Finding the Win in Any Negotiation
No matter how complex and time-consuming negotiations can be (especially real estate negotiations), getting into them without having the basic knowledge to help you understand what’s going on can ruin all the chances of success you might have.
That’s why it’s important to know what the process consists of, and how we at HACK&Co go about our negotiations. We focus on what really matters to our clients in negotiating and finding ways to get the best outcome for the client out of any deal.
So, what we do and what we talk about here is not only applicable to real estate negotiations, but any negotiations overall.
What to do before negotiating
Step 1: Research
Whenever you’re getting into negotiations with someone, regardless of what the subject is, the first thing you need to do is research. If you’re buying a car, then you need to do research about the car dealership market, including the places where you’re not going to buy. When we help our clients buy a house, we do extensive research before proceeding even though we do this every day.
When you go in fresh, the opposite party has no idea what you know and don’t know, which can benefit you during the negotiations.
Step 2: Intel
Whether it’s from online resources, asking key questions, or other research, it's important to build a profile of the person you are going to negotiate with, as well as the company they work for.
For instance, an interesting strategy most people use thanks to the intel they’ve gathered is to negotiate with companies at the end of the month. Why? Because that’s when people are trying to meet their quotas and are willing to bend a little bit more than usual, so it’s a great chance to get a better deal for yourself.
We've also noticed patterns on foreclosure properties and know best "when" to approach them.=
Step 3: Plan a Strategy
Planning out and forming a negotiation strategy actually boils down to find 2 things:
- BATNA - the best alternative of the negotiation at hand. Knowing what your best alternative is will set the benchmark for a deal you would accept in this negotiation. It helps as a guide to "find the win".
- ZOPA - The Zone Of Potential Agreement - Negotiations are won by coming to an agreement. Without an agreement, there is no win. However, if you can recognize the zone, you can use your abilities to get to the far edge of your advantage within that zone.
These 2 indicators (the BATNA and the ZOPA), along with the research we previously did and the intel we’ve gathered are actually what shapes the whole negotiation process. They let us know when it’s smart to back away from the negotiation and when it’s a good idea to continue with them.
Step 4: Know the most, let know the least
Now that you've done your research and gathered your intel it's important to get your poker face set. The only thing more important than what you know is letting them know as little as possible about you, and that includes how much you know.
This creates leverage and is exactly what the mean when they say "Knowledge is Power."
Things to know once you get into a negotiation
Understand A Negotiation is Not a Fight
Many people tend to look at negotiations as a conflict between two sides, when in fact it’s quite the opposite. You should instead see it as two sides trying to solve a puzzle. Both are trying to find out if the lowest amount one side is willing to offer is compatible with the highest amount the other side is asking for, and try to meet somewhere in the middle where everyone is happy. In fact, great negotiators are such because both parties work to control the puzzle to solve it instead of trying to control the partner on the puzzle.
Understand time mechanisms
A mistake we’ve seen many do over and over again is rushing to answer to an offer, thinking that doing it later would be too late. But, the better thing to do is go through it carefully and analyze the content in it. What does the offer mean? What is the other party trying to get?
Sometimes, sleeping on it can make a huge difference and get you a different, better perspective on the whole negotiation but even a few minutes taken for additional research or a break to think can be a weapon. Think of how often a car salesman leaves the office during a negotiation to talk to the manager. This action affects the outcome by putting two against one and spending the break time working out a plan while the customer normally surfs social media.
So, to sum it all up, the most important steps of the negotiation are the research and intel that will help you find if the BATNA and the ZOPA exist, and where to find them. Once we have these, it’s important not to let the other party know what we found out during our research process. Meaning, keep that poker face at all times!
Once you’re into the negotiations, let time do its thing. Time is power, and stepping back to allow yourself to make the right decision will take away the pressure the other party might try to put on you and ultimately result in you making a better, more rational decision. In fact, if you’ve ever been through car negotiations, you might’ve noticed that the salesperson often leaves your side and comes back, later on, to ask about your decision.