The reality of any negotiation is that it is an exercise in psychology. Realistic market factors play their role, but final decisions are usually made based on perception. How the seller perceives you, the investor, will influence the deal. Here are some tactics to tip the scales in your favor.
Successful negotiators are always one of two things: extraordinarily prepared, or really good at conveying the impression that they are prepared. The problem with the latter is that the bottom can drop out. Even good actors can run out of tricks when they aren’t completely prepared. You don’t want the other person involved in the deal to see you bluffing.
The best way to avoid this is to simply be more prepared than the other person and business. Know everything about the area, type of business, similar products, prices, and market fluctuations. Do your homework. That way, you can come into the situation confidently. The minute you waffle is the minute someone else gets the upper hand.
The next link in the chain is to ask about what you don’t know. Coerce the opposing party into divulging any information that can be useful to you in your negotiation. This is one of the best ways to break down the fortress to get to your best deal. Bombarding someone with questions is unnerving. You don’t want to make them so uncomfortable that they choose to step away, so pull back before they do and come at the negotiation from a different angle.
Essential questions to ask are those that uncover the true motivation of the seller. This requires a little more tiptoeing than some other situations because offending the other party will kill the deal. However, in order to form the situation to your advantage, you’ve got to understand what the seller wants.
Successful business negotiators know that you’ve got to purchase from motivated sellers. Sellers who are simply toying with the market aren’t going to give you the best deal and will waste your time. Find out before you get too involved in the negotiation process if the other party is truly interested in selling the product at reasonable price.
Be firm. Be in control of the situation but not overbearing. Come across as too overbearing and you will appear the opposite of in control. Strike a fine balance. Choose your words carefully and actively. Avoid being passive. State what is going to happen.
Know the value of a good silence. This can be applied at any time, but it takes a good instinct to know when. Use silence to your advantage. When the other party has shot back with a demand or an offer that is outside of your preference, be silent. Allow them to feel a bit doubtful, ill at ease. If they have to second guess their own tactics, you are already gaining an upper hand.
Learn from the best. Seek out someone you trust who knows their stuff and see how they operate. The most successful property investors know you don’t learn negotiation tactics simply by reading about them. Negotiation is a skill best learned by observation. Observe their mannerisms and pay close attention to what is said and what is left out of the conversation. Use what you see as a basis for how you operate. Model, but don’t imitate. If you act in a way that is foreign to you, it becomes very obvious.
Practice negotiating in your everyday life. This doesn’t mean you have to haggle with a gas station attendant. Negotiation isn’t just getting your way. It is the skill to convince. Try it out with members of your family or during discussions on the job. Remember to be perceptive and study the psychology of others around you. If you can sense what they want, it can always be used to your advantage.
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Daniel Lock
Phone: +61 8 7127 4047
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E-mail: daniel.lock@daniellock.com.au
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Property Development Coaching Program: http://www.PropertyDevelopmentProfits.com/
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You make some great points, especially the point about know the value of a good silence. But as you mention it takes a good instinct to know when to apply this.
Hello!
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PS: Sorry for my bad english, I’v just started to learn this language
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