How to Negotiate

by Derek Halpern | Follow Him on Twitter Here

Derek's Negotiation Tips

No matter what you do in business and life, improving your negotiation skills is one of the BEST investments you can make in yourself.

* Buying a car? Negotiation skills help you get a better deal.

* Hiring a freelancer? Negotiation skills help you get a better price.

* Working as a freelancer? Negotiation skills help you get paid better rates.

Now you may believe the art of negotiation is a dark and mysterious art, and it can be, but the truth is, anyone (and I mean anyone) can use these 3 simple tips for becoming a better negotiator.

Here’s How to Improve Your Negotiation Skills

Which of these three tips do you think you’ll use?

Or better, which of these three tips have you already used with success? Share your story in the comments.

P.S. If you know anyone who could leverage these negotiation tips, take a second and send them a link to this video. You’ll be helping me… and THEM!

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{ 73 comments… read them below or add one }

Ahmed Safwan@ To Start Blogging

The tip that I am using a lot is the 2nd one. I always ask my clients who want me to write for them for 150$/high quality article. If they say yes, then that’s great. If they say no, I will ask them for 100$ and luckily 90% of the times I get a yes.

Now, I don’t accept less than 200$, but this tip helped me a lot.

The 3rd tip seems to be the next tip to try. I will ask my virtual assistant to blame me for saying no, and then get the highest price after that.

Thanks Derek for these awesome tips

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Gabe Johansson

Killer tips, Derek!

Reminds me of my car sales days… The number 1 way I sold cars and made $600+ commissions (selling KIA!) was by switching from a total car cost to a monthly payment pitch. For example, instead of saying the price was $20k, I would find a monthly payment that would fit their budget while retaining commissions I worked hard for.

How is this relevant? Well of course, even with this method I would get resistance. My sales manager TOLD me to put the blame on him and it was a very similar script to the one you used. Worked like crazy!

If I didn’t have to put in 60-70 hour weeks, I’d probably still do car sales. It was fun minus the long hours.

Thanks for the killer post,
-Gabe Johansson

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AC

Oldest trick in the book! That’s why you always negotiate on total purchase cost when buying a car. It’s way too easy to fudge numbers when looking at payments.

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Kevin Rogers

I had this exact encounter yesterday at a Ford dealer.

He’s determined to get me focused on payments and I keep telling him, “I’ll pay this off in a year, I just want the best deal you can make.”

Then I go $5k lower than I think he’ll go and 3,2,1… “I can’t get anywhere near that, but I’ll bring it to the manager.”

I’m not happy until the manager comes out and stays at the table. Now we can get somewhere.

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Gabe Johansson

I definitely could have worded my above comment better. I didn’t avoid total cost of course. We were required to show every financial detail before anyone signed anything.

A lot of people when buying a car get hung up on the larger number, and it just makes it easier to digest when focusing on the monthly payment, resulting in me closing more sales.

Sales of any sort is a people business so there is no sense of screwing people over. Make customers happy to make repeat and referral business effortless. Keeping a customer was $330 cheaper than generating a new one!

Even with all that being said, most dealerships don’t understand this simple concept and instead of working on it, the reps sit and complain that they didn’t get a paycheck that week.

I’m sure you already understand this, but looking back I feel I could have said things differently.

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Joe Cassandra

Keep the videos coming Derek!

I did a 4-part series on Salesmanship on my site and a Big thing, especially with the Internet nowadays, is do the work beforehand and come prepared.
You automatically bring credibility to the situation. Even if it’s a half-page of anything, it carries weight.

I’m also reading “Trump-style Negotiation” by George Ross (great rec. for you Derek) and he goes along with asking for more like you said, but also says: Act like you really want something, then concede it graciously, THEN ask what you REALLY wanted and the other side after conceding one thing they thought you wanted will give the other.

I love you’re asking for more, it brings up Robert Cialdini’s point on the “Perceptual Contrast Principle”, once a large offer is declined a smaller offer looks like nothing.

Thanks Derek!

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Darlene at BlogBoldly

Hey Joe..

I know “Trump-style Negotiation” by George Ross isn’t actually by Trump, but if it’s even about him, I’ll go check it out.

Which brings me to the next point.

Trump’s books are awesome to read for negotiation skills. He is the master of negotiation!

~ darlene :)

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james becton

It is funny you mention Trump. I mean here is a guy that has failed and gone bankrupt more that a few times, yet he never quits getting back up. My experience with negotiating is like that, you lose on one part of the deal but get back up and make it up somewhere else in the deal.

