Powerful Negotiations - Check Your Ego at the Door (CYE)

Welcome Back to Powerful Homes Housing Literacy - the Mindset and Tactics to empower your dreams through real eWelcome Back to Powerful Homes Housing Literacy- the Mindset and Tactics to empower your dreams through Real Estate. At a very basic level, every business has elements of persuasion and negotiations…and real estate is no different. In fact, it is one of my favorite parts of the business but an aspect that makes many others uncomfortable since it has high levels of uncertainty combined with very high stakes.

There are many theories about how to negotiate. Some say never to split the difference. Others believe you need to meet others where they are at and give them exactly what they need. There are countless approaches that may work in certain situations and in difference contexts but not many that work in every situation, every time.

The Powerful Homes approach to negotiating any part of the business: buying / selling / vendor contracts / inspections all have the same approach: a growth mindset focused on building trust and a long-term relationship.

Why? Many would say that it does not make sense to build for a future when there is only THIS transaction? In the world today, I believe this is a big mistake for two reasons: the first is that everything we do can be instantly broadcasted on 100s of platforms in seconds. The bigger reason is that in any flash moment it IS POSSIBLE to build a lifelong relationship if we come out it with the right mindset.

A very common acronym that we’ve heard many times is CYA: a short phrase that means we should cover our butts at all costs. In the old economy that was not global and interconnected…that may have made some sense. Look at for #1 and see how things shake out in the future way down the road.

In the world today, every interaction we have with others is an opportunity to build a bond and create a long-term relationship. We will explore how this can happen with three key concepts with a new acronym: CYE Check your Ego (at the door).

As always, feel free to reach out to Matt directly with any questions - 303-885-1644

Episode Transcript:

Welcome to the Housing Literacy Podcast with host Matt Guarino, founder of Powerful Homes. That's mission is to empower dreams through home ownership. We're here to help. We're going to do this together and now Matt Guarino.

Hey guys, my name is Matt Guarino and I'm the founder of Powerful Homes. Our vision is to empower dreams through real estate. And our mission is to help at least 10,000 people in the next 10 years purchase their very first home or first investment property, because we believe that everyone should have the opportunity to do that regardless of their age, race, education level, or any of the other ways our systems may block them out of doing that. And how do we do that? So what we teach here at Powerful Homes is that there's a certain mindset and there's a certain set of proven values based tactics that if you combine them, create a thing called housing literacy. Just a basic understanding of what housing in your home can do for you financially, as well as create a stability in your life and a foundation for your life that increases your net worth. It can create the resources to empower your dreams. And it gives you that confidence in the context of the things that I've learned the last 25 years buying and selling real estate all over the country.

So one of the things I'd love to put out there, if this is your first time here, this is a judgment free zone. There's no judgment whatsoever. We're not trying to sell you on anything. We're not trying to push any agendas or political religious agendas, anything like that. We're just trying to put out some value for you, the people listening to this so that you can make some great judgments about buying a home, buying an investment property, or even selling a home or an investment property. So we're also very clear that this is not the only way to do this. There's lots of ways to create great foundations in your life, through stocks, bonds starting your own business, starting or investing in businesses. So this isn't the end all be all. It's just one way. And so, with all that said, take or leave whatever works for you. But we're so glad to here. If this is your first time welcome. If you've been here before, welcome back.

So excited about the topic today. We're talking about powerful negotiations and just love this topic. It gets my heart pounding. I love to negotiate. But our approach to this at Powerful Homes is a little different, it's to check your ego at the door. It's C-Y-E check your ego at the door. So, you know, at a very basic level, I think every business medicine, law, accounting, real estate, teaching even, any profession has at its core some level of persuasion and negotiations and real estate is no different. In fact, it's one of favorite parts of the business, but it is an aspect that can make people nervous and uncomfortable because there's so much uncertainty combined with very high stakes. And again, that's in every business, the negotiating part can be a big winner or loser in the moment. So I love it though. I just love negotiating. But there's so many theories about negotiating.

There are so many books about this, some people say, always split the difference, meet the people in the middle. Some people say never split the difference. I saw a podcast one time with a hostage negotiator talking about a way to do it is to kind of mirror the people that you're talking to and give them whatever they want, kind of embody what they want. So there's so many different things and ways to negotiate, but really there's not one that works in every situation. And when we talk about the Powerful Homes way to powerful negotiations, what we're talking about is to create a growth mindset that builds trust and creates a long-term idea, long-term relationship to create a winning outcome. And there's so many places you negotiate in real estate, you negotiate when you're negotiating the initial contract. You negotiate when you buy it, when you sell it. You negotiate vendor contracts with your contractors, when you're going through different phases of the contract, there's the inspection and you negotiate the title policy things in there. There's even the appraisal. So there's so many different things an our whole idea is to think about it as a long-term relationship with a growth mindset.

