Negotiation - What does it tell us

[eth2]

This post started in another thread (by me). I am a student of negotiation having spent my life negotiating contracts. I find it to be the most fascinating area of human behavior.

Negotiation behavior parallels real life behavior. If you know how someone negotiates you can gain a tremendous amount of information about them personally. There are the "nice" negotiators who try and trade on relationships or by trying to make the other party like them. They are either passive people, or sometimes skilled (albeit it sometimes disingenuous) sales people. There are the data driven negotiators who give you all types of stats to bolster their position (These Khorns new are over $9,000; the last Cornwalls sold for $1,500). There are the patient negotiators who just keep coming back and coming back with the same position (sometimes restated). There are the "I take this personally" negotiators. They get angry like the offer is meant to somehow denigrate them ("I hate low ballers and they are trying to insult me.") There are the "I must win even if Ioose" negotiators. They lose sight of the end result (getting the deal done) because they must win some lesser battle. These are generally Type A personality types.

Anyway, you get the idea. This does not make them good or bad people. Instead it just provides insight into how they see the world.

Any thoughts based on your experiences?

[JL Sargent]

You have to be a negotiator to look out for your best interest. I enjoy making a deal. I also enjoy walking when it's not right. So many times sellers or buyers will come back to your terms in time. 

[eth2]

Agreed. The question is "what is your personal negotiating style."

[Travis In Austin]

My style changes with the situation, who I amdealing with on the other side. Are they new, have we dealt on things before, what is their style? Gender makes a difference in how I may approach something. I have dealt with the same types you have dealt with. On some things it is just, NO, NO, NO there really is no negotiations but I try to be optomistic because I have worked out things I never thought could get worked out.

My closest friend is superb at it, a niche practice of getting things worked out. He doesnt go to trial, if he can't work it out he sends them to someone else to try.

I wish I was better at it, that is for sure.

[JL Sargent]

Lately I have been the patient distant negotiator. If I'm interested in a individuals Harley Davidson motorcycle for instance, I call on the phone and find common ground with the seller if possible. Maybe we are both from blah, blah, blah. I tell the seller about myself. I want to be likeable. I listen to what he has to say carefully. After several minutes I tell him that I don't want to show up there and badger him over a price and I offer what I think is a good price for the bike represented condition. If he is asking $12K I might offer $10K provided inspection proves satisfactory. This seems to work well for me. 

 

I bought a Harley Davidson Road Glide 2 1/2 years ago for $11,000.00 using this negotiation technique. After riding for two years I sold the bike for that same $11,000.00 in a very similar way. I told the buyer over the phone what my low take on it was before he even showed up. Guy brought cash looked at the bike and handed me the money.

 

 

I like to shoot down the data drivers. Just this past weekend:

 

Guy at the flea market has a Miller welder he is selling and asked $600.00. He said new it is $1600 from Miller. I said "that ain't new and this ain't Miller." "What would you pay for it?" he asked. I said that I looked at it at Scott's Pawn Shop (where he bought it) and wouldn't pay the $300 they were asking so I guess about $250.00. He didn't like that too much and we parted ways LOL.

Edited February 12, 2015 by JL Sargent

[Hornmiester]

I find buying, or selling, a new house to be an area where money is not the most important aspect of the deal. I bought a house from a retiring doctor several years ago. We could not afford his asking price (which was reasonable) but when we went to look at the house we brought our 10 year old son. The sellers fell in love with him. They really wanted HIM to grow up in the house that their sons had grown up in and gave us a spectacular deal.

When something means a great deal to the seller, they look to sell it to someone whom they feel good about. Similarly, when I have sold homes I have rejected offers from people who come in and start telling me what is wrong with the house in an effort to justify their offer. They don't have a snowballs chance in hell of my accepting their offer.

So I agree with DWILawyer. A negotiator should not have just one "style."

[Paducah Home Theater]

Any thoughts based on your experiences?

I built a sales based business so I'm exposed to it, but, I hate it to be honest. Typically what I do is try to bypass that whole thing and give EVERYONE a killer deal that is more than fair, then basically tell them if they don't like it they can walk away. The level headed people know what's up and are more than happy to deal with me at the prices I give them. It is the jerks who think they are special who want something more. They'll try all kinds of mess to get anything at all but it usually makes me just clam up more. Personally I don't think an unpleasant wheeler and dealer ought to get a better price than the shy little old lady. Many others don't see it that way though. My favorite is charges of racism. I don't know what it is about Louisiana but I've been accused of being a flaming racist because I do this by multiple people who live in that state after their other usual tricks didn't work. I can assure you that's not the case.

[Jim]

I am in the real estate industry and prior to that was a stockbroker, you know the kind. They cold call you and ask for money and keep going unitl you hang up, or give them the order. I was the type that even if you hung up on me, I called back saying I'm sorry I must have hung up accidently.

 

I was taught to "negotiate" 2 different ways. In the stock industry it was greed, in the real estate industry it was finding a common ground.

