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Negotiating Contingencies
Many people fancy themselves
as negotiating dynamos. “I can sell an
ice box to an Eskimo,” they’ll say. Well,
outdated ethnic aphorisms aside, many people go about the negotiating process
all wrong.
First of all they see it as
a zero sum game. That is to say that if
one party manages to win then the other party loses. Secondly, people feel they need to be tough and ‘not give an
inch’. This too is a fallacy.
Then you are negotiating the
contingencies in a contract for your new home, try and keep the following in
mind. Chances are you’ll get a better
deal on your home, and you won’t have to resort to being a jerk.
The Six Steps Success
Negotiating is a process not an event. It will
take place over time, and over time peoples moods and attitudes
change. Be prepared to take your
time and make sure that everything is done right. Don’t just make a decision to keep
things moving. If you do, they
will keep moving in the wrong direction.
You’ve heard the expression: “I lost the battle,
but won the war.” This describes negotiating. You may concede and concede and concede, but through this
giving of an inch, you’ll be able to take a mile. With that said, do not be
subservient. Know the power that
you have. If you had nothing to
offer, changes are they wouldn’t be talking to you. Make sure this comes through in your
tone of voice and your body language.
Information is power. This is especially true in home negotiations. Research the history of the home and
the property. Know what the seller
does for a living as well. If you
can surprise them with information they didn’t think you knew, they will
automatically assume that you know other things and you just haven’t let
on yet.
Come up with a best case and worse case
scenario. Know hoe much you are willing to concede and make sure you do
not go below that point. Also,
having a best case scenario gives you something to shoot for and prevents
you from blowing the whole deal by getting greedy.
Elaboration is also a great tool. Don’t just tell them what you want,
explain to them what will happen if you don’t get it. Paint a picture.
Know the rule of reciprocity. If you concede a point, you should get
something of equal value in return.
Don’t be shy to remind them that you made a concession. The seller may have gotten got up in
what they though was good luck.
It’s also harder to say no to a request if they have just been
granted one.
Win-Win Negotiations
Nobody
wants to walk away from a negotiating table feeling like they were
hustled. It’s not good business and
it’s just not good human behavior to swindle someone. Obviously then, both sides should come out of the negotiation
with a feeling that they got what they wanted, and believe it or not this is
possible.
While
the above six steps are the blueprint for negotiations in general. The five steps below are a kindler gentler
more civilized approach to negotiations that is sure to put you on a path to
getting what you want. Of course if the
person you are negotiating with is wicked, there isn’t much you can do.
Get to know
the other side before you begin the negotiation. Talk with them over food or drinks and engage in small
talk. Know who they are and how
they respond to things before you start making demands.
Share your
objectives. Listen to what they
want and tell them what you want.
This way both sides will have a better idea of when a compromise
can be reached. If you have no
idea what the other side wants you won’t know when to give-up and when to
press on.
Prioritize
your concerns. Let the seller know
what concerns are the most important.
If you give each concern equal weight, the seller will feel like
they are up against an immovable wall of pettiness.
Expect that
the negotiations will evolve. You
need to be able to adapt to changing circumstances over the course of the
negotiations.
Be sure to
keep everything in writing. If
there is a disagreement you could spend hours debate who said what. If it is all on paper, you’ll be able
to settle the issue quickly and painlessly. Remember you are striving for a win-win negotiation.
Strategy
Beyond
these simple tips there are larger negotiation strategies that are used by
everyone from politicians to car mechanics.
They should give you an idea of how to act and reacted in a general
way. Of course not every strategy works
for every person so you’ll need to score a balance between your talents and the
abilities and character of whom you are negotiating with.
Fait Accompli
While not conducive to the win-win strategy, it
may just work if the person you are negotiating with is desperate to
sell. Essential with this strategy
is that you make no concessions and not budge and inch. It is intimidating enough to
occasionally work.
Standard Practice
If you have done your homework you can try and
use this one. It basically works
if you claim that what you are suggesting id ‘just how things are normally
done’. If you are dealing with a
neophyte this might work, but if you come up against an expert you will
just anger them.
Deadline
Setting a deadline is a great way to make sure
that the other party doesn’t monkey around. They will be unlikely to try and wear you down if they no
you will walk aay at a certain time.
It also often leads to a last second mad dash. If you are crafty you can make this
scramble for in your favor.
Decoy
The other side is bound to try and leverage what
they know is important against you.
That’s why you make smaller things seem bigger and vice versa. For instance, if a new roof is a big
deal, and new deck is not, claim that the deck is a deal breaker. When you finally concede at the last
minute, they’ll be thankful they only had to offer a new roof.
Withdrawal
This one is easy enough to understand. Simply claim that you will walk away if
you do not get your way on a certain point. This strategy is very risky (and very childish). It should never be used in conjunction
with the decoy strategy.
Good cop/Bad cop
This works well with a husband and wife
team. One spouse can be very set
on the home, giving the seller hope, while the other can be unsure, thus
eliciting compromise. This strategy
also sets the tone of compromise, which is where you’ll need to be
throughout the negotiation phase.
Limit Authority
This also works with the husband and wife
team. Make sure that only one of
you shows up for the negotiation, then claim that you can’t make certain
concessions without your partner.
Salami Technique
Don’t try to steal the whole thing at once. Slowly whittle away at the seller until
you have gotten what you need. If
they only make small concessions over time, they won’t feel like they were
swindled.
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