Negotiating Style Killing Your Deals?

If you change your style of negotiating, you can have less stress, happier clients and create great deals. Most of the Realtors you negotiate with try to win by making you lose, which is why it is called Win-Lose negotiating. Some commentators call it Zero Sum or Distributive, but win-lose gets the point across better. The other type is Collaborative negotiating, also called Win-win. If you can practice Win-win negotiating, you will be a much more successful Realtor, not to mention more popular in the profession. Here is the difference between the two.

Win-Lose Negotiating

In this style of negotiating the parties view the transaction as having a fixed amount of something, and the more one party gets, the less the other party gets. For example, there is a fixed size of the pie and if you get a bigger piece of the pie, your counterpart gets a smaller piece of the pie. In real estate, if the price is a dollar higher, the seller gains an additional dollar and the buyer loses