Application of principles from Never Split the Difference

[Andre Chambers]

Hi BP!

Just wanted to share a recent success story of my girlfriend in negotiating. I recently read Never Split the Difference by Chris Voss on the recommendation of a member. Instantly top 10 book for me as far as principles I can apply on a daily basis with deals and life in general. My gf read it, loved it as well, then finally started looking hard for a first property to house hack. After a lot of analysis and showings, she decided on a recently remodeled 2-family listed for 220K. 

We wanted to apply one of the price negotiating strategies from the book on this deal just to try it out in a real world situation. She gave her realtor a heads up and detailed exactly what she planned to do and why she was doing it. He was EXTREMELY skeptical and gave us sound reasons why she shouldn't follow the strategy. We adjusted the numbers slightly for this particular instance but kept the spirit of the strategy the same. 

Her realtor told us that homes were selling at 97% of list in that area in the last few months and since this was remodeled, he doubted the seller would budge much on price. Having that in mind, getting the property for ~213K would be "normal."

Glad she stuck to her drive! After an initial offer and 3 counter offers, she's under contract for it for 195K. 12.4% down from list in an area where comps said 3% off list was expected. This isn't the biggest deal of the year, but it shows what sticking to a sound logical plan can produce. I'm very proud of her and how she handled this. 

I think Never Split the Difference was recently brought up in a show after we read it, and we were glad it's being shared more.

All the best

[Molly Ivey]

I highly recommend this book as well! It is full of useful negotiation tools as well as interesting stories! 

Some of the take-aways that can be applied to real estate negotiation: 1. Do your homework on the other side, the more you know, the better. Find out what their main motivation is. 2. Be likable. Don't come across aggressive or cocky. If they like you, they will want to work with you. 3. Act indifferent to the final outcome, do not let emotions get involved. 4. Let the other side say "No". Below are my notes from the book: 

Negotiations Notes:

Get the other side to talk, listen for their wants/needs.

Negotiation is not an act of battle, it’s a process of discovery.

Slow it down, if you negotiate in a hurry people can feel as though they aren’t being heard and that undermines any rapport or trust. The passage of time is one of the most important tools for negotiation. When you slow it down, you calm it down.

You’re most powerful tool is your voice (inflection/tone). Use a positive, playful voice - smile

Mirroring establishes trust, repeat the last few words that the other said. The other will then elaborate further to sustain the process of connecting.

Being right isn’t the key to successful negotiation, having the right mindset is.

1. Use late night FM DJ voice
2. Start with “I’m sorry”
3. Mirror (as if you don’t understand)
4. Silence (at least 4 seconds after mirror)
5. Repeat

Don’t feel their pain, label it.

Shortcut to intimacy: recognize and labeling their emotions.

“It sounds like... it seems like...it looks like...” and then go silent and listen.

Acknowledge the negative emotion or any tension in the situation - it diffuses it.

Accusation Audit: start negotiations by acknowledging any negative thoughts or labels they may have for you. “You may be thinking/feeling that I am...”

“What else do you feel is important to add to this?”

No communication is always a bad sign.

Don’t fear hearing “No", it gives the other person a feeling of power and control, they will be more open to hearing your side once they have said it. It can be the beginning of negotiations. You can even verbalize to the other person the possibility of saying no.

Then ask open ended/ solution based questions:

“What about this doesn’t work for you?”

“What would you need to make it work?”

“It seems like there’s something here that bothers you?”

Everyone is driven by 2 primal needs:

1. To feel safe and secure
2. To feel in control

Give them those and you’re in the door. Letting them say “no” upfront fulfills the 2 needs. Pushing people to say “yes” over and over makes them defensive. Read “Start with no” by Jim Camp

If emails go unanswered send them “have you given up on this project?” It’s a great ‘no’ orientation question and implies loss, they will reply.

Negotiation is not about beating the other side with logic or brut force, it’s about asking questions that open paths to your goals.

When the pressure is on you don’t rise to the occasion, you fall to your highest level of preparation.

1. The goal: Think through best worst case scenarios but only write down a goal that represents the best case. People who expect more and articulate it, get more.
2. Summarize known facts that led up to the negotiation. Why are you there? Why are they there? What do you hope to get out of the negotiation State accurate facts to elicit a “that’s right” from the other person.
3. Prepare 3-5 labels to perform an accusation audit.