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monjawessel

Derek,
Once again a fantastic video! Thanks for sharing. Guess we should be reminded that we can “talk” to people even after a “no” seems to be what we get.
I recently launched my membership site and I had a user signing up and sending me an email quickly that she subscribed to the wrong class – she wanted to do something else, not an affiliate niche site.
I told her, that she could – of course – cancel her subscription and get her money back – after all we have a 60 days money back guarantee but I could help her if she’d be willing to give me more details.
In the end she was more than happy to get help directly (the class included one-to-one training as well) and she still is and even said that the membership costs are more than worth.
So guess it’s all a question how we talk to people…

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Julien @ Négociations Musclées

Hello Derek,
Good stuff that you bring in this video ;-)
If you speak French (but I’m not sure of that) , you can check my blog about negotiating. And if you have French fans and they are interested in learning negotiation , they are welcomed :-)
Yours
Julien

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Andrea

it was aaaaall good until you called your audience-to-be “idiots”. Hey man, you’ve got really good tips, but you should add “show some respect” to those.

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monica

That was my favorite part of the video! I love Derek’s attitude.

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Derek Halpern

I didnt call my readers idiots. I said anyone who’s not my reader is an idiot ;-)

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Scott Masters

You didn’t see the pop up that said “just kidding!”?

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Elisha Tan

How do you not take the blame for the ‘no’ if you are the boss and only person in the company?

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Brenda

Elisha, that’s when having a “partner” (even a fake one) comes in handy.

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laura

Hey Derek, great tips. Question: what’s a good way to present it as “not your fault” when you’re clearly negotiating for yourself? For instance, negotiating a higher fee for your own work, and you’re the boss?

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Piers | Kickstarters'HQ

“Jeeze, I’d love to, but my spouse would kill me if I gave *anyone* a rate like that…”

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Jonathan

You guys are amazing… it does feel different, and I’m sure it breaks so many barriers in the negotiation!
Great job!!!

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Chris

Hey Derek, thanks for the tips, I have one question when you own the business and are making the deals yourself who can we place the blame on then or is there a way to phrase it as to say I just can’t go that low and still profit from our agreement? Thanks in advance!

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Jay Rosenberg

Blame Harvey, your imaginery partner. He’s really tight with money.

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jared

Perfect!

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Chris

Great idea! Thanks although I hate to be a white lier lol

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Alfonso Inclan

Robert Kiyosaki says that he always blames his business partner, but he would never say his business partner is his cat. :)

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Rohit @ The Money Mail

PS: I don’t want my staff writers and virtual assistants to see this video! I fear I may have to pay them more.

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Jordan Coeyman

Great tips. Sound advice to anyone trying to negotiate. I just successfully negotiated a backrub from my girlfriend using these techniques explicitly!

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Marius Fermi

Awesome video Derek – the perspective of the person opposite is part of sales 101 in my eyes. It’s much like networking events and how the majority of attendees always end up talking about themselves or their business – understanding is part of the sales process from both sides so given the chance always place yourself into the other persons shoes.

It’s more about habit too, I’m still trying to remember to do this when I negotiate too!

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Dave Hilton

Nicely done, Derek! I think you put together quite an effective mix of Integrative and Distributive Bargaining tips for novice negotiators.

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jared

Great tips. I’ve used the first two.

Being understanding rather than understood is powerful in any communication, especially negotiation.

I’ve learned that as my experience and confidence in myself and my abilities increases, I negotiate better. (kinda obvious I guess, but…) A lot of which has come through emotional intelligence rather than strictly hard skills.

Having a realistic view of what my skills and intangibles are worth in the market and being able to ask for more than what I expect has worked well in most cases. But also be willing to walk away if we cannot come to an agreement.

In some cases, I’ve wanted to jump at the initial offer, but still made a counter offer. To be willing to show that I’m confident in my abilities and what I can bring to a team.

If you’re not willing to fight for yourself, why should they?

A lot of that has come with age, and the willingness to hustle, take risks, and know I’ll land on my feet no matter what happens.

Along with the realization that life is short, take some risks and don’t spend time doing something that drains your soul.

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Christian Nordtomme

Good stuff.

But couldn’t tip the second tip also hurt you? It seems like you might take yourself out of consideration completely by asking way too much. I know I’d be reluctant to spend much time negotiating with someone asking more than twice what I’d be willing to give. Especially if both parties are following this advice, the split may seem way too wide to for there to even be a point in talking. I don’t know if there’s any evidence to support this, though.