Why do we say that? Why do I talk about it that way? Isn't real estate inherently, just a transaction where a lot of people like it for that reason. And why would I try to create a long-term relationship with a seller or a buyer that I'm only going to deal with one time? I would say that that's the crucial moment. One of the biggest points of this, in the world today for the obvious reason not to do that, is that we're in a fully integrated world that in one cell phone picture or video of you, that can be posted online at your worst moment or not negotiating in a positive way. It can be on hundreds of platforms. That's the obvious one, but I would say on a less punitive perspective, one way, one reason to negotiate in a powerful way, using the Powerful Homes approach, which we'll talk about is that I believe that it is possible to create a lifelong relationship in a flash moment, during a hard negotiation. With the right mindset, you can create a client for life. You can create a strong relationship for life that can go in so many different directions. So I'm very optimistic that that could happen.

So back to the thing, we're talking about, check your ego at the door CYE. So we've all heard of CYA, right? Which is a, it's an acronym to cover your butts at all times, at all costs, right? That's in the old economy, the old way business was done, not global or interconnected. I think that makes some sense that you may never see somebody again, or they may never know how to find you look out for number one and see how things shake out in the future. That's kind of the idea, but I think in the world today, every interaction we have with others is an opportunity to build a bond and create a long-term relationship. So we're going to explore how this can happen with three key concepts with this acronym, CYE, check your ego at the door.

And as we always talk about it, kind of a governing principle or a quote for this segment, it's in the form of a question. So let's think of it this way; do I want to be right and win, or do I want to be happy and have peace with myself? So you want to be right and win this thing no matter what, or you want to be happy? It really comes down to a choice like that. But it also comes down to deciding upfront, how are you going to behave before it happens? That's another Powerful Homes saying. So we talk about our program being a values based paradigm shift. It's a values based set of mindsets and tactics. So when we're negotiating and doing anything in business, any moment of business at Powerful Homes, we always think about what is our kind of personal set of values and what is our business set of values.

So if you've read my book, Powerful Homes, I talk about a personal life vision, which for me, I envision a world where people have the courage to passionate live every moment of their life with their faith leading the way. A world where people treat each other like cherished family for the benefit of growth and long-term sustainability. That's a lot of words in there, break that down to say, it's courage, faith, family, for the benefit of growth and sustainability. And when I say faith, it's whatever that means to you, whatever your code is for living. To passionately and courageously show up and live your biggest values. We also overlay onto a way to think about how we're going to negotiate in any situation with our business values. And at Powerful Homes our business values are very simple; be bold, keep it real, bring the fun.

So you can see how those two sets of, my personal life, which is courage, faith, family, and then boldness, keeping it real and bringing the fun, those kinds of work together. So that's how I approach negotiating. That's how I approach anything in my business life. So let's jump in. So we're going to use as a governing principle, do I want to be right or I want to be happy? So the C in CYE, check your ego at the door is to consider the story that you want to tell in the future. In any of these negotiating moments, there's always two things going on. There's a moment of what you're negotiating that could be a vendor contract. It could be the original contract to buy, it could be the original contract when you're a seller. But so you're considering, do I want to go up or down in price; 10,000 or 20,000? I want to consider other terms.

So there's that stuff going on, but there's also the Cs, consider a year down the road, three years down the road, five years down the road. How am I going to tell this story? Well, how did I handle that moment? So both are very important because you want to do well in the moment. But what I would think about is how our core values and principles would handle that. So let's give a specific thing. The real estate industry does get a bad rap because people can have some sharp elbows in this moment. So I've seen it play out in so many ways. So, you know, people, these days are putting offers 5,000 thousand dollars high, and they know that they're going to come back and try to get concessions. That's kind of a sharp elbowed way. I'm not a big fan of that.

Some people don't disclose material facts or non-disclosure of things that are important on a contract and some people just beat people up with mistakes that are made throughout a transaction. So if I give you a specific thing, so part of this thing, we talk about the Powerful Homes is we have the mindset and a set of tactics and the way for you to have to understand what tactics are, I'd like to share some anecdotes that have happened to me. So one of the ones to consider the story, you're going to tell them the future and how are you going to negotiate. I was buying a property and the guy never disclose, and it didn't come up in title that he had had a 20 year fight with his neighbor at a boundary dispute with a neighbor. And there was a technicality in the title policy that they didn't have to disclose it to me, interesting.

So later on, when I was about to sell the property, it basically came up that the neighbor said he owned these 10 feet and he could put a fence in front of my garage door and he didn't want me to sell the property. Insane kind of thing, to even comprehend. I'm about to sell it, going into contract. I bought it, fixed it up and was going to flip it. And now I have a fence put up by the neighbor. So that's a very interesting moment. So, what story did I want to tell, consider the story you want to tell in the future. I basically negotiated, I could have sued the guy for non-material nondisclosure, but I had to negotiate with this neighbor about this fence he'd put in front of my garage. Can't even make this stuff up? It happened to me.

