Negotiations is one of my favorite topics and with the moderator’s blessing I wanted to start a thread specifically on different ideas and tactics, and add to the list over time. I’m told this is the most appropriate forum to post in for this!
Verbal Judo and How to Master Negotiations
You can’t learn negotiation tactics from a book. Find someone who is good, observe them and model what they do, how they talk, what they say (and don’t say). Ask them questions.
Use the power of silence. People will rush to fill it. Let THEM feel the unease of silence.
Knowing when to go on the attack (“offensive”) is easy-- always.
Learning how to feign retreat on an issue or point (only to attack a different way) is essential to verbal judo success.
Always be more prepared than the guy sitting across from you.
Watch “Two for the Money”, “Thank you for Smoking”, “Thirteen Days” (Costner), “Thomas Crown Affair” (Brosnan), “The Devil’s Advocate” (Pacino), “The Negotiator”, and believe it or not “Pretty Woman”. While there’s some questionable morality in some of these movies, there are nuggets of negotiation wisdom in each that if applied can make you millions— without compromising your morals.
Learn how to argue instead of negotiate when appropriate
One who would master negotiations must understand that a raised voice commands respect only when it is genuine
The most powerful word you’ll ever need to counter an offer you don’t like: “WHAAAT?!?” A real verbal judo black-belt uses tone of voice as much or more than words to communicate.
Remember- you don’t get what you deserve, you get what you can negotiate. Using these negotiation tactics can help us get what we know we deserve. All of it.
Remember “if you don’t ask, you don’t get”. Always ask.
Ask questions. Ask questions. Ask questions. Questions are the blows of verbal judo. Ask, ask, ask. Just don’t ask me why!
Practice negotiation as much as possible. At the hotel. In line at the coffee shop. On the airline ticket counter. On the golf course. In the farmer’s market. With your spouse. In front of the judge. With your kids, etc
Remember, the buyer is in control (Unless you are the seller). Who is in control? You are. Have that attitude. Feel it in your gut: “I am in control”.
Read Robert Cialdini’s “Influence: Science and Practice”— it will blow your mind if you’re not familiar with some of these principles.
That’s a starter I guess. I’m hopintg the notification reply feature this forum has will prompt me in the future to post more and keep this list going, plus invite others who might want to add theirs…
I thought "The Secrets of Power Negotiating" by Roger Dawson was amazing. You can get the cd version and listen in your car.
I enjoyed his audio cd version also. I almost always ask “is that the best you can do?” with every deal, even with my desperate sellers. However, while I think it’s a good idea to have some basic negotiating tools, you can’t negotiate a retail deal down to a wholesale deal (in the VAST majority of cases). Therefore, it is still necessary to find desperate sellers if you are going to succeed. Once you find desperate sellers, it doesn’t take any negotiations - desperate sellers will take just about any deal you offer. Their only consideration is stopping the pain.
Here’s what 20 years of investing has taught me about negotiating…
NEVER offer anything FIRST. Always ask the seller How much do you want? This may be THE most important thing you can ever learn. I can’t tell you how many times I’ve been called on a property and thought if I can score this home for XX I’m golden, only to find out the seller will take far less.
A deal gets done when BOTH parties feel as though they come away with something. Even if you steal a property, as long as the seller feels they are getting something of value out of it…you have a deal.
Don’t be a pig. If it’s a steal BUY IT. Don’t screw around.
I negotiate my deals from a TIME value. I tell sellers…" Here’s the sales agreement, no inspections, no BANKS, no WARRANTY, pick up your money at my attorneys in 5 days! Please sign here_________________________. You can be done with this in 5 days!!
NEVER forget the power of the WALK AWAY. Many people call me with houses that are over priced. I still go look at them. After I see the home I make them a CASH offer, no inspections, no banks, NO BS, pick up your money next week. "Here’s my offer $XX,XXX… Remember…the money is sitting in the bank RIGHT NOW!!! Call me when you want to pick it up!!! THAT is the ALL TIME KILLER walk away. It leaves everything else in the dust. The next person they call for that house who doesn’t offer those terms looks like a waste of their time.
