In my university negotiations class I was voted the most effective and the best prepared out of around 150 students during spring quarter.(I am not saying this to toot my own horn just to give a little credibility) The information and experience that I gleaned from the class was awesome. I had never been a negotiating type of person. I just shopped around until I found the right price then I bought. Persuasion and communication have always fascinated me, the art, the style, the technique, the power, when used for good of course. Every class period we were assigned a “role” and a position to “play” from. In reality the students had nothing to lose so they should have held their ground. I mean why not, it was just role playing. I held mine and made out like a bandit come voting time.
Being a real estate agent I work on my negotiating skills and use them often. But negotiating with other real estate agents can be just like class, easy. Sometimes they are so removed from the situation, or just want to earn their commission that they don’t hold their ground for their clients either. Now I wouldn’t recommend a home owner trying to negotiate the sale or purchase of their home either. Emotion and too much at stake can be such a deal killer. What you need is an agent that is willing to work for you, but that is not what we are going to talk about today.
There are three basic techniques of negotiation that I would like to explain: Puffery, the Hidden Table, and of course Silence. I recently sold an old car that we weren’t using anymore, private party, no agents acting for principles. Now there was some real negotiation.
Ah yes the sticker price. Most people think of negotiation as finding common ground, the middle between two points. This is often the case, so if you are going to sell something set the price high and the middle ground will be near what you actually what for the item, and hey who knows maybe you’ll make a little extra. So for the 1995 Infiniti J30 that blue books for 3200 and we wanted 3000. We started out at 4200. We placed ads on craigslist and Autotrader, the usual places to find buyers for a car. Nuthin, Nada, zilch, we received absolutely no response. It was awful, three weeks we waited. OK so we lowered the price to 3500. A few bites but when asked about the condition of the car, we lost ‘em. We weren’t out to trick anyone or misrepresent the car. It had some cosmetic issues, but ran great, what do you expect for a 12 year old car. OK so the sticker prices on most cars at the lot are high but the advertisements in the papers are for low prices. In today’s technology driven world we weren’t the only 12 year old car on craigslist. People weren’t calling because other cars were priced lower and why call on an over priced car when there are cheaper options available.
So we lowered the price to 3000 and Bam! My phone rang off the hook, people wanted this car. But of course the negotiations were just getting started. The first words out of most of the callers mouths was what is your bottom line, no really how much is the car, what is my price, how much for cash, like I would take anything else. My immediate response was
The Hidden Table
When you’re at a dealership and you make an offer to the salesperson, their response is “Let me check with my sales manager?” And of course your offer is a little low and they counter with a higher price. Now how come the sales manager is always somewhere else and never comes to talk with you? They are playing the hidden table; the salesperson is still your friend that has asked about your kids and what you do for fun on the weekends, while the absent manager is the one who wants more of the green in your wallet. In real estate negotiations I use the seller or buyer as it maybe.
For me it was my wife. I would say that it was my wife’s car and she needed to get 3000 for it. I couldn’t negotiate over the phone but if they wanted to come and test drive the car then we could talk. I would say that this weeded out half of the prospective buyers, but that saved me the time of showing the car to someone who wasn’t even slightly willing to pay 3000. The hidden table saved me time and kept the price firm at 3000, and I was still able to be a “nice guy” when talking on the phone.
I bet I showed the car to 5 or 6 different people. Here is where I used what can be the most effective negotiation technique ever realized.
Either used when making an offer or when answering an offer, silence can get you to where you want to go. After test driving the car a prospective buyer offered 2500 all he had to spend on a car. I deadpanned him. Nothing, not a word came out of my mouth. 10, 20, 30 seconds past and he said how bout 2700. Can you believe it, all he had to spend? He moved towards my price by 200 dollars just in response to my silence. I then responded with 3000 not a budge from me. I lost him, 2700 really was his top. But that was OK I wanted 3000. The right buyer would come along. And he did, again I used the hidden table over the phone, and after test driving the car he offered 2600. Silence from me. How bout 200 dollars off the list price, he said. Not to be rude and overuse the silence technique I reverted back to the hidden table and restated that my wife needed to get 3000 for the car. He said OK and a deal was made.
Now I didn’t rip anybody off. Everyone got what they wanted. He a car and me 3000 bucks. But I was able to use three very valuable techniques of negotiation. Even though puffery in this situation didn’t work, it is still a commonly used and effective method. The hidden table is one that I use all the time. “Let me take your offer back to my clients and see what they have to say.” It is so powerful. And Silence, the power house of them all; who would have thought that just being still and not doing anything would work so well. Basically you’re using the motivation of your counterpart against them.
So now you know a few of the basic principles of negotiation. Give it a try You would be amazed at what you can negotiate, Phone Bills, Cars, Salary’s, Hotel Bills, even some entertainment venues. It just takes a little practice and it can be really fun, see what you can get.
Life is supposed to be fun, so Live it up.