10 Tactics to Help Negotiations

Negotiating is a key skill required if you are going to expand your business or career profitably.  Negotiations can be the reason a business or real estate investment cash flows or not.  So here are ten tactics you need to make a part of your tool box as you meet with vendors, employees, bankers, buyers and sellers.

1. Always meet with all principals you are buying from or selling to.  You waste time if you are meeting and talking with people who cannot sign the agreement.  You need to know the motivations and needs of the other party if you have to put together a creative offer.
2. Keep one of your principals absent.  You probably know the needs of your partner(s).  This tactic allows you to think about their proposals without commitment.  It allows you to commit with a contingency of your partners approval.  If the partner disapproves then you can come back to the table with more discuss.
3. Keep or create as many options as possible.  Maybe it is because I am a former Infantry Officer, but options keep you alive.  Both on the battlefield and in the investment field.  The Seller who has only one option has to take what the buyer is giving.  This is another reason to develop at least five exit strategies when you purchase a place.
4. Game plan all their possible options with your responses.  Again, this may be a fall back from my military days.  Pre-plan your options and responses based on the various directions the other person may present.  This keeps your emotions out of the negotiations and you in control.  This will also let you know when negotiations are really halted and when your creativity can keep the transaction moving forward.
5. Have the other side give the numbers and terms first.  This is why a buyer is often in a better starting position than a seller who has listed the property.  Once you have committed to a number it is hard, if not impossible, to move to a better position than your beginning one.  By forcing them to commit first you keep your options. 
6. Check your ego at the door.  Ego costs money; plain and simple.  If you go in with any ego, you immediately put the other team on a defensive or aggressively offensive posture.  Let them be the experts.  Defer to their experience, knowledge of the market or property.  Defer to their age…whatever it takes to make them feel that they know more than you.  This will endear them to you and want to help you get a good deal.
7. Be willing to wait.  There is a reason that many people become more patient as they age.  They became wiser.  Wisdom is knowing when to put the purchase agreement on the property immediately and when it is wise to wait.  Let the seller loose some options.  Realize that they can’t sell it for the terms they thought.  This makes them more flexible.  However, there are times when a property is already at 50-60% of market value and it will be gone tomorrow.  You don’t have to wait on all deals; just be willing to.
8. Know your walk away numbers and terms.  By knowing your walk-away numbers you eliminate the chance of you being swept away by the emotional excitement of the negotiations.  After we have invested hours of negotiations we feel that we “just have to get that property” to make our investment of time worth it.  That is when it costs us the most.  By knowing the worst numbers you will accept you can walk away and save yourself from disaster.
9. Keep track of all concessions made by both sides.  When we have invested time and countering offers over and over, it is easy to miss the fact that one side is giving more concessions than the other.  By writing each concession down as they are given and received, you can see if you are the only party moving toward agreement.  When giving a concession remember the phrase, “If I can do that, what will you do for me?”  That will force both parties to give at least equally.
10. Leave making them feel they won so they will work with you again.  You never know when you are going to deal with that person or party again.  The older I get the more I realize this is a small world.  What goes around really does come around.  Make sure both parties accomplish their goals in the transaction for that is what a transaction is.  A movement of both parties toward their goals. 

These are some of the top ten things you should remember when you enter negotiations of any kind.  Use them daily.  Practice them in all areas of life and you will become a powerful negotiator.