Cinventure - For the Cincinnati Entrepreneur

Whether you’re sitting across from the other party in a fancy boardroom or standing on a gravel parking lot haggling with a used car salesman, there are some basic principles or strategies that will help you during the actual negotiation.

Be direct.  Don’t hint around at what you want or what you have to offer.  Make express affirmative statements that show you are standing firm in your position.  Statements that start with “well,…” or “what I was thinking…” and so forth will leave the other party with the impression that you are doubting the strength of your position. 

Instead, use phrases that emphasize your belief in your position; for example: “Here is what I am prepared to offer.” or “This is what I am capable of doing.”  Following those statements give your proposition, then stop and listen.  Make eye contact and examine the other party’s reaction.  Being straightforward also prevents you from giving away more information than the other side needs to know, which leads into our next point.

Don’t tell the other side more than they ask for or more than they need to know.  If they ask something that could weaken your position, just work around the question with something like, “that’s not what’s important here” or “let’s try to stay on task and see if we can reach an agreement.” 

In the above two strategies some may think you risk coming across as being too rigid.  Certainly you can take anything to an extreme, such as combining the above direct authoritative statements with the use of a harsh tone, gestures (such as aggressively pointing or pounding your fist on the table), or by just being rude (interrupting someone is one of the fastest ways to send a negotiation process into a tailspin). 

Being direct while still being professional and calm is actually more respectful as you spend more time listening and only stating the relevant facts to your side.  You essentially take the emotions out of the deal.  The emotions are what usually kill a deal or cause someone to give away too much and “lose the deal.”  Remember that saying from my friend, the car salesman, “a good deal is a state of mind.”  If you lose your cool and end up paying more for something than you originally wanted, this could cause you to feel buyer’s remorse or that you were cheated.

Don’t respond too quickly to the other side’s proposal.  Shooting from the hip or responding off the cuff makes you look anxious and likely to forget something you wanted to add or even confuse you about where the offer currently stands relative to where you want to be.  The easiest way to slow things down is to write them down.  As the other person is talking, jot down some of their points, especially the points that you wish to challenge. 

If the other party is handing you something in writing while you verbally discuss the deal, go through the document and circle things or write notes in the margin.  As a courtesy ask the other party if you can make notes on the document.  If the document was intended to be the final draft of your deal you wouldn’t want your personal notes about the “airhead” sitting across from you to show up in the margins!

Don’t go backwards in the negotiation.  Once a particular part of the deal is done, move on and focus on the remaining details.  Don’t let the other party try to make changes to the portion of the deal that’s already been done.  If the other side tries to change something that’s already been agreed upon, reply back with “we already agreed on x number of units, we now need to determine when they will be delivered and who is responsible for insuring the shipment.”  

Reminding the other party of the remaining concerns helps keep the negotiations moving forward rather than continually going over the same parts that were already discussed.  These kinds of statements should be reserved for when the other party is trying to go back and change things.  You shouldn’t continually say what is left for negotiation as you make progress.  No one likes a narrator during negotiations.  Rather, this type of response is exclusively used when the other party is backtracking.

Stick to your walk away price and terms.  Car salespeople are excellent at getting people to come up higher than where they want to be.  If someone says $19,000 is the most they want to pay for a car you can almost bet the salesman is trying for $19,500.  Usually they will do something with the financing like saying, well it’s only an extra $26 per month on the payments and then describe all the nice features on the car again. 

The bottom line is that your walk away price should be just that.  John F. Kennedy once said, “We cannot negotiate with those who say ‘What’s mine is mine and what’s yours is negotiable.’”  If the other party won’t come to terms with you and you’re at the walk away price, it’s time to walk away.

Now it’s time to hear from you.  Regardless whether your negotiation experience was buying a car or a multi million-dollar acquisition, we would like to hear your thoughts on what you do during the actual negotiation.  Feel free to leave comments and feedback to this article as you see fit.

Thomas Goodwin is an Ohio licensed real estate agent (Realtor) and insurance agent.  He is the Founder and CEO of Northern Pine Properties, Inc., a real estate investment, development, and management company in Cincinnati, Ohio.

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