In today’s blog, we will be looking at negotiation tactics from the buyer’s perspective. Next week we’ll look at this from the seller’s perspective. We need to learn both sides of the negotiation formula in order to negotiate successfully! Check out my first two posts on negotiation tactics here and here.
Here are my 3 tips on negotiating as a buyer:
1. Never get emotionally attached to the item. The minute you start buying with your heart rather than your head, you’re in trouble. Buying emotionally clouds our judgment and makes it hard for us to consider waking away if a certain price cannot be agreed upon. I remember one time buying a beautiful, green convertible sports car. I was buying it purely to resell and make money. But the sun was shining (an all too rare occurrence in England!) and I saw myself driving around in that car: roof down, catching some rays! All of the sudden, I was buying emotionally, from my heart, instead of with my mind. My rational, business mind took the back seat and my emotional heart paid too much for that sports car. I enjoyed driving around for the day of sunshine, but I could have rented 20 convertible sports cars for the amount of money I lost on that deal! Maybe you just have to have that house or you need this one last item to complete your collection. Any type of emotional purchasing can be risky. I often tell people to sleep on a deal before making a decision. It’s amazing how differently you can feel about something after 12 – 24 hours. That time allows your head to kick in and you can come to your senses before you make a mistake. This is why people suffer from “buyer’s remorse”: they bought with their emotions and didn’t give time for their brain to kick in! Once the brain catches up, it’s too late.
2. Let the seller name the price. Sometimes there is no price on an item. Maybe the owner wasn’t intending to sell or maybe they were unsure of how much to ask. “Offers welcome” or “make me an offer” can be intimidating phrases to the potential purchaser. As the buyer in these situations, never be the first to mention a price. If you do, more than likely one of two things will happen. You will either offer too high a price and pay more than the seller was hoping for—which is good for them, but not so much for you—or you will make an offer far lower than the buyer intended. This could offend the seller and brand you a low-baller. It’s far better to ask the seller for a price first. When doing this avoid phrases like “How much are you hoping to get for it?” What someone is “hoping” for and reality are two different things. I’m “hoping” for a lot of things, some are completely unrealistic! Instead, use the phrase, “What’s the least you will take for this?” The seller already knows their low sell. They might have been hoping for $5,000 but the least they would take would be $3,000. That’s quite a difference and that’s before you’ve even negotiated!
If the seller refuses to give you a price at first then you may need to help them name their price. “I don’t know what it’s worth,” they may say. Truth is they have every idea what it’s worth, even if it is just what it’s worth to them. I would reply with, “You’re going to have to help me and at least give me a clue as to how much you want!” or I might reply with, “What type of offers have you gotten so far?”
If these two phrases fail then I would use the bombshell tactic! If something is worth approximately $10,000, but the seller has repeatedly refused to give me a price, I offer them a ridiculous amount, like $50. They then get animated and respond with something like; “ARE YOU CRAZY!” or “You must be joking, right?” with which I can then reply, “See, you do know how much you want, and it’s a lot more than $50, right?” Once the seller has finally given you their price, you can then decide if it is a purchase you want to continue to pursue or not.
3. Sell your position as the buyer. So many times I have made great purchases even though there were better monitory offers available to the seller. Why? Because I had more to offer than just the purchase price. I had a good position and I made sure the seller knew it. I remember getting a great deal on an SUV one time, simply because the seller had to physically move it that day. As the buyer I sold my position to the seller. I informed them that I had cash on me (no need to wait for financing or checks to clear the bank). I also told them I could take the vehicle immediately (no need to leave it parked for the buyer to return another time). This brought value to the seller. Even though they had been offered more money for the SUV, I was the buyer that brought the most value to the seller. This can be true with any purchase, from a garage sale piece of furniture that you can haul off immediately, to a luxury house that you can pay cash for and close in 10 days.
I once purchased an entire end-cap display of a particular collector children’s toy at Walmart. I called for the manager and asked him about these 100+ items that were taking up valuable space on his prime shelf location. He had already reduced them to 50%. I offered to take every single item right then and there if he gave them to me at a 90% discount. I even pulled 3 shopping carts in front of the shelves to show him I was serious. He accepted my offer, and I went on to sell those items online for 50 – 75 cents on the dollar, having only paid 10 cents on the dollar. You can bring value as a buyer in most situations. Before negotiating on an item, find out why the seller is selling and what their needs are, and then if you are able to meet those needs, “sell” your position as the buyer.
I’ve heard success stories from many people on using these three tips. How about you? Have you ever used one of these practices whilst making a purchase? Whether at a garage sale, online, in a dealership, etc. your negotiation tactics matter. Comment below and let me know what worked (or didn’t!) for you.
If you would like to learn more about the art of negotiation and how to make extra money through buying and selling, then take a look at Ashley’s course, Trash To Treasure. You can learn more about Ashley at his website: click me!