So basically I wanted to tell the right story. So I got through it with that neighbor. He took down his fence. So I was able to sell the property. Here's the crazy thing, a year later that person, I ended up trading a property with the person. I ended up buying it from. He had a flood in a basement that I sold to him, had nothing to do with anything I did. How ironic. He didn't disclose something to me later on wants to come back at me and said, I did something wrong? Check your ego at the door, consider the story you want to tell in the future. I basically fixed something I didn't have to fix because I wanted to do the right thing. Again, it's a negotiation of a difficult matter. I'm proud of how I told that story. It cost me a few thousand dollars. These are the, this is a powerful way to negotiate. Always leading with your values, always leading with the first principle of the consider the story you want to tell, do the right thing.

So the second one in the CYE would be, your perspective will change, but your values don't have to. Your perspectives will change, but your values don't have to. What do I mean with that? So within each transaction in real estate, and at any moment, time, one part of the other could be vulnerable because of a misunderstanding of something that you couldn't have seen coming. In addition, things change in different seasons of your life. As you get older, when looking back on it you might see things in a different light.

Finally, you, you never know how relationships change in a flash because of the dynamics we live in. Things can change with your relationship with people you're dealing with, for all those reasons, your perspectives can change during the transaction, right? And so for you to be hard line and trying to win in the beginning, here's a perfect example of it. You could think you put it under contract and then you're going through the inspection and they come back at you with something you never knew, but because you negotiated so intensely on the original contract price, you put a sour taste in everybody's mouth. They're going to now beat you up perspective, perspectives change, going back and forth. So to beat somebody up at any moment in the transaction, I don't believe is the right thing to do. There was an issue. I had a duplex in Denver where I sold the property. And six months later, because of some weird way the roof was put in, it was a flat roof and the way the shade was coming on the roof, when the ice was on it, snow was on it. And the way my contractor incorrectly put the roof on it was dripping, it was causing condensation in the ceiling. It's a difficult moment in a real estate transaction. My contractor didn't have the subcontractors insurance in place. He never got it. So basically I could have sued him and taken him down a bad road instead, what did I do? We kind of negotiated through that. I, I paid for the materials to redo it and fix this really kind of science thing that was going on with the roof that nobody could see coming. And he did labor.

So think about that. Think about the first one is considered the story you want to tell. I wanted to have a good relationship with him going forward. I negotiated with him and I would do this and he would do that and we'd resolve the matter, which we did. So your perspectives change, you're vulnerable, they're vulnerable. To deal with it, using your values, leading the ways I think the way to go.

So finally, the last thing in the CYE versus CYA is that everything can be resolved in a way that honors everyone. Everything can be resolved in a way that honors everyone. This is not a soft idea. It's a very serious business concept that we truly rise by lifting others. We rise by lifting others. I've seen it countless times that if you're only transactional, you want to just win this moment, this $500 or this thousand dollars; you could, but you could be vulnerable in a way that honors everyone. We are not our problems. This problem, isn't who I am. It's just something I have to deal with. Maybe I created it because of an oversight, but it isn't my identity and it's not the other person's identity. It's just a moment. I think if you can both look at the problem together and solve it you can come up with new, better creative ideas to resolve it.

Here's the thing that's fascinating about negotiating is that sellers, so often when I've bought properties over the years, I've bought hundreds and hundreds of properties. Sellers their most important issue is rarely price. So often they wonder how are you going to deal with them or some other thing in the transaction that they want. That's more important than price. So you can, if you knew that going in, that everything can be resolved in a way that honors everyone giving them things that they want, that aren't just price and going the extra mile in contracts.

I had a situation where I bought a property in it's in chapter seven of my book, where the folks left a bunch of very expensive million equipment that nobody knew was under all the stuff in the garage. I could have just kept it and sold it, but I realized that that was kind of like heirloom from the grandfather of the family. I ended up giving it back to the folks and they could liquidate it and use it to pay for the kids' college education. I didn't have to negotiate it like that. I'm not trying to be a hero saying I did it perfectly, but I realized that that act mattered so much and honored that family that sold it to me and didn't know it was there. That captured all three of these, the story I wanted to tell my perspectives one day would change that I would be paying for my kids' college and that heirloom equipment would've come in handy, that everything could be resolved in a way that honors everyone. So using the Powerful Homes idea of negotiating a values based approach, deciding what your values are and how you're going to handle the things up front, we can turn a CYA into a CYE by checking our ego at the door.

So the final thing I want to leave you with is that every impossible problem that we have in real estate is just a decision waiting to be made and the decision to live your life based on your values in every negotiation you find yourself in, maybe the moment that everything shifts in the most positive way. So I'm glad you're here and as always at the end of these discussions I have, I'll give you my cell phone (303) 885-1644. If you have any questions about this, love for you to subscribe to our channel, and if you have any questions or comments, just text me or send me an email at www.powerfulhomes.org and find my email address. And also we have a bunch of resources at the end of this discussion and that hopes you will hope you'll use to create some powerful negotiations. See you next time.

Thank you for listening to another episode of the housing literacy podcast. Don't forget to like comment and hit that subscribe button and stay connected with Matt Guarino by visiting www.powerfulhomes.org.

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