arguing about the number. Jill will say: I can go to $30,000. Can you sell the car? Is there 401k money you can pull? Because 40 is not happening on this property from anyone, and certainly not this fast. You sell the car, I’ll buy the property, and you’re out of this jam by the end of the month. More than once, that is the call where the seller says: you know what, that would actually work.

Jack’s old approach, from back when he had Jill’s job, was different and simpler. Stay on the numbers. “I understand you need $40,000 to pay off the mortgage. I’m standing here with $22,000. That’s more than half, no bones about it, and it’s what the property is worth to me. We can close Thursday. Don’t answer now. Talk to your spouse. But Thursday you can have the money.”

Two very different styles. Both work. The point is to pick one and stick with it.

What We Do Instead: Put the Right Number in the Mail

Jack’s lack of interest in negotiating price is exactly why he built the mailer model in the 1990s.

Some investors send offers designed to start a fight. Any number will do, because the goal is just to trigger a call back so the negotiation can begin. That is not what we do, and it is not what the mailer is for. It is more work, and it produces worse deals.

It is also functionally the same as sending a neutral letter that says “I want to buy your property, call me.” Everybody calls. Every one of them is convinced you are the buyer who finally sees the beauty of that hill, and they want a million dollars for it.

Ranges are no better. If you send $2,000 to $20,000 and you mean two, the seller sees twenty. People always see the top number. So why send a range? Pick a number and work from there.

Here is what actually happens when you mail a real number to a lot of people. A predictable percentage of them are done. Today is the day your letter landed, and they are the person who would have handed the property to anybody offering more than five dollars. We have all been that person about something. They see $1,500 and their only thought is: do not say anything, just get it closed. He’s happy, I’m happy, move on.

That predictable percentage is the entire reason we mail the way we do.

Price Adjustment Is Not Negotiation

Then there is the next group. They did not love the $1,500, but they will do it for $2,000, because two gets them out of whatever this week’s jam is, or because two was the number they always had in their head. You take it, because the property is worth twenty.

That is a reasonable price adjustment. It is not a negotiation.

The same thing happens further up the price scale. Jill’s favorite response from a seller is some version of: you don’t really know this area, do you? She does not come back hard. She lets them feel like they are winning and in control, and she asks the most useful question in the business: what am I missing?

Then she goes and does the research. Sometimes they are right. Sometimes there is something about that parcel that changes the math, and a $2,000 offer becomes a $20,000 offer on a property worth $50,000 or $60,000. That deal still works beautifully. What never happens is paying retail. Pay retail and you are out of business.

The Takeaway

We are not anti negotiation. We are anti ego. Everything Jill does on the phone is aimed at understanding the seller’s real problem, because the real problem is where the deal is. Everything the mailer does is aimed at making sure the price conversation is mostly finished before the phone ever rings.

Send a real number. Ask why. Solve the problem behind the number. Adjust when you learn something new. Walk away cleanly when the math does not work.

You are not alone in your real estate ambition.