NEVER go against your gut…If something is telling you it doesn’t look or feel right…WALK AWAY!!! Unfortunately this is usually learned from experience ONLY.
Always know more then the seller. If you can estimate repair costs ACCURATELY, use that. But do it tactfully…you NEVER want to insult someone because negotiations are OVER if you do.
Soft selling is KING!!! I play Mr. Nice Guy. Show up on time in a used Ford Ranger, Jeans and a nice shirt, always polite, always listening. By listening you can recognize small things that the owner may drop during a walk through. I’ve had people who were worried about their cats getting homes if they sold the house. JUMP ON THAT STUFF, it’s GOLD. I’ll call a local NO KILL shelter and arrange pick up for those animals and even make a donation on the sellers behalf. It may sound stupid but let me tell you. If it comes down to me and Vinny Boom Bots getting that house, Vinny is SOL (Sh*t outta luck)
I had a guy with an antique car in his back yard he REALLY wanted to keep. NO PROBLEM Sir, I know a nice little self storage warehouse (Mine) that will let you keep it there, I’ll pay the rent up front for 1 year and I’ll even pay for a flat bed to come and pick it up! That simple gesture, which cost me all of $900, got me a home I made $75,000 on!!! Even though that man sold his house for penny’s on the dollar he FELT like he got a good deal and was happy with it. And…he still has that car at my self storage…2 years later, never misses a payment!!
Read “How to Win Friends and Influence People” it has taught me more about negotiating than ANY book I have ever read. The truely BEST way to negotiate anything is without it seeming like a negotiation!
A good example is I won at auction a piece of industrial equipment. My bid was $11k, but the Seller had a $15k reserve. I went ahead and paid it on the spot. While some people might want to haggle over over a couple thousands bucks. I took the deal and less than sixty days later I had a check for $53k in my hands after I resold the equipment. :bobble
Interesting. Especially the differences between hiscompany’s “power” negotiation techniques and fdjake’s more…let’s call it “smooth” technique.
I’m curious, hiscompany. Are these simply ideas culled from various reading or a plan that you follow?
While several are good points, I tend to disagree with any of the ‘power’ points.
It’s NOT always good to be on the attack. It’s rarely ever a good move to raise your voice and it’s NEVER a good tactic to argue. From experience, the first person to lose their cool in negotiations will lose. I know that from sitting on both sides of that coin. And if you think that you “argue” or “raise your voice” without losing it, even a little, then you’re just kidding yourself.
Remember, we’re talking about negotiations here, not some boardroom power control meeting. Specifically, we’re talking about real estate transactions, and as jake said, both parties have to be satisified with the outcome. Gurus call it WIN-WIN, which is really a crock, but even the “loser” has to feel that they have accomplished at least a portion of their goal.
As to the “can you do better” theory, I can’t tell you how many times I’ve beat out those players who scribe to that. While they’re still arguing with the seller that has already lowered a $100K prop down to $30K, investors like me simply swoop in and offer $35K and laugh all the way to the bank.
Some people lose sight of why their in a negotiation in the first place, it’s to get a deal done. Using Rogers $5000 example, HE gets the deal DONE while his competition is still negotiating. What’s $5000 on a home he can net tens of thousands on?
A good tactic to use is called “Go to the Balcony”…Periodically during negotiations you want to “go to the balcony” and see who is winning and where things are headed, etc. “Go to the Balcony” means to project yourself to the corner of the room and look over the negotiations between yourself and your counterpart, as if you were in a balcony watching over the proceedings. Also, if you have more than yourself during negotiations you should have a clue that means shut up and let me talk. Maybe 2 coughs, clicking a pen, clearing your voice, etc. You don’t want someone tagging along ruining your deal.
