Become A Master Negotiator

One of our teammates is in the market to buy a condominium. It wasn’t that long ago that it was darn near impossible to even give away a piece of real estate. On the street where I live, there’s a house that’s in foreclosure that has been on the market for close to three years. But, in some sections of the real estate market, like condominiums, the market has done a 180 and sellers are now receiving multiple offers at prices significantly higher than their asking price.

Let’s switch examples. You’re applying for an internal promotion in your company. The job has been posted both externally and internally in the company. Someone in HR has let you know they have received over 200 resumes and two other internal candidates besides yourself have applied for the job.

In both of these examples, the odds looked stacked against you. Let’s take a look at the options that may help bring you closer to a win-win outcome, or at least not leave you as the loser in a lose-win outcome.

Gain inside information: In the promotion example, if you really want the job, then you need to set a meeting up with the person who’s actually hiring for the position. Tell the manager that you aren’t even sure if the job is a fit but if he/she could meet with you for a brief 15 minutes, you could both decide if you should put in an application. In the real estate example, if the home is tenant occupied, you could stop by the house the evening before making an offer and ask if you could take a 5 minute tour to confirm that you want to move forward. Real estate agents hate this recommendation but, after buying multiple homes in my life, I’ve always been successful when I’ve been able to figure out the owner’s needs first-hand. Many times, the information the seller has shared with me has been the exact opposite of what my own agent had shared. While you think that your needs are identical with your agent, unless you have a long-term relationship with your agent, this may not be the case.

Determine your counterpart’s true implicit needs: Although we tend to look at most negotiations as being focused on price and money, there are many other types of needs that may be driving the behaviors of your counterpart. Is the buyer qualified to buy this home at the price they’re proposing? Is the buyer’s qualification verified? How quickly can the sale be completed? Will the new buyer make a good neighbor to the seller’s friends? Does the seller have the need to close the deal and then rent the home back until he can find another place to live? In a short sale or a deal where there is little equity, at what point will the seller have to add cash into the deal to make it work? If they want out of the home bad enough, how much are they willing to drop the price? In the employer example, does the boss already have someone in mind they want to offer the job to? Do they feel a need to hire someone from inside the company or are they committed to finding the best qualified candidate?

Do your own research: For whatever reason, people who feel they lack power and clout tend to do less research to validate what’s known and what’s shared by their counterparts. In the promotion example, talk to others in the department to find out what type of boss you’ll be working for. You can also talk directly to the boss to find out what type of work will be done and what the expectations are for the job. In the real estate example, besides generating comps to support the price you are thinking about offering, talk to owners and renters in the complex or people living in the neighborhood. Knock on a few doors and you may even find an owner willing to sell their unit without a real estate agent and split the savings with you.

Walk away: In the above real estate example, one thing that we learned in the last real estate bubble is the people who bought last in the cycle, and participated in a multiple offer/bidding situation, had the most to lose when the market turned. Although the same may not be as applicable today because we’re at the beginning of a new real estate cycle, you don’t want to be negotiating against yourself. That’s exactly what will happen if you agree when your agent tells you that the seller has multiple offers and that you better increase your offer significantly if you want the house. Only when you are willing to walk away do you regain or maintain your power. Why is walking away in your best interests? Because there’s a good chance you’ll find another house to purchase, most likely, without multiple bids. In the world of negotiation, some of your very best deals in life will be the ones you decided to pass on.

When you’re in the middle of a negotiation in which you hold little clout or power, you tend to give up deal points you wouldn’t normally in an effort to make the deal work. When the counterpart senses that you lack power, the natural tendency is for the counterpart to raise their goals and ask for more. They know that if you really want the prize, you’ll be willing to cave in and give them what they’re asking for.

So what do you do? You accomplish your goals. If your need to gain something is strong enough, and you’re willing to do whatever it takes to accomplish your goal, you will be successful. Don’t sweat the small stuff in small negotiations. When the size of the negotiation could have a significant impact on your financial well-being in the future, I recommend following the above four points. I believe that patience, most often, will help you to drive a better win-win negotiation. A great line to remember is, “I want this, but under these conditions or terms, I don’t want it that much.” And, after you’ve applied the recommendations of gaining inside information, determining your counterpart’s implicit needs, validating the facts and determining your willingness to walk away… if the deal is still so good you have to have it… GO FOR IT!