 

On the stock side I was always about numbers and numbers only. And I told the people who I called the same thing, it's about numbers.

 

If someone stays on the phone with you while being pitched stock for more than 5 minutes, they are interested in the potential, you just need to push their greed button, and I would literally say to them, I know you're interestd, I just haven't pushed your greed button yet,If you weren't interested you would have hung up. So I was a very aggressive negotiator.

 

When I got into real estate the first thing I learned was F.O.R.D.

 

Family, Occupation, Recreation, Desire. Get on a common ground and go from there. I would also tell them flat out if they are a 1st time buyer, you are going to 2nd guess this decision the whole way through, everyone does and I would hold their hand.

 

On people who were on the fence on a transaction that couldn't make up their mind, I would break it down monetarily to the day how much more/less they would be paying for this property, and then tell them, for x amount of $$$, are you willing to let this property go? I would then throw numbers out to them on how much they pay in rent annually showing them how much they saved over a 5 year timeframe, then show them the same 5 year time frame owning would save.

 

What I will say, is 60% of the entire world is like I am when it comes to this "Type A". We only care about the numbers, don't want to hear a long drawn out story about how we are goping to get to the finish line. It's basically how much,how long,what's the return. (Not always good, but the bulk of my business comes from this type)

 

I will also say that 25% are "talkers" where they can talk you into doing things and are good chameleons. (I can occassionally close with them)

 

10% are strictly tire kickers that want to hear everything and then run and crunch their numbers and look at it every which way they can before they make a decision. (I have very big issues dealing with these types)

 

And the other 5% are your daily 9 to 5 ers that come in to work every day knowing what needs to be done and knowing they don't have to give extra and are content with their weekly paychecks. (rent payers who say they want to buy but won't due to it messing up their daily routine)

 

What I have learned is that the above numbers are accurate, and that you will attract your personality to "close" a negotiation.

 

I personally can do a million things, but can't finish them or have correct paperwork and a filing system. My chameleon abilities are not that good. Having said that though,I have been self employed for the last 20 years, so something is being done OK.

[eth2]

It is interesting that some people hate to negotiate. I just love it.

It is like a chess game, trying to figure out the other persons real walk away point (also know as a "BATNA" in the negotiation literature.. best alternative to a negotiated agreement). Negotiation is especially difficult with someone you have never met, or who you cannot see. We find so any cues in voices, facial expressions, posture, etc., that are not available over the internet. You also need to be careful that the other party sees it as an enjoyable exercise. If they don't you can quickly create an enemy as they can't understand your motivations. If it was a "science" a computer could do it. But it is an "art" which incorporates so many different skills, experiences and intangible qualities.

[Jim]

I personally am one of the easiest to sell to as I have a number going in and put it out there right away, if it's not accepted I walk, but at the same time don't mind paying for something I like. That is part of being a salesman. If a person is going to make a commission on it from me I don't have a big issue with it as I get paid the same way.

 

We are one of the few countries in the world also that don't negotiate and barter for everything and have set prices (retail). That's why a lot of people do not like negotiating with people from other countries, that is what they are used to, we aren't.

[Paducah Home Theater]

It is interesting that some people hate to negotiate. I just love it.It is like a chess game, trying to figure out the other persons real walk away point (also know as a "BATNA" in the negotiation literature.. best alternative to a negotiated agreement). Negotiation is especially difficult with someone you have never met, or who you cannot see. We find so any cues in voices, facial expressions, posture, etc., that are not available over the internet. You also need to be careful that the other party sees it as an enjoyable exercise. If they don't you can quickly create an enemy as they can't understand your motivations. If it was a "science" a computer could do it. But it is an "art" which incorporates so many different skills, experiences and intangible qualities.

I simply see it as having to be a win/win situation before I can even justify the time involved. When it is a win/lose, then the exercise is simply stroking someones ego at my expense. When somebody deals in a high volume low markup business, at some point you just have to say that it is what it is, either you like it or you dont. That drives some people nuts, which in turn drives me nuts. At this point I dont know how to communicate to them that I am not interested in the ego stroking without them getting offended, at least in a faux manner possibly as a last ditch but misguided effort to get me to cave.

Edited February 12, 2015 by MetropolisLakeOutfitters

[Fish]

I'm a let's don't waste anybody's time negotiator. You got it priced right I'll check it out. If its what you said and what I want were done. If not I don't really want it but if they ask how much I may make an offer that's well below what its worth. If they say firm no bargaining up front it better be cheap or I move on, you can't deal with me, I can't deal with you. If you have it priced slightly more than I'm willing to pay I will make a reasonable offer.

If I'm selling I try to price right but will always try to deal a little. If they offer some silly offer I say nope, sorry, good luck to ya. I am not offended by any offer, people like a deal.

Its served me pretty well, I have made many deals and only a very few were not up to my standards.

[Jim]

That drives some people nuts, which in turn drives me nuts. At this point I dont know how to communicate to them that I am not interested in the ego stroking without them getting offended, at least in a faux manner possibly as a last ditch but misguided effort to get me to cave.