Excellent post, thanks for sharing fdjake. The world needs more of people who know what they’re talking about AND are willing to share what works for THEM…
There’s 9 more solid techniques and stratgeies…let’s call that #'s 20-28
That was just a a few of the many great negotiation techniques myself or others on our team have learned and observed, as well as used and had used on us. The fact of the matter is two fold, Roger J-- We all learn by observing (and negotiations is no different)-- using what others have done to us if we take the time to reflect and reconstruct what happened during any given negotiation session and why something was more influential than something else (even what others did/said TO us).
Secondly, we absolutely learn by reading. Personally, like I said I read everything on negotiation I can get my hands on. Does that make me a great negotiator? Nope, it makes me one who has the ability to be prepared. You still have to be prepared and you still have to APPLY what you know! Honestly, I think most of us are born with GREAT negotiation skills (though primitive!), i.e. we know what we want and how to get it. And we use it until we do. That leads me to…
Remember how babies and children get what they want and use that mindset as appropriate WHEN appropriate.
Here’s another
Use what negotiation tactics people use on you to get better. For instance, I hated when this happened: “At this time we have decided to disengage from any further negotiations with you on this deal”-
Which reminds me…
After a long negotiation if and when you push too hard and they come back with “At this time we have decided to disengage from any further negotiations with you on this deal”…I learned the hard way that you can ONLY regain the upper hand if you don’t respond at all. At ALL. Don’t do it. Put the phone down. Don’t hit send on that email. Give the stamps a break. Wait. Just let it simmer.
Unless they read this post they won’t no how to deal with it. If they need the deal as much or more than you do, they will acquiesce and come back to the table willing to give you more.
If they didn’t or don’t need the deal/transaction as much as or more than you do, why waste your time?
When it comes to “being on attack” I’ll concede the verbiage is one of warfare. What I mean is that one should always push for what one wants/needs…NO ONE is going to do it for you. I can’t help it I’m a military history buff and love movies like Troy, 300 etc so using words like that is part of who I am.
I thought each of those I prefaced with “as appropriate” or similar. I hear you, though…let’s drill down to brass tacks…
Rarely is it advisable, agreed, as far as raising your voice / showing anger yet I have participated in two negotiations that I do not believe would have resulted in a successful conclusion without it. Which leads me to maybe what I should have said?..
If you’re going to “Storm out of the room” do it in a controlled manner. Don’t actually be mad. If you’re mad you’ve lost control. Don’t lose control, just let them know that something was so unacceptable you would rather be gone than consider it. (this is another application in my opinion of fdjake’s “Walk-Away”…sometimes it’s being willing to walk sometimes it’s doing it as I’ve both done and observed)
I guess it depends on how much you know about who you’re negotiating with…what about this?
Know the personality types you’re negotiating with, and how and why they are most influenced (positively towards you) or negatively (away from you) and use that knowledge to your advantage.
Also, remember the Cold War? It’s certainly not real-estate related but so much of what we do as investors and entrepreneurs who use negotiation to create value / derive value from the marketplace and/or a single transaction can be learned and/or used in almost ANY arena (and vice versa)…even the U.N.
What about this?
If you slam a shoe down on the table, make sure you’re still wearing two shoes (or it will looked contrived).
Yes, that’s a famous negotiation tip and one many will remember being used by the Soviet leader Kruschev on the world stage…was he really angry? Does that have any use in a kitchen table motivated seller negotiation… probably NOT!
In fact, in my experience fdjake’s MR NICE GUY is the way to go in these scenarios…and I’d bet there are many more experienced investors than me in that particular niche who post to this forum…I only did that until I could afford to do what I really wanted to do.
BUT are there business and REI scenarios in which it is USEFUL (i.e. can advance the negotiation) to show anger? Yep.
So lets put this even though it’s a little “common”…
Emphasize the use of the negotiation tstrategies proven to work in the forum you’re negotiating in…
And as far as arguing (when appropriate!), I have to disagree on your “NEVER” Roger J.
