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Real Estate

The 7 Rules of Power Negotiation

Negotiating is a part of living; we do it all the time. 

When you walk down a crowded street you negotiate the path you take.

A couple negotiates their relationship before and during the marriage.

Although you may not realise what’s happening, for example, you take out the garbage tonight and I will do the dishes.

Nowhere do we seem to need good negotiating skills more than at work where we negotiate with staff, clients, and suppliers.

And of course, negotiation is one of the skills developed by all savvy property investors.

Over the years I’ve noticed that some people are very good at getting terrific deals.

Most others simply get what the other party is willing to give.

What’s the difference?

The first group knows how to negotiate.

Where do people learn to negotiate successfully?

There seems to be no school of negotiating.

Those who are successful at negotiation become so by doing many deals, in other words, they learn from their experiences, but some just have a natural talent for it.

Over the years I have discovered a number of rules regarding negotiation.

If you understand these rules, this will help you become a Power Negotiator.

Rule No. 1 — Everything is negotiable

This does not mean you are always going to get what you want or win every negotiation, but you must remember that everything is potentially up for negotiation.

Rule No. 2 — Know what you want before negotiating

Always know the result you want – your bottom line –  before commencing negotiations.

It’s a bit like when you’re planning your holiday.

Firstly decide your destination  –  where you want to end up, then work backward to decide the best way to get there.

In negotiations and in life, if you don’t have a plan of your own, you’ll be part of someone else’s.

Rule No. 3 — Aim for a Win/Win negotiation

Win/win is created when we help another person to get what they want while we get what we want so that both parties feel they have won.

To achieve this:

  • Never offend the other party
    The secret is to try and establish what is on their agenda and in what order, in other words, what is most important for them.
  • Try and build a rapport with the other party during the initial stages of the negotiations. This will help you satisfy their needs by understanding what they really want, as explained in the next point.
  • When negotiating, try to look beyond the requests and demands of the other party and attempt to understand their real intentions and motives. Seek to meet this dominant, often hidden, need and you are well on the way to winning the negotiation.
  • Don’t assume that the items on your agenda are the same as those on the other person’s agenda. There may be one or two similar items on your lists, but the order may be different.

You can sometimes do this before the negotiations formally begin by observation and by asking questions and then listening carefully.

Although you are trying to create a win/win, don’t seek total approval from the other party.

Don’t fear rejection or be afraid to be seen as unreasonable, otherwise, you will give in to things you want and that’s not really a win/win.

Rule No. 4 — Treat Negotiating as a Game

When it comes to negotiations, you need to be involved but not too much.

If you are too emotionally involved, you will lose your perspective and make emotional rather than subjective decisions.

Like all games, you must understand the rules.

A skilled negotiator understands the structure and stages of negotiation.

If you play a game and don’t know the rules, how do you know when the game has begun, reached its midpoint, or neared its conclusion?

Rule No. 5 — Never believe anyone else is entirely on your sidemind

Trust yourself; you have your own interests entirely at heart.

As a buyer, would you go up to a seller, show your bank account, explain how desperate you are to buy the property, then ask the seller to tell you what you should offer?

If you are a seller, would you tell a potential buyer your absolute bottom line?

No sane person would do such things, yet everyday buyers allow others to make decisions for them.

These others could be an accountant, a relative, a friend, or even a real estate agent.

Yes, you certainly want to ask others for advice, but my point is that while these people may not consciously deceive or purposely lead you astray; everybody’s interest is different, each has their own goals and yours are always going to be different and sometimes conflict with mine.


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