 

When I go for a listing at someone's house that wants to sell, I tell them 3 things are going to happen today.

 

1. I might like what you have to say and want to do business with you.

2.You might like what I have to say and want to business with me.

3. We may come to an agreement that neither one of us is a good fit for each other and we will part as friends.

 

Having this in mind, may I be bluntly honest with you as we go along, or do you want me to feed your ego?

 

When I say this,95% of the time they say bluntly honest, the other 5% I immediately excuse myself from the meeting and tell them I am not a good fit for them. I am a consultant that acts in a fiduciary roll, not an agent that acts in a functionary roll. 

 

If I consult,I help you see things you need to see to make an informed decision, if I'm a functionary, I'm basically a cab driver driving you around to see properties, or become an order taker.

 

I once had a husband and wife that I was sitting with and the husband liked me, but the wife kept cursing at me saying she didn't want an agent and that her friend was an agent and was telling them how to sell. Mind you it was 6 months in they were trying to sell in the height of the boom. I looked at the husband laughing and said to him can I see my card for a minute? He gave it to me I stood up, looked dead at him and said I feel for you having to go to sleep with this every night and proceeded to tell his wife she was a jerk and I didn't need or want their business. I packed up my briefcase and left with her following behind me telling me I was an A-Hole. Long story short 2 weeks later they came into my office asking me to sell their property. When I asked them why they changed their minds, the wife said you were such a jerk that I thought to myself, who the hell is this guy, then thought if he had the ba&&s to get up and walk out on business there must be something he knows we don't. I laughed and again said I don't think we can work together and didn't take the listing.

 

In my business it is sometimes better to walk away than have to deal with the daily headache of someone hounding you. There is no "end result" as above comment states. Just a headache and potential lawsuit.

[wvu80]

Terrific topic, Earl.     At some point, I hope you jump back in and share more of your insights, or point us towards some further reading.

+++

 

For myself, I would consider myself a "straight shooter."  If you offer a fair price for both of us, I'll take it.  If you ask 10 and I want to pay 9, I'll offer 8 and meet halfway at 9, which is the price I want to pay. 

 

I try not to "fall in love" with the item I want, so I set my price and if the seller is too high I'll walk away, but without emotion.  I have the idea there is another item like it down the road.

+++

 

We have Amish around my area.  It may interest you to know that the Amish don't negotiate.  If they have a Belgian draft horse they ask $1500 for, then that is the price.  They don't care if they sell it, they don't care if you buy it, the price is the price.

[USNRET]

At one time I was a military recruiter; I hated "intangible" sales. Moral reciprocity, Deming, yada, yada. Now it's all about getting buy in from the work force with them making the plan to achieve the greater goal. My buying? I do not like to negotiate; tell me what you want, bottom dollar. If I tell a car dealership that I have cash or approved financing and I do not want to hear their sales pitch on blah, blah financing and have to say it twice I am GONE. When selling I state a price, and if you make a counter then it's yes or no.

[mustang guy]

I have raised my sons with the idea that negotiating is the most important skill you can learn. As a demonstration, I let them watch me negotiate for a car, and in a few short minutes get a price down $1,000. Then I let them know that I made $1,000 in 5 minutes, which is equivalent to $12,000 per hour, and that was just for a car. Conversely, if you are the person giving up to the stronger negotiator, you are paying him $12,000 per hour to make you a nervous wreck and feel like you just got taken advantage of.

 

They get the picture.

 

If you ever watch Shark Tank, it is interesting to see the negotiation strategies. I have gleaned a good deal of insight watching that program.

[oldtimer]

That's one way to look at it.

[eth2]

I am guessing that many of you have read "Getting to Yes." It was written by two negotiators who conducted the successful middle east discussions with President Carter. There are five basic principles that seek to neutralize our bad tendencies (e.g. focus on problems not people, don't focus on one solution but rather seek options...). When I taught negotiations I used simulations to teach these principles. People got so into the simulations that they became real to them and their true selves emerged. As a concluding excersize I would have them compare a self description I would have them write on the first day with peer evaluations of them on the last day. There were many interesting reactions.

Edited February 12, 2015 by eth2

[ChuckAb3]

I used the 'Getting to Yes' principles for many years in contract negotiations. Boiled down, it often is a matter of identifying the interests of the other side, identifying your own interests and then coming up with a creative solution in which both sides have most of their interests satisfied.  In the majority of cases, no one has to give away the store to get the deal done.

[deep3shot]

Someone once told me that if both parties in a negotiation walk away feeling like they'd been f@#^&*d the deal was fair.  I can't say that is my philosophy but it may be true.  My experience is with selling commodities so I must know "what I can live with" as a result and try to do a little better by offering a bundling of products or perhaps a longer term deal.  In my business you have only one chance to earn a customer because it is rare to get a second bite at the apple so close the deal and live to fight another day.

 

It is worth noting that the information age has allowed for both sides in a deal to be better prepared when they get to the table.

Edited February 12, 2015 by deep3shot