Permit me a second to explain, will you?
Think of this example of mine: if I’m negotiating with a developer to buy 24 units and I start an unrelated argument with him because I know the kind of person he is (machismo) that he will be flush with pride to win an ARGUMENT…is it a bad thing that his “win” allowed me to push through several incentives I might not have been able to had he been paying more attention to what mattered to his employer (profit) than what I knew he was influenced by most (the respect of his peers winning an argument about soccer against the ‘outsider’)?
That’s an excellent point! Let’s call that 37.
and then 38 from the other post: Be prepared when necessary to pay more than you intended (but still get a deal) rather than haggle and risk losing a moneymaker entirely.-- to paraphrase aak5454
And definitely #39 that’s a great point from jdbaldwin: if you have more than yourself during negotiations you should have a clue that means shut up and let me talk. Maybe 2 coughs, clicking a pen, clearing your voice, etc. You don’t want someone tagging along ruining your deal. [end quote]
That makes me think of a couple times! Hm…
Don’t try to be someone you’re not. There are different negotiation styles. Find yours by trial and error. Not all of these negotiation tips will be best for you. Some are me, others are not, find what works for you.
Team up with someone who complements your negotiating style; they call it good cop bad cop for a reason. Two good cops don’t push hard enough and two bad cops push too hard. Let’s remember Goldilocks HAHA
Let’s finish off with one I think everyone can agree on, can you not?
Wow! I don’t think I can remember all those negotiation tricks. I guess I never realized how trough this real estate business was. All this time, I thought all that was necessary was to find a DESPERATE seller and buy their property at a BIG discount. If a seller played all these silly games with me, I wouldn’t say anything; trade any negotiating barbs; get out my negotiating book and study harder; or try master negotiating tip number 326 - I would just move on to the next deal!
If they didn’t or don’t need the deal/transaction as much as or more than you do, why waste your time?–> I think that one’s covered fairly well, but I for one appreciate your humor.
Fact of the matter is, one CAN profit in this business and know very little. Like you said, sometimes it can be best (even in negotiations) to
Practice K.I.S.S.: Keep it Simple Stupid- Why Complicate Negotiations Unless You Must?
But that’s hardly ALWAYS the case, even in the lesser-per-transaction niches of REI IMO
I used to sell cars and the rule was, make the offer and wait. The next person that speaks loses. And this does work, I have sat in an office for 5 minutes waiting for the person to speak, and they always do, except one. They got up and left… I was floored!!! I ran after them, got them back in the office. And they did the same tactic again, this time I let them go. BUT they came back later and eventually bought the car from me.
That rule is soooo true, after the offer is made the next person that speaks loses…
In my opinion the Car Business is the greatest Real Estate training school in the world.
I (still) own, and at one time ran, a successful used car dealership. I learned more in that business than in ANYTHING I have ever been involved with. I had to FIND the cars, get the cars fixed and cleaned, advertise those cars, and close the sales. SOUND FAMILIAR? It’s the real estate business on a smaller scale. I learned… negotiations, how to EFFECTIVELY advertise and WHERE, how to build a team of people who can FIX things for you QUICKLY and inexpensively, and how to FIND cars people wanted to sell CHEAP and FAST!!! But most importantly…
How vital it is to have a car (or house) READY to sell. It’s always AMAZED me how lazy people are. I can’t tell you how many times I had a really nice, Honda or Toyota that just needed CLEANING!! I would offer to sell it for $500 under just so I didn’t have to spend the time moving it to the detail shop. ONLY one person ever took that deal. I would offer someone the lower price, and the same nit wit who passed on it would come back the NEXT DAY and buy the SAME CAR (now clean) for $500 more and never even realize he was buying the car I offered to him the day before at $500 off.
It’s the same game with houses. I’m continually amazed at how just paint and carpet will move a home even if you’ve offered it to someone at a discount greater than the cost of those items.
nothing more powerful.