Monthly Archives: February 2019

The Casual Notice Guide to Negotiation

I’ve been told that I’m a good negotiator. I wouldn’t know; I’ve never had to negotiate with myself. I do know that at one time, I was a bad negotiator, but have learned many of the things I was doing wrong, and I’m more than happy to share my experience, because a world that negotiates better is a world that runs more smoothly.

But why should you want to be good at negotiating? I mean, I get that you’re doing fine paying MSRP for whatever you buy, and “haggling” seems so…flea market. That’s what they want you to think. I don’t know who “they” are. I assume there’s some shadow cadre of real estate agents, auto dealerships, and furniture stores that have a vested interest in keeping you ignorant of good negotiation. So, yeah, stick it to them.

Or, face the fact that nearly every interaction you have after small-talk openers is a negotiation of some kind. Every topic from what to watch on TV to how many Hail Marys you’ll say if you find your keys boils down to a simple business concept: two people each have something the other wants, even if that something is a utility player to be named later. You need to negotiate well, because negotiating badly is how you end up alone and poor.

Negotiation is not war

No matter what those mid-eighties business guides that essentially plagiarized The Art of War tell you, negotiation is not war, and going into a room thinking it is will only generate casualties, and you will be one of them. In the ideal negotiation, both parties walk away thinking they’ve had one over on the other. Most come out with both sides feeling okay (but not ecstatic) with how it came out. In the worst ones, one or both parties feels ripped off. We want to get as close as we can to ideal while avoiding the worst like the plague.

The thing is, if you walk into the room ready for war, you immediately put your counterpart on the defensive. They’ll be less likely to make concessions and more likely to make unreasonable demands. Always remember that you have common ground: you each have something the other wants, and it behooves you both to make the trade cleanly and fairly.

It also helps to remember that nothing happens in a vacuum. If you walk away from the table leaving Marcy with five Skittles for her entire bag of m&ms, what are you going to do next week when she has Reese’s cups and all you have are Necco Nickels? A more friendly, cooperative strategy of negotiation helps in improving relations for later trades.

Do your homework

The best way to get the best deal is to know what the best deal really is. If you’re looking for a new car, research what cars in your class usually go for in your area. What’s the value drop between a new and late-model used car of that class? What amenities do you have to have, and what can you expect to pay for them? What sort of warranties are available?

You should also research your own situation. What’s the absolute most you are able to pay? What’s your ideal? What amenities can you live without? Would something smaller or less tricked-out be better if it fits more neatly into your financial situation?

Keep what you’ve learned in mind when you walk in. Doing so will not only help you keep your goals consistent, but will also give you insight into what your counterpart is doing. Knowing, even sympathizing with your counterpart’s position can only help, because the more open you are, the more they want to be open to you. He wants you commission, but he also wants your commission next year when you buy a junker for your teenager, and the year after that when your husband is looking for his car. Even if you don’t expect him to be around, later, develop a relationship as if you did.

Have benchmarks

Every negotiation is a dance between three points on each side. You should know and remember what these points are. If you walk in to negotiate and don’t have wiggle room, then you’re not negotiating. You’re laying down an ultimatum, and no one wants that.

So what are these points? Well the first one, the very top, is What you want. That is to say, what is the ideal outcome for you. Be realistic. You’re not going to get two acres of prime downtown real estate for 85 cents and a half-eaten chicken leg. It goes back to doing your homework, because your first offer should be what you want, and if it isn’t realistic, then you’re just being insulting. Try to stay in a range of plus or minus 20% of fair market value.

The next point is what you’d like. This is your most realistic expectation for how the negotiation will come out. If you’ve done your research, then any good compromise will get you pretty close to this benchmark.

The final benchmark is what you will accept. This is the worst deal you can make without feeling resentful. Again, be realistic, but mostly be realistic on your own behalf. If that plot of land bottoms out at 10 million, will you be able to make that money back? What further investment needs to go into the property before it can be developed? Can you afford it? Do you want to? Your point of acceptance should leave you in a position to make use of what you have without hardship and really should leave you a fair few steps above hardship.

Have options

During your research, you will undoubtedly come across things that are close to what you want. Keep these in mind, maybe even make some inroads into those items. It’s important to always know that you have options and what those options are. You’ll be more confident walking in if you don’t believe that your life depends on the outcome of the negotiation.

Don’t be afraid to walk away

You have options and you know what they are; you also know what the absolute minimum you will accept will be. What do you do if your counterpart isn’t willing to come up to your bottom? You walk away. 10 million is fair, but if your counterpart can’t make it construction ready by closing then it’s not fair enough. 65 thousand is too much, especially since you told them you don’t want (or need) the undercoat, since you live in the south and are unlikely to encounter heavily-salted winter roads. At some point, you have to recognize that the deal will not happen.

When you have to walk away, don’t be mad about it. The whole point of walking away is to ensure that no one feels hard done by. Thank your counterpart for their time and express your regret that a deal couldn’t be reached. Remember, this negotiation may not have gone as you hoped, but there will almost certainly be others. No matter how gratifying it might be to slam the papers and make gratuitous remarks about scheisters, a hanshake and a regretful shrug will do everyone more good in the long run.