Hey Awesomely reader! Patrick Riddle here with some powerful, actionable thoughts.
So, I like to share info about negotiating awesomely and some of the ideas that have served me well… including this gem I learned over a decade ago about getting the “up-front contract.”
I learned it originally from David Sandler. And, I first discovered its power when using it to negotiate with private lenders and build those relationships back in the day.
So, I’m sharing an example of how this looks when having conversations with potential private lenders — but, this tactic could be used in any type of negotiation… like with sellers, for example. It’s an interchangeable tool in your negotiating toolbelt.
What is an Up Front ContracT?
An up-front contract is an agreement that is structured with someone BEFORE taking them through your sales process. (Hence, up-front.) As I mentioned, it’s a technique developed by David Sandler that’s extremely powerful.
Use an up-front contract… and you’ll be playing by your rules, not theirs!
So, the following script will show you how to effectively set up an up-front contract. This example is for when you’re meeting with a private money prospect, but like I said, you can rework it a bit when negotiating with a seller, too.
Have a looksie…
Me: Thank you so much for meeting with me today. How much time did you see us spending together today?
Private Money Investor: Well, I don’t know. How long do these meetings usually last?
Me: We can be done and have all your questions answered within an hour. So, it’s 3:15pm now. Let’s imagine that it’s 4:15pm, you’re walking out of here thinking that it was a great meeting and really worth your time. What would we have to cover for that to happen?
Private Money Investor: Well, I guess you would go over A, B and C.
Me: Naturally, you’ve got questions about A, B and C. A lot of people have similar questions. I’ll make sure to go over all of that. Obviously, I’ve got some questions too… D, E and F. Are you OK if we go over those questions today?
Private Money Investor: Sure.
Me: Typically, there are several different outcomes that could come out of our conversation. If at any point, I figure out that we’re not a fit, do you mind if I go ahead and tell you?
Private Money Investor: No, not at all.
Me: Good, I appreciate that. Now, if you figure out that we are not a fit, will you tell me?
Private Money Investor: Sure.
Me: Thank you. I appreciate that. A lot of people aren’t comfortable saying “No,” and my biggest fear is people saying things like “Call me next week” or “Let me think it over” when they really just mean “I’m not interested.”
On the other hand, we may find that we are a fit and that it makes sense to work together. Now, we’re not even close to that yet, but if we were to get there, what would you see us doing next?
Private Money Investor: I’m not sure.
Me: Well, the next step would be to write us a check to get started investing with us. Anything less than that, I’ll just take as a “No.” Are you OK with that?
Private Money Investor: That sounds good.
Me: Great. Out of the things you mentioned earlier — A, B and C — which one would you like to go over first?
And that’s it.
An up-front contract has been established:
- I showed appreciation for the appointment in the first place…
- Quantified the time we would spend together…
- Don’t you hate appointments that drag on and on and on to no apparent end?!
- Discussed what questions would be covered during the appointment.
- Established an agreement so that by the end, I get a clear “Yes” or “No” to my offer.
- “Let me think it overs” will drain the life out of you! Handle that objection before it comes up!
And by the way…
DON’T try to reinvent the script!
Just memorize exactly what it says, and you will improve your closing ratio by 1,000,000%.
Have at it!