The Basics of Negotiating
22 August 2006Business Week has a good article that hits all the basic points needed to turn someone from a complete novice to at least a decent negotiator. It’s suprisingly uncommon as a skill these days - and if you think you’re not good at negotiation, you need to read up. You might think, “Well, why would I need to do THAT? Everything’s priced anyway.” That’s the wrong attitude - because learning to negotiate can save you a ton of money on virtually any big purchase, and because even generic stores with prices on everything will often be willing to give you a deal if you’re buying a lot. So what are some of the better tips?
Instead of melting under “deal heat,” remember that the power is in your hands. “Don’t be afraid to say no,” says Columbia (S.C.) financial advisor Charles Flowers. No matter how much time you’ve spent with a real estate agent or a car dealer, you can always walk away.
This is probably most important - the guy you’re talking to right now is not your only option. If you want to try to lowball your offer on a car, and they say no, fine. Go try every other dealer in town - and if one says yes, you just saved a ton of money. If they all say no, start over with a higher offer. Same principle applies to virtually everything you could be buying.
Everyone has a different perception of what represents a reasonable value. Don’t be afraid to ask for something the other person might consider overly aggressive, because you just might get it. “I’m constantly amazed,” Blackstone’s Greenthal says. “You never know what somebody will give you.”
I’m often surprised by this as well. If the other side really wants a deal - they may give into a request you thought was ridiculous. And for the young people with that tag-along who wants you to buy the biggest car or best house:
Unlike corporate dealmakers, young people frequently bring a best friend or a significant other along with them when they’re making a big purchase. This poses a potential problem: One person’s unrestrained enthusiasm could offset the other’s savvy negotiating.
Agreeing on a designated negotiator can avoid arguments later. “You really should decide who’s going to negotiate, and the other person should shut up,” Marlin says. “Even better than shutting up, they should go away. You can’t have two people negotiate.”
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