Exploring Negotiation Tactics as Buyers Regain Some Leverage

[Collin Van der Veen]

In July, US home prices declined by 0.1% month-over-month, representing the first drop in the Zillow Home Value Index since 2012.

The upshot?

Real Estate buyers in many markets have regained negotiating leverage.

After reading Chris Voss's “Never Split the Difference,” below are 6 of the most important principles buyers and sellers can arm themselves with at the negotiating table:

1.) Mirror your counterpart:

In a negotiation, mutual respect is everything. By repeating the last 3 words (or most important 3 words) of what your counterpart has said, you will cause them to elaborate, deepening the process of connecting and building rapport. Underlying this tactic is the simple principle that people naturally fear what is different and take comfort in what is similar.

2.) Label your counterpart’s emotions:

Studies have shown that when negative thoughts are spoken aloud, the mental processing of those thoughts moves from the part of the brain that generates fear to that which governs logical thinking. Once you understand the position your counterpart is in, repeat their emotions back to them with a neutral statement of understanding (“it seems like [x]”, “it sounds like [y]”), and then give them space to elaborate.

3.) Don’t fear “no”:

“No” is the starting point for authentic negotiation. At the end of the day, everyone is driven by two primal urges: the need to feel safe and secure, and the need to feel in control. If you satisfy those desires in your counterpart by getting them to answer “no” at the beginning of a negotiation, you have a foot in the door.

4.) Use calibrated questions to create the illusion of control:

Open-ended “how” or “what” questions have the power to progress a negotiation without eliminating your counterpart’s sense of control. They are ways to disagree without being disagreeable. Instead of explicitly saying “no” to a proposal from your counterpart, for example, you can respond by saying “how am I supposed to make that work?”

5.) Leverage humans’ predictable irrationality:

Certain tactics, such as the creation of artificial deadlines, or the establishment of extreme anchor values, can cause people to respond in an impulsive and irrational manner. Likewise, people will take a greater risk to sidestep a loss than to realize a gain. Make your counterpart aware that inaction is potentially costly.

6.) Find the black swan:

Black swans are pieces of information that, if discovered, would change your whole approach to negotiation. While it is important to be guided by what you already know, it is imperative to not let those preconceived notions blind you to what could potentially be discovered. One’s listening and calibrated questioning should thus be geared toward uncovering, adapting to, and exploiting key unknown variables. After all, the world did not demand an iPhone from Steve Jobs - he uncovered that need - society’s black swan - without us even knowing we needed it.