It’s been said that life is one big financial negotiation. Getting a great deal on your rent, for example, negotiating with your boss for your salary or purchasing a new car are all negotiations that most people go through at one point or another in their life. Even small negotiations like disputing your smart phone bill, purchasing new furniture or buying something at a garage sale can be challenging. With that in mind we put together a blog today with some excellent tips for negotiating all sorts of financial situations so that, when you’re neck deep in talks, you always come out ahead. Enjoy.
First, it’s vitally important to Know Your Bottom Line. If you walk into a financial negotiation without knowing what your bottom line is, there’s no telling what the final price you pay will be. Even more important is to stick to your bottom line and, if you don’t get it, be prepared to walk away. This is one of the best ways to prevent making a purchase that you regret later.
Controlling your emotions is also important because the most levelheaded people are usually the ones that are the best negotiators. Keep in mind that it’s “just business” and do your best to not take anything personally that the salesperson, vendor or whoever is saying. Also, unless you’re really good at “bluffing” you should definitely be careful and be comfortable with any claims or offers that you make just in case the person selling to you decides to call you on your bluff.
Perform your due diligence. Call this “studying”, “homework”, “research” or what have you, before you go into any situation where you will have to negotiate you should already have done said homework and have at least a modicum of knowledge about the product or service that you’re about to purchase. For example, if you’re going to be buying a new home it’s vital to know what the average price of a new home is in the town you wish to buy. The same thing goes for automobiles, rental prices on apartments and even small electronic appliances.
Comparison shop. As mentioned above, due diligence is important. Part of this means comparison-shopping to find out what other vendors, stores or dealers are offering for the same exact product. Remember to always “compare apples to apples” so that you can look at the numbers alone rather than having to try and figure out if the price you’re getting is good for the different options or features that you want.
Make your First Offer a Strong Offer. Whatever offer that you make first, you want to make sure that it’s not too high or too low and leaves you plenty of from for negotiation. If you start with an offer that’s too high you will obviously end up paying more than you might have had to but, on the other hand, if you start to low you may just scare the seller, dealer or vendor away. When it comes to negotiating a salary at work this is very true as if you ask for too much money you might possibly price yourself right out of a job. Keep in mind that no matter what you do you should always present yourself as a serious buyer so that the seller is willing to take the time and energy to negotiate with you.
What do you Bring to the Table? Some negotiations require that you actually have things that you can offer back to the seller or to the person making the offer. When it comes to negotiating your salary, for example, having a particular skill (or set of skills) will mean that your prospective new boss is more likely to hire you. Being able to prove to a prospective landlord that you are a quiet tenant who pays the rent on time and doesn’t bother neighbors can also be very valuable and thus having a letter from your last landlord attesting to those facts is a must. If you are purchasing a new car having a substantial down payment can be extremely helpful as well.
Don’t Show You are Cards but, if necessary, explain your situation. While it’s never a good idea to reveal everything, explaining your situation to the person you are negotiating with sometimes can help them to “meet you halfway”. If you are buying a home, for example, you may wish to go into negotiations with a list of things that you know will need to be fixed, renovated or replaced.
No matter what you do, don’t simply accept what the selling party is offering or telling you but rather challenge anything that, at least on the surface, doesn’t make sense to you. Asking questions, doing your due diligence (as we mentioned) and keeping your wits about you and your emotions in check will ensure that, when everything is said and done, whatever purchase you make you’re happy with the end result.
One last note is simply this; always remember that you can walk away from any “deal” for any reason you choose.