Psychology In The Cash Flow Notes Business

Negotiating With The Note Seller

Marketing will be and should be the largest aspect of your cash flow notes business once you become a note broker and is the engine that keeps your business going. However, once you find a note that is marketable the negotiations begin. Negotiations are just one step in the process of closing the note transaction. To be successful it is essential that you be prepared to negotiate with the note seller.

Once the negotiation process begins many enter with a static idea of what the outcome will be and this is the only acceptable result. This is a fundamental mistake since the end result of any negotiation should be a equally satisfactory commitment to the note sale agreement by both you and the seller. Never enter into a note negotiation without considering what you want as the broker, three possible outcomes - the best outcome and what you would ultimately want, the realistic end result for both parties and the ultimate bottom line which is anything less would be unacceptable.

You as the professional note broker in the cash flow business should always be prepared before beginning note negotiations. Be thoroughly prepared with important facts and of course the numbers. Being prepared not only confirms you as a professional but having them written down can help you illustrate your point and aid in the negotiation process.
Professionalism is of utmost importance. Note sellers are generally under pressure from forces outside the negotiations with you. They obviously are either needing cash or have some other issue they are dealing with or they wouldn’t be selling their note in the first place.

Always be polite and keep the discussions on the business at hand. We are all human and humans are blessed with emotions which help us relate to each other. However, keeping your emotions under control and avoid any indications of irritation or frustration with the note seller. These emotions will only cause the note seller to withdraw and become more rigid. Always have a positive attitude and keep the negotiations flowing smoothly. If a brick wall is reached, try to find another route to move toward a solution to the objection raised.

Remember the three possible outcomes mentioned above? Be willing to compromise and have them ready to offer in relation to compromise offered by the note seller. Demonstration that you are willing to compromise allows the cash note seller to you are willing to reach an agreement satisfactory to both parties. Learn the to listen. Let the note seller do most of the talking during negotiations and keep mental notes to access and utilize when you do speak.

Always let them make the first offer. Find out why they have chosen to sell their note. Ask them point blank what they believe to be a fair price for the note. Do they need to sell the entire note or part of the note. These are important questions you can ask that can give you clues as to what the notes seller’s ultimate outcome may be. Once you have this information, you have a point at which you can begin negotiating price. Never offer a price first or you may end up shorting yourself of money you could have made. Until you ask, you have no idea what the note seller wants for his cash note.

The cash flow notes business can be lucrative. Professionalism, preparedness and learning the art of negotiation is what determines success once you have located a marketable cash flow note. Although most of your time as a note broker will be spent marketing, it is important you hone your skills a negotiator.