Pamela Vasiliu
Sales Representative
pvasiliu@remax.net

RE/MAX Professionals Inc.
Brokerage
Independently owned and operated.

Date: Tuesday November the 21st, 2017 
416-236-1241

 

   

How to Negoitate

August 20, 2014 - Updated: August 20, 2014

Whether it's buying a house, disputing your cell phone bill, scoring more frequent flier miles, haggling in China, or paying off your credit card, the basic principles of negotiation are the same. Just remember that even the most skilled and experienced negotiators will feel discomfort when negotiating. The only difference is a skilled negotiator has learned to recognize, and suppress the outward signs of these feelings.

Decide on your break-even point. In financial terms, this is the lowest amount or cheapest price you will accept in the deal. In non-financial terms, this is the "worst-case scenario" you are willing to accept before walking away from the negotiating table. Not knowing your break-even point can leave you accepting a deal that is not in your best interest.

If you are representing someone else in a negotiation, get your client's agreement for a target deal in writing beforehand. Otherwise, when you negotiate deal, and they decide that they don't like it after all, your credibility is the one that takes the hit. Proper preparation can avoid this from happening.

  • A hostage negotiator, for example, isn't offering anything special, and needs the hostages more than the abductor needs the hostages. For this reason, being a hostage negotiator is very hard. In order to compensate for these deficiencies, the negotiator must be good at making small concessions seem big, and turn emotional promises into valuable weapons.
  • A rare gem vendor, on the other hand, has something that is rarely found in the world. She doesn't need a particular person's money — only the highest amount of money, if she's a good negotiator — but people want her particular gem. This puts her in excellent position to extract extra value from the people she's negotiating with.

Know what you're worth. Is what you're offering hard to come by, or is it a dime a dozen? If what you have is rare or noteworthy, you have the better bargaining position. How much does the other party need you? If they need you more than you need them, you have the better position, and can afford to ask for more. If, however, you need them more than they need you, how can you give yourself an edge?

Never feel rushed. Don't underestimate your ability to negotiate for what you want by simply outlasting someone else. If you have patience, use it. If you lack patience, gain it. What often happens in negotiations is that people get tired and accept a position that they wouldn't ordinarily accept because they're tired of negotiating. If you can outlast someone by staying at the table longer, chances are you'll get more of what you want.

  • If you're negotiating someone else's life, your proposals need to be reasonable right off the bat; you don't want to risk someone's life. The downside of starting off aggressive is just too much.
  • If, however, you're negotiating your starting salary, it pays to start off asking for more than you expect to get. If the employer agrees, you've gotten more than you asked for; if the employer negotiates you down to a lower salary, you're heightening the impression that you're being "bled," thereby increasing your chances of securing a better final salary.Be ready to walk away. You know what your break-even point is, and you know if that's not what you're getting. Be willing to walk out the door if that's the case. You might find that the other party will call you back, but you should feel happy with your efforts if they don't.

Plan how you will structure your proposals. Your proposals are what you offer to the other person. A negotiation is a series of exchanges, where one person offers a proposal and the other person counter-proposes. The structure of your proposals can spell success or lead to disaster.

Depending on the situation, open extreme. Open at your maximum sustainable position (the most you can logically argue for). Ask for what you want, and then some. Starting high is important because you'll most likely be negotiated to a lower level. If your opening offer is too close to your breakpoint, then you will not have enough bargaining range to concede to the other party as a way of giving satisfaction.

Don't be scared to make an outrageous request. You never know — you might get it! And what's the worst that could happen? They might think you're vain, or delusional; but they'll also know you have guts, and you value yourself, your time, and your money.

  • Are you worried about insulting them, especially if making a very low offer to buy something? Remember that this is business, and if they don't like your offer, they can always counter-offer. Be bold. If you don't take advantage of them, remember that they'll take advantage of you. The act of negotiation is mutually and beneficially taking advantage of each other.

Shop around, and bring proof. If you are buying a car and you know the other dealer will sell you the same car for $200 less, tell them so. Tell them the name of the dealer and salesman. If you're negotiating a salary and you've researched how much people in equivalent positions get paid in your area, print out those statistics and have them handy. The threat of losing business or opportunity, even if it's not a serious one, can make people compromise.

Use silence. When the other party makes a proposal, don't reply immediately. Instead use your body language to indicate that you're not satisfied. This will make the other person feel uncomfortable and insecure and often force them to come up with a better offer to fill the silence.

Offer to pay up front. An up-front payment is always desirable to a seller, especially in situations where most people do not pay up front (we're looking at you, car dealerships). As the buyer, you can also offer to buy in bulk, paying in advance for a certain number of products or services, in exchange for a discount.

One tactic is to come into the negotiation with a pre-written check; ask to buy the product or service for that amount, and tell them that's your final offer. They may accept it, since the lure of an immediate payment is hard to resist.

Finally, paying in cash rather than with a check or credit card can be a useful negotiation tool because it reduces risk to the seller (e.g. check bouncing, credit card declined).

Never give away without getting something in return. If you give something away "for free," you're implicitly telling the other person that you think your bargaining position is weak. Smart bargainers will smell blood and swarm you like sharks in water.

 


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