Emotions such as anger, fear, or not feeling valued have caused many negotiations to escalate out of control and have destroyed relationships. However, when channeled positively, emotions are a good thing. For example, empathy can help promote understanding and facilitate communication so that both counterparts can achieve their goals. Good or bad, emotions make us human and define who we are.

Anais Nin said, “We don’t see things as they are, we see things as we are.” The challenge with negative emotions such as anger, fear, and not feeling valued is that they divert our focus from the broader goals (i.e. what really matters) towards things which may or may not be important to the outcome of the negotiation. For example, let’s say your counterpart threatens you with a lawsuit if they can’t get their way. Most likely, this comment will trigger both anger and a lack of trust toward your counterpart. Regardless of whether the counterpart files a lawsuit or calls you a derogatory name, you will make better decisions if you keep your negative emotions in check and focus on your most important goals.

When you don’t trust your counterpart or are uncertain about the outcome of a negotiation, you might become preoccupied with negative thoughts about them or ruminate over potential bad outcomes. This preoccupation leads to fear. It’s important to know that in order to eliminate fear, you must eliminate this preoccupation and become totally engaged and focused on the preparation you have completed prior to the negotiation and the strategy you are executing to accomplish your goal.

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Last week, a participant in one of our seminars sent us a question regarding the negotiation of a raise. When we talked with the participant, they stated that s/he had wanted to ask for a raise for over two years, but had been afraid to meet with their boss and hold the discussion regarding wages.

Fear about negotiating something as important as your job or how much money you make is normal. In fact, we tend to find that the more important something is to a person, the more emotions are involved in the negotiation. When emotion is involved, the emotion is usually fear. Other common reasons people may fear negotiation include:

• Concern with how your counterpart will see you: In the above example, the employees may have been worried that their boss would see them as being greedy or ungrateful because they asked for a raise. Those thoughts had an impact on how they felt about approaching their boss and discussing salary.

• Lack of knowledge about the process or individual: If your goal is to buy a house, and this is your first home purchase, when the real estate agent tells you she has made a previous offer to this homeowner and she is quite certain that your offer of 30 percent below the seller’s asking price will infuriate him, it could make you fearful of moving forward with the offer.

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Former President Bill Clinton famously told us, “I feel your pain.” I am unsure if he truly had empathy for those who were listening and if he really felt our pain, but I do know that to be an effective negotiator, once must learn to show empathy.

Empathy is defined as “the intellectual identification with or vicarious experiencing of the feelings,
thoughts, or attitudes of another.” In a negotiation, empathy is an important asset because it allows both counterparts to see the other’s perspective and conduct the negotiation in a way that is beneficial to both parties.

Another benefit of empathy lies in the fact that if you properly construct your reflective response, your counterpart’s natural reaction will be to provide more explanation and information. You will find the following tips helpful in learning to be more empathetic.

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Have you ever negotiated with someone that sits across the table from you, never changes their expression and doesn’t say one word? There is nothing more intimidating than to realize that you’re doing all the talking in this negotiation and your counterpart is just staring at you. When you do ask them a question, they usually just lean back, put their hands behind their head and say something profound like, “Yep” or “Nope.” Participants ask, “Do you have any suggestions for dealing with this silent treatment?” Yes, we do. We have three.

Tip number one: When you do open your mouth to speak, always ask open-ended questions. Why is this so important? When in the presence of a silent intimidator, you’re almost always becoming very nervous, and when you do become nervous, you tend to ask closed-ended questions such as, “Do you like this product?” or “Have you used this product before?” Then the silent negotiator looks at you and says, “Yep.” “Nope.” You’re better off to ask open-ended questions, questions that begin with who, what, where, when, how and why that force your counterpart to talk.

Tip number two: Exhibit positive, non-verbal communication. When you’re nervous, you usually lack confidence. And when you lack confidence, you tend to lean away from your counterpart. We encourage you to lean forward. Have your arms open, your hands open, your face tilted towards the counterpart, and almost like you’re leaning in to get closer to them, excited by what they are about to say. This exhibits confidence and confidence works well in negotiation.

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