Before the Negotiation
Before you enter any kind of formal negotiation, make sure you know exactly what the expectations are. It helps to put down on paper exactly what you will do and accomplish. You should map out every scenario out to your client, but remain optimistic.
Also finding potential weaknesses in the opposing part is ideal, to negotiation tactics. Knowing the opposing’s weaknesses shows that you have done your homework and it shows you have valid information to back up your points, or why the negotiation should lead in your favor. This may also help both parties to find a middle ground. Another tip, is to come up with a list of reasons why your proposal would be beneficial to the opposing party. For example, one Realtor may bring up that their offer is more favorable, although it is offering a lower price, it is an all-cash offer, as opposed to a riskier financing. By specifically laying out the advantages the negotiator increases the odds of getting the deal done in their favor.
Ideally, each party should state exactly what their objective is coming into the negotiation. This allows each party to understand where the other stands. It also establishes a basis for a give-and-take conversation. At this point, each party may then offer its fall-back proposals and counter proposals in order to hammer out a deal.
Body language analysis can help you to understand how the negotiation is going. Was your proposal well received? Positive signs include nodding of the head and direct eye contact. Negative signs include folding of the arms (across the chest), aversion of the eyes or a subtle head shake as if to say “no”.
Negotiation by phone, can be a little more difficult, because body language can not be determined. This means that the negotiator must do his best to analyze his counterpart’s voice. But this also means, their is less emotion and you don’t have to sit face to face with one another, and makes it easier to stand your ground. As a general rule, extended pauses usually mean that the opposing party is hesitant or is pondering the offer. However, sudden exclamations or an unusually quick response (in a pleasant voice) may indicate that the opposing party is quite favorable to the proposal and just needs a little nudge to seal the deal.
Here are some tips for negotiations done through the mail (such as residential real estate transactions):
- Words or phrases that leave ambiguity may signal that a party is open to a given proposal. Look specifically for words such as “can”, “possibly”, “perhaps”, “maybe” or “acceptable”. Also, if the party uses a phrase such as “anxiously awaiting your reply” or “looking forward to it”, this may be a signal that the party is enthusiastic and/or optimistic that an agreement may soon be reached.
- When the opposing party makes an initial offer or a counter proposal, see if you can incorporate some of those ideas with your own and then ink a deal on the spot. If compromise on a particular issue is not possible, propose other alternatives that you think would be favorable to both parties.
- Finally, while all agreements should be sealed with a hand shake, a more formal contract memorializing the negotiation is a must. To that end, have an attorney draft a formal contract soon after the negotiation process is completed and make certain that it is signed by all parties in a timely manner.
No Agreement? No Worries
If an agreement cannot be reached in one sitting or phone call, do not panic. It may take sometime for both parties to think about the offers on the table. Leave the door open for future negotiations or plan another meeting, this will come across as though you sincerely believe that a deal can be worked out and you are willing to work to make that happen. Maybe all it takes is for the party to realize that there are no other offers or that your party has provided the best possible offer. Regardless, never under any circumstances, burn your bridges.