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Negotiation Skills You Need To Know

One of the most important negotiation skills you can develop is to get in the habit of finding the other side's deadline. Time is of the essence. It even says as much on most business and real estate contracts. What does this mean in negotiating? It means that whoever controls or understands the elements of time involved in a negotiation has the better position.

Many years ago I was looking at a truck for sale. I asked the owner why he was selling (always a good idea). He told me that the IRS was coming after him and he needed to sell the truck by the weekend (It was Tuesday). When do you think you would be able to negotiate the best price on the truck? Maybe right now, but certainly on Friday if the truck is still available. On Friday he would be desperate to get what he could from the truck before it was seized by the IRS.

Using Deadlines As A Negotiation Tool

This guy wasn't using good negotiation skills. He gave away too much information. More specifically, he gave away his deadline. One of the most important things to understand in negotiating is deadlines. The two things to remember about them are: 1. Don't give away your deadline(s), and 2. Find the other side's deadline(s).

Find out whatever you can about any relevant deadlines. Sometimes there isn't a clear deadline, or there are several deadlines for different parts of the negotiation. Whatever the case, the more information you can gather about those deadlines, the better.

How do you use that information once you have it? The crudest method is to simply delay and wait until the last moment to negotiate. This only works if the other side doesn't walk away, and if your own deadline permits it. It also requires that there are not others who can take your place (as is clearly the case with a truck for sale - it might not be there Friday).

A bit of sophistication is required to use this information effectively. You may want to start by identifying what is most important to you in the negotiation. For example, if you are buying an apartment building, is the price or the terms the crucial element for you?

Let's assume that price is most important to you. When you wrote the offer, you put some price on it, but you have inspections and other contingencies that allow for everything to be renegotiated. The process of inspections and negotiations ties up the property, so your competition is excluded for the moment. Then you learn that owner really wants to sell by the start of the school year, because he will be moving with his children.

Work on everything else in the negotiations except the price. Have inspections done, agree on what will be included with the property, etc. As the seller's "deadline" approaches, he will be getting anxious to close the deal. Then you let him know you're ready to close quickly. Of course, you'll need the price adjusted due to the results of the inspections.

At this point the seller has the choice of throwing away the whole deal. This means starting over, and not moving when he wanted to. Alternately, he can be happy that he got what he wants most - a quick close. This means giving you your price.

This points up the importance of getting information on the other's deadline, but also the importance of not revealing your own. When I was a real estate agent I heard the story of a man who sold his property for a large profit. He had to pay ,000 in capital gains taxes unless he rolled the money into another property, as a "title 31 exchange." He had 60 days to close on the new property.

Imagine the abuse he would open himself to if, with ten days to go, the seller learned of his deadline and the cost of the buyer missing it. He could threaten to delay closing unless the buyer paid ,000 extra for some old coin-operated washing machines, for example. Overpay by a few thousand, or lose ,000. What do you think he would do?

For an everyday example of using deadlines, try buying your next car towards the end of the month. Many times there are quotas that dealerships want to meet for the month, and bonuses that salesmen get for monthly volume. Saying "I'll think about it and return on Thursday," (or whatever day is the first of the next month) can have them dropping the price fast. It's always good to practice your negotiation skills.

About the Author: Steve Gillman wrote the e-book Negotiation Skills And Techniques Of Master Negotiators. For more information on this and other useful insider reports, visit:

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