I like the first tip, though, and think that might be enough in itself. It’s an honest, helpful and effective approach. (Have you read Getting To Yes, by the way? It takes this approach almost to the extreme.) The other two are just tactics that ultimately complicate the first approach by clouding the negotiators real interests.

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Sarah

A lot of people who read your site (myself included) are self-employed or our own bosses. Might you be able to give an example of how to pass on the blame when there’s not a direct person you can point to?

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Jay Rosenberg

Here’s an add on.
What if you negotiate a great price with a free lancer and then don’t like their work? There is a way out.

And it’s this: Include with the agree on fnal price a “turn down fee.” Usually 20%. If you don’t like the work the other party lets you out of the deal for payment of 20%. P S: It also motivates the free lancer to do a better job.

This is a very powerful tactic. Try it.

Jay

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jared

Great tip Jay. I run into that a lot with hiring content writers, I’ll have to use that. Thanks!

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Chihuahua Zero

Let me see if any of these tips work when I renegotiate computer privileges.

“Sorry, but you CAN’T use it in the living room. It’s just that the bunny is too willing to bite wires. You don’t want to lose the charger to him, right?”

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Maia

Derek, (you’re funny, love the video)

I think the best tip is taking the perspective of the person you are negotiating with. I was just listening to an episode of your podcast this morning where you explain how you got a great deal on a new TV because you understood the sales person’s perspective. At the end of the day you both came out on top, wholly because you could see his perspective, not just what you wanted and it allowed you to take control of the situation. Nicely done.

Maia

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Amandah

Hi Derek,

I sincerely appreciate your straightforward approach and real-world solutions. The story about your job working for the “B.S.” sign company was a good one.

“Shifting the blame and positioning yourself as someone trying to make the deal work instead of the person responsible for the NO!” is an interesting negotiation tactic. Thanks for sharing.

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Heidi Thompson

I love that you talked about passing the blame. That is something I always did when I worked in restaurants. I would always blame the kitchen because at the end of the day they got paid a salary while I got paid in tips which are based on what the customers think of me.

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Kumar Gauraw

Derek,
This is awesome. “Always ask for more than you need.”
Thoroughly enjoyed your video as usual. And you are right, like many others, I can’t avoid watching your videos. You are simply too good to avoid brother!
Regards,
Kumar

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Michael Spencer

Killer (as usual), Derek.
I really liked your example of working at the sign company. “I don’t care what we pay you, I just make $8 an hour. . .” It seems like it would deflate the other person’s position as you have nothing to loose and they have everything to loose by saying no.

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Sam

Great video Derek-I especially like the little dance you did when you were talking about wiggle room-it was pretty awesome. I’ve stopped taking responsibility for the ‘No’ quite a while ago b/c I found when my customers thought they were talking to the one and only almighty authority – they felt free to ask me to rewrite my policies to suit them & then they wouldn’t take my ‘no’ seriously-so I just began to pass the blame on to my investor/business partner and it made life a whole lot easier.

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Steph

Thanks, Derek, this was timely. I’m currently negotiating with a web designer for a site upgrade, and the price he quoted sent me into sticker shock. Not only did you remind me of some good tactics, but you also made it clear that he’s probably asking for more than he expects to get.

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Noor Shawwa

Thanks for the tips Derek.

To add to the second tip, ironically when you ask for higher then compromise to a lower price (that you want), the other side will feel better about the deal (vs. asking for what you want right off the bat) and will be more committed to complete their part after the deal.

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ShinazyBOBBblog

TIP # 4

Never be the first one to put the deal on the table. Frequently, I found the deal the other person offered / wanted was acceptable to me.

TIP #5

Know what your walk-away number / terms are before you start. The person with the power is the one who can walk-away from the deal. I found when I was ready to walk-away the other person would offer their “best deal”.

TIP # 6

Leave your ego at the door. This is business and it is all about the deal, not you.

Much success to us all

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simon

I always thought empathy was important but will practice perspective taking.

The second point I bummed out completely cos I always used to ask for less than I’m worth. Its a great point though sometimes in some situations won’t people get put of completely and just walk away?

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Caroline Buhler

Thinking of the other person’s perspective is ideal. Good reminder! It’s about their needs and how what you are offering meets them perfectly :)

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Brenda

I’m the world’s worst negotiator. Has anyone ever quoted an outrageous price because they didn’t want the job or the business – and gotten it? Just because you were uncomfortable saying no? I think it’s an energy thing.

