Good negotiators understand the skill of using patience. Part of learning this skill is in understanding that you simply cannot become emotional about a purchase because as emotion goes up, intelligence goes down. The other part of patience is planning to buy sometime in the future and NOT buy something at the present moment. Usually, there is another equal or better opportunity awaiting right around the corner and a good negotiator knows that. They know that if they can master the skill of patience, their counterpart likely has not, and this works to their favor. Remember, in any negotiation, both parties are presumed to want to come to some form of agreement. The other party probably wants the deal just as much as you. The key is to show your desire less, even though it may be burning you up on the inside.
April recently purchased a new home for herself. She had been looking in one specific neighborhood for a home where she envisioned that she could raise her young daughter. The neighborhood was safe, the kids friendly, and it was convenient to the school where she taught 2nd grade. One day, as she was speaking to a friend who lived in her desired neighborhood, she was told that the friend’s neighbor might be putting his house on the market. Seeing an opportunity, she went to view the house and immediately fell in love with it. It was perfect in every way and it was for sale by the owner. She approached the owner and told him that “she loved the house” and she wanted to make an offer. The seller, being an astute home-seller, told her that someone else had already seen the home and was about to make an offer (a strategy called The Bogey described in a later chapter).
April agreed to wait until the “other offer” had come in before April would make hers and “she would beat it.” Just as expected, the other offer did come in (whether there was another buyer or not will never be known, but the appearance that there was another buyer is the key here). The seller verbally told April the offer, and she agreed to offer $5,000 more. The seller presumably went back to the other supposed buyer and told the buyer of April’s offer and he beat it. This went on for a couple of iterations until the house was bid up by another twenty-five thousand dollars. Finally, April made her biggest error. April said to the seller, “I am in love with your house. I am a single mom on a limited income. What’s it going to take to buy your house?” The seller replied, “another $5,000 and I think that we have a deal.” April closed on the home several weeks later and lives there today.
Could April have done better? Did she make mistakes? The answer to those questions is “yes.” April violated the most common rule in any negotiation: she became emotional, and shared it with her opponent. She told her that she was in love with the house and that she had to have it. Her counterpart used it to her advantage and made $30,000 more than he otherwise would have. April could have used that money to buy furniture, a new car, or even invest it in her daughter’s college fund. Instead, she gave it to a seller who knew how to use emotions in a negotiation. Here are some other mistakes that April made, many of which we will cover in later chapters:
- She did not make her offers in writing, nor did she get the counter-offers in writing (the seller made this mistake too, since April could have walked away at any time)
- She did not indicate to the seller that she was considering other comparable homes
- She did not use time to her favor
- She became emotionally obsessed with the home
Becoming emotional can cost a negotiator lost money, time, or even the deal altogether. If you find yourself in a situation where emotions are clouding your judgment, there are a few steps that you can take to improve the situation:
- Bring in a negotiator who understands your position and desires, but is not emotional about the outcome. For example, real estate agents can save you thousands as they are not as emotional like the interested parties.
- Take time to step back and review your goals.
- Survey the competition and find something else upon which to negotiate. Be prepared.
Good Negotiators Have a Long Time Horizon
Good negotiators know that the longer they can wait, the better result they will have. The side that absolutely has to have an agreement by a deadline, if that deadline is known by the other party, is at a large disadvantage. For example, most airlines charge their highest airfares to those individuals who walk up to the counter. They know that they are usually in a hurry, committed, and less price sensitive than those who have the luxury of comparing airfares on the internet many weeks in advance of the trip. Much like the traveler, you should leave plenty of time to plan and execute your strategy.
If the goal is to sell something for 6 and you start at 10, take your time getting to 7. If you immediately go to 6 in the hopes of getting it done, your opponent will think that there is more on the table.
Good Negotiators Resist Their Urges
My brother-in-law, Richard Lord, one of the best mediators in the business once told me something profound. When I asked him what was one key to being a great negotiator, he said: “good negotiators resist their urges.” Since negotiating can be emotional, we often have urges that are brought on by these emotions. In life, we also know that emotions are usually more powerful than logic, yet frequently, emotions are wrong. Buying a stock because of greed, without checking out the story; purchasing an item in the department store that you do not need because it is on sale; or lashing out in anger at someone who said the wrong thing to you at the wrong time are all examples of how emotions can rule our decision-making – and how we often tend to regret actions taken strictly on emotions.
In a negotiation, our emotions, our urges can often get the best of us. Good negotiators know that these urges are based upon emotions and they know how to resist them. Often resisting urges gives you the upper hand in a negotiation:
- Knowing when to be silent when you have the urge to speak.
- Knowing when to stand firm when your urge is to give in.
- Knowing when to walk away, when your urge is to “just get it over with and agree to something.”
Through understanding and practice, you will gain the confidence that you can resist your urges.