Author: Chris Kraft

Borrowed vs tax refund vs saved

If you are planning on selling anything in the next few months you’ll run into these three categories of buyers.

Borrowed is just referring to money that came to the buyer in the form of a loan or credit card.

Tax refund and saved money are self explanatory.

The other day my brother and sister in law were looking to buy a used car.  They popped into a few dealerships.  Dylan (my brother) said the prices on the used inventory was bloated.  When he talked to a few sales people, the sales person asked “are you financing or paying cash?”  They seem to be astounded when he said they would just be paying for the car in cash.

They then said, “well the cash price is lower than advertised.”  Dylan asked why.  They simply directed the conversation to reasons of it being tax refund season and almost everyone finances.

This is what I’ve noticed about selling to people and my personal spending habits.  When it feels like I haven’t worked for the money, in the form of a loan or refund, I and many others feel it easier to spend more money.  We tend to pay less attention to the details and final cost.

Now what does this mean to you?

It’s pretty simple.  As you sell right now you’ll notice people focusing less on negotiating the best possible deal.  In the case of tax refund money, even though it is the buyers money that they worked for there is some sort of magical feeling about it.  As if Santa lives in Washington and is just handing out cash gifts.

Remember that mower I sold?  Buyer used a credit card (borrowed money).  He didn’t even bother to talk about the price.  Just needed to swipe and was on his way.

Almost every single time I sell something with the buyer paying cash, he’ll want to pay less.  It’s real.  He worked for it.  It’s tangible.

Borrowed money = your item is worth more

Tax refund money = your item is worth as much as borrowed money

Cash=  your item is drastically worth less

So in summary, figure out a way to be able to take a card.  Use PayPal or Square or one of their competitors.  Always swipe if possible.  Manually entering cards can hold up your money in limbo.  Keep cash on hand, small bills and ways to make change.

Why is negotiation so scary?

I think that there are a few reasons why it can seem so scary.

  1. As a buyer or seller, we just don’t want to be cheated.
  2. We’ve all encountered slimy sales people.
  3. Late night infomercials about learning the tips and tricks to sales
  4. Insecurity.

If you follow my SnapChat daily then you’ve seen that i’m selling.  Generally it is cash in hand from local deals.  What you don’t get to see yet is the actual interaction between the buyer and myself.  I haven’t started posting the conversations we have though text that happen before the meet up.  There hasn’t been much emphasis on the how but rather just the finish.

So you’ve posted up something for sell.  Priced it well, or so you thought.  You’ve done a little research as to what similar items are listed for in your market and priced yours accordingly.

You meet with a buyer.  It’s a guy that has texted you back and forth about the item.  He pulls up in his truck.  Introductions. Then you show the item.  He pops off a number.

Now it is your turn.

Don’t get scared.  Don’t isolate yourself in your head, and don’t worry.

It’s time for the negotiation.  Remember, you know this guy wants what you’re selling.  He showed up, didn’t he?

Negotiation is process where the seller and buyer work to agree to a value that is agreeable to both parties.

Let the his offer soak in.  You’d be surprised how many people add to their first offer if you just contemplate for a few seconds.  He may want this item a lot more than you think his offer initially seemed.

Remember a successful negotiation is when both buyer and seller felt the amount of money transferred for an item was beneficial to both parties.  Meaning, everyone felt like they got a deal.

Reinforce the reasons why your item is priced accordingly.  Hold steady on your number.  Your buyer will throw another offer.  Now go back and forth until there is an agreeable figure.  Shake hands, trade cash for your item and thank your buyer.

Congratulations, you just did your first negotiation.

That wasn’t that scary was it?  Did you get scammed?  Not if you felt good about the deal.  The right thing to do at this point is to move to the next sale, or purchase.  Remembering how this deal went down.  The thing you don’t want to do is to go home and now look at all the finalized sales of the same item you just sold.  This can weaken the comfort level you had about the deal you just made.

Decision 3 in the “The 7 Decisions, understanding the keys to personal success” says

“I Am a Person of Action.”

Successful people make their decisions quickly and change their mind slowly. Failures make their decisions slowly and change their mind quickly. My decisions come quickly, and they lead to victory.

Quote by Andy Andrews