In all three of my careers I would raise my prices/fees when I was too busy, or especially if I smelled a needy customer. Apparently I still won’t say no if there’s enough in it for me.

Cheers

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Orleatha

i like your H belt… just sayin’

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Jason

Here’s my question:

When you are quoting someone a higher price than you expect to get, do you mention that your price is negotiable, or do you wait until they say no to come back with a counter? My fear with quoting higher prices has always been they’d shut down and simply say no.

Great video! Thanks for the tips Derek! I only wish I had watched it before buying my “premium” replacement windows…(I still get mad about that).

-j

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Giovanna

Is nice to see the videos back!!! Tks!

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Rhoberta Shaler, PhD

Hello, Derek,

I like the energy of your video. As I teach negotiation for the University of Texas at Dallas, I was interested to see what you had to say.

And, here’s what I say:

TIP #1. Excellent way to collaborate in any situation, or any conflict. Do your negotiation preparation by thinking of the negotiating partner’s perspective thoroughly.

TIP #2. Everyone knows that that is the game. Asking for double is an error in judgment because now you are not “playing the game” you are disrespecting your negotiating partner.

TIP #3. Someone’s been in the used car business too long! I notice that many of the comments are from entrepreneur’s who work alone and ask who to blame. My advice: Give Tip #3 a miss. Surely you can learn to negotiate well and in such a way that people would want to do business with you repeatedly. Blaming others for your lack of skills is no way to build credibility as an entrepreneur. (If you need skills, I often teach webinar series on negotiating skills for collaborative entrepreneurs.)

If you do not learn to negotiate well–just another form of conflict management–you will always lack confidence and leave money on the table. If you use Tip #3, you do not have confidence and you’ll leave respect on the table because you obviously do not have the authority to make your own deals.

You offer so many great tips and usually I agree. This time, not so much.

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Nick Ruiz

Those are some good tips Derek…I’ve done a lot of negotiation in my real estate investing career, so I’m very familiar…

2 other tips that may help: 1. You have the upperhand if you are willing to walk away at any time and 2. The first person to name a number usually loses the negotiation.

Just thought I would throw in my 2 cents :-)

Great post…

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Andrew

Dude, you’re legendary. Loved the video! Big up from Amsterdam

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Avromy Segal

Thanks for this Derek, you have a captivating way of delivering your message. Great content, thanks so much!

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Andrew McAuley

Kickass video, and excellent tips. One thought I had while reading the comments though – I’d be curious to see how well blaming *anything* works against blaming a person with regard to negotiation wins, e.g: “I have bills to pay too”, or “company policy”, versus “My boss is an ass”.
While I can’t say anything with regards to money, working in retail I used place the blame on company policy (occasionally the management) and found people were much easier to deal with, regardless of whether you’re flat out rejecting an offer or attempting to calm down a pissed-off customer.

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Jovell

I’ve used the 1st and 2nd tips but this is the first time I’ve heard of your third tip. I think I still need some more examples to better understand how to do that. But thanks for the new idea.

By the way, is it the new haircut, or black long sleeved shirt…you seem to have lost weight?! You look great!

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Paul

Good video, Derek, but the sound is too quiet. I’m watching on Nexus 7 with maximum volume, but it’s still too quiet.

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DJ Bobby C

I like all of this except the “blame someone else” bit. It’s an old-school cheesy sales tactic. If any sales guy ever says to me, “My boss says I can’t do it at that price”, I don’t believe them and it instantly breaks my trust in them.

It’s far better to just say, “I honestly can’t do that price, but I’d really like this business, so let’s work together to find a price that works for both of us”.

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Daniel DiPiazza

Hmmm….I don’t necessarily agree with #3. I think that in many instances, you may not have to “pass the buck”. The other side can know where you stand, respect that, and there shouldn’t be any hard feelings. On the other hand, I too have used the ‘It’s not me, it’s them’ line of negotiation and it does work. I just don’t think it’s an absolute.

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Michael

Crazy timing was your email. Today I called a hotel to try to negotiate a better deal than their current living social deal. I asked the manager if we could cut LS out of the deal and we split their commission. The manager assured me that he couldn’t better their price. We hung up. I checked my email and saw your video. I immediately called him back and implemented all 3 tips you taught. It worked perfectly!!! I booked the room at about 17% lower than the advertised deal.

