Amidst the many aspects of real estate investing, it’s easy to overlook one of the most important and most overlooked factors in your ultimate success: the negotiation process. The negotiation can make you good or bad, as it will set in stone the terms under which you will purchase the investment property, as well as the financing and cash outlay that you will need to make.

Negotiation is an art. It’s one of those skills you can work on all your life and never perfect. Beginning and novice real estate investors can often be at a disadvantage if they are placed in a negotiation with a stronger negotiator. For that reason, it’s critical that you become aware of the biggest negotiating mistakes made in real estate investing.

1) You are in a hurry

Maybe you’re eager to close the deal fast so you can start watching your profits grow. Maybe your real estate agent is pressuring you to buy so they can collect a commission. Perhaps the other party is trying to create a false sense of urgency to get a better deal! Whatever the reason… pull over and slow down. Any deal you have to decide ‘now now now’ is in all likelihood a deal you should walk away from. If you’re in a hurry, you’re likely cutting corners in your due diligence and ‘setting up’ with terms you wouldn’t normally prefer. One of the main goals of a salesperson is to create a sense of urgency. Your duty as a buyer is to dispel the urgency.

But what if deep down you’re worried about missing out on the deal? So watch out for mistake #2…

2) You “fell in love”: you are not ready to leave the deal

You want that property. You can visualize yourself as an owner, with the profits rolling in. There is no way you can afford to lose the deal.

Congratulations, you are no longer an investor. Now you are a ‘Brand’, you are an accident waiting to happen.

Fall in love with your partner, your children, a work of art. Never fall in love with business or investments. It’s all about the money. Once you “fall in love”, it is no longer about the money, which puts you at a clear disadvantage if you are dealing with someone who has their minds set on investing. You must always be willing to walk away from the deal. If you’re not willing to leave, at least hold your wallet with both hands!

Of course, this is not to say that negotiating means that you will always clean house. You also need to have one foot firmly planted in reality. And that brings us to mistake #3…

3) You haven’t done your homework

Think of buying investment property like buying a business. The ‘business’ is more than the building or the land on which it sits. You also need to worry about a) the market for what you’re selling, b) the past history of that business, c) the neighborhood where your business is located, d) the financing you’ll need and its costs to you… The list goes on. .

Most important of all, you have to have a handle on numbers. You need to be comfortable with the property’s cash flow, you need to have some reasonable estimates of its future value, and you need to know what the risks are. If you are comfortable with all these things, you can make an informed decision about the value of the property. Congratulations… now you know exactly how much you should be willing to pay. Above that price, see point #2 and walk away.

Doing your homework is not fun. It may take some time and you may need to do some research. But you skip it at your own risk!