Driven to save myself and my family from financial ruin, I jumped into the deep end of the industrial real estate industry. I knew nothing about negotiating. All I knew was that I had to close deals — bringing interested parties together, getting them to agree and seeing that everyone walks away a winner.
I no longer sell real estate, but I still rely heavily on the negotiating skills I learned. Sometimes, it’s a complex issue, but most of the time, it’s just a series of one-minute negotiations.
You are a negotiator, too. You negotiate with kids, your spouse, bosses, co-workers, employees, creditors, vendors, friends, clerks and salespeople. You negotiate with telemarketers and repair people, teachers and neighbors. You negotiate using your words, your tone, your body language, even your silence.
Negotiating is the way you get what you want, whether it’s a major purchase or your teenage son to put the seat down.
No matter if your negotiations involve an allowance program for your kids, settling a dispute with a contractor or convincing a creditor to reduce your interest rate, learning to negotiate from strength will reduce tension, relieve stress and build your confidence.
Here are three principles and six basic skills that will help you develop your ability as an effective negotiator.
PRINCIPLE: SOMETHING FOR EVERYBODY
The goal in a negotiation is not that everyone comes out an equal winner but that everyone walks away satisfied. Negotiating a deal that gives something of value to each party is the mark of a wise negotiator.
PRINCIPLE: THE ONE WITH THE MOST KNOWLEDGE WINS
Never forget that knowledge is power. The more you know, the better your chances of getting what you want. The true skill comes in keeping what you know to yourself, revealing only a bit at a time and when doing so is to your advantage.
PRINCIPLE: THE LEAST MOTIVATED PARTY IS IN CONTROL
If the other party finds out how desperate you are to make the deal, you’ve just lost control. Anytime you can send nonverbal cues that you are not desperate, you gain an advantage. The simple act of calmly and slowly closing (never slamming) a notebook, briefcase, purse, calendar or newspaper (whatever is handy) is a negotiator’s most powerful tool. Without saying a word, you allow the other party to fear you may not continue.
SIX BASIC NEGOTIATING SKILLS
No. 1: Prepare. Do the research. Carefully formulate exactly what you want out of the deal.
No. 2: Set limits. Know exactly how far you are willing to go, and stick with it. This allows you to focus on your alternatives and keeps you from appearing desperate.
No. 3: Create emotional distance. Stick to the facts. Put your emotions away.
No. 4: Listen effectively. You do know why you have two ears and one mouth, right?
No. 5: Communicate clearly. Choose your words carefully, and then be quiet.
No. 6: Know when to close. Perfect skills one through five and you will know instinctively how and when to close.
Negotiating has to be one of my all-time favorite activities. But I do have one tiny regret: I just gave away all my secrets.
Mary invites you to visit her at EverydayCheapskate.com, where this column is archived complete with links and resources for all recommended products and services. Mary invites questions and comments at https://www.everydaycheapskate.com/contact/, “Ask Mary.” Tips can be submitted at tips.everydaycheapskate.com/. This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of EverydayCheapskate.com, a frugal living blog and the author of the book Debt-Proof Living.