Thank you Derek
Michael

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Shilpa

Hey Dereck,
Great tips! I take negotiation classes are part of my curriculum and the forst two tips of yours is what the professor is trying to drill into our heads.
Understanding others perception and interests ( not only their position) and
Making the negotiations more integrative than distributive and increasing the size of the fixed pie.
The 3Ps of any negotiations are the key Prepare, Probe and Propose!

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Sandra

Very timely, very timely. I’m wondering, though. If I have no one to blame, does that mean I blame my circumstances? Hmm, whadya say?

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Anirudh

Hey Derek ! Am a very big fan of you and found this post useful than the other posts I’ve already read. Loved the Video. Thanks :)

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Yoli

Hey Derek.. thanks again for the fun to watch, always informative video.

A lot of people are wondering how negotiating for yourself would work when, it is known that you are the boss, and there is no one else to blame.

I think one way to combat that, would be to remind the prospective client of the insane value they’ll be getting by working with you, and you can also offer the names of a few satisfied clients who love your work, to talk to them.

Also, I think, (and feel free to correct me if I’m wrong). This lesson was more about how WE can get the best price when looking for a product or service. Not so much when we are selling our own goods.

Your price is your price. Pack it with incredible value, show your client you truly care, and deliver more than your promise.

Thanks Derek!
PS looking good.. :)

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Mike

As for tip #1: How on earth are you supposed to know what the other person’s perspective is? Seems like you’d just be making assumptions unless there’s some particular way to actually get into that person’s head and heart.

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Matt Beglinger

Derek, great points. I liked #3, this is a good one. I’ve seen this used by a real estate agent well before but wasn’t able to verbalize it until you spelled it out. Great video. Thanks

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John Whiting

Thanks for the advice! Great article!

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Constantin Gabor

This is Gold, Derek! Cheers for doing these videos.

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Himanshi

Watch the video and I didn’t realized that its easy :)

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Sapna

Derek,

I’m not idiot now for sure. I’m also on your list as well.

Thanks

Sapna

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Sophie Manders

Love this video. Agree with the tips as well. However, asking for more than you really want can be dangerous when sounding unrealistic. As a PR and Communications student, learning about BATNA (best alternative to negotiating agreement) helps. Also understanding the difference between integrative and distributive bargaining strategies is beneficial!!

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Timothy

Great insights, Derek! This is definitely a good reminder for all of us to be thinking about where the other person is coming from before we arrive at the negotiation table.

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Mike

I like to think of tip 2 as the craigslist theory. Always ask for way more than what you want on craigslist expecting low ballers.

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Matthew Jeschke

LOVE the post. Thanks! There’s one tip I use that you didn’t cover ;) This tip along with what you shared is complete DYNAMITE for negotiation. This might be a bit long though to explain though…

I’m a Real Estate Agent and reverse engineered the simple supply & demand model to do this. Here’s what I do… I setup my buyer clients to have a surplus of home choices (I call them backup positions / homes) so effectively they are always in a buyer’s market. Then when we enter the negotiation. I do exactly what you speak of, to understand the seller’s position & speak directly to it… But also say to the seller,

“Hey look Mr seller. My client loves your home, but he has 2 other’s he’s interested in. He’s going to offer you this price which I understand is less than you’re asking, however, he has 2 other homes he’s offering on and they are willing to sell for the price he’s offering you.”

I will show information on the two other homes along with a nice cover letter I draft and my client signs reiterating the seller’s thinking / mindset. Goal of cover letter is to get seller to connect emotionally with my buyer and is something to the effect,

“I love your home, understand you took great pride in it, and want to offer you as much as I can however, other two homes are less expensive and in my right mind I cannot pay the extra even as much as I like your place. Here’s a picture of my kids, I like the back yard gril… love grilling, surely going to love your place… bla bla bla” Insert picture of family holding baby… anything to add emotional spice to the negotiation. You get the picture ;)

Like I said this in addition to what you said is PURE gold. I’ve shaved up wards of 25% off the price of the home for clients before! Now I’m in a sellers market and still experiencing 10-15% off appraised / market value of the home in multiple offer situations (up against other buyers) using these techniques.

I also developed a flip side to too this to help my seller clients keep people from bartering down the price, even in a buyer’s market. Used that to help a sellers fetch as much 18% over appraised before.

My website link also show’s a more in depth explanation of a specific example where I executed this concept for the first time and saved $40,252.

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