7 Negotiating Tips

I love the challenge of getting a great deal. The secret is making the deal just as good for the other people involved. I will go over seven powerful negotiating tips that you will find very useful in your real estate deals.

Tip #1: Let the Other Party Speak First

Never make the first offer…let the other party do it.

Two reasons why you should do this...

1. When the other party states their position first, you have the ability to define the mid-point of the negotiation! The person who states the first position is at a disadvantage to the person who waits, as the person who waits can define the mid-point.

2. It’s possible that the other party’s first offer will be better than the first offer you would make. By stating your position first, you’ve given away valuable information to the other party, you maximum price.

Tip #2: Stop Talking and Start Listening

When negotiating is important to keep your mouth shut and listen to the other person. People are naturally uncomfortable during a negotiating silence and the common result of this uncomfortable situation is that one party will make a concession to break the awkward silence. Make the other person break the silence.

Tip #3: Information is Power

The negotiator with the most information will walk away with the better outcome. When negotiating, it’s important to know as much as possible, not just about the object of the negotiation, but also about the party you’re negotiating with and their motives. It is more important to solve a problem than to offer the most money. Gather some information from the seller before making an offer.

Tip #4: Always Get the Last Concession

Always make sure you ask for and get the last concession, which is something the other party gives in a negotiation for example a price drop, better terms, etc. By getting the final concession the other party wants/needs from the negotiation.

For example, when negotiating with a contractor, let’s say that he throws out a final price that you both agree on. Say, “I agree with that price, if you can start first thing tomorrow morning.”

Tip #5: Implement a Penalty for Asking for Concessions

Have you been on the phone with customer services and you find that every time you ask for something the rep puts you on hold for 10 minutes. They do this because they realize you are less likely to ask again because you may have to wit 10 more minutes for a response. Making them wait is a great example of a penalty. You may say, “I’ll have to think about that, I’ll give you a call tomorrow and we can discuss further.”

Tip #6: Friction is Your Friend

There needs to be enough friction in the negotiation to make both parties feel like they earned a great deal. Make them work hard to get to a common agreement.

Tip #7: Check Your Ego at the Door

Sincere flattery will go a long way in getting you a better negotiating outcome. It will allow the other party to put their defenses down and they will feel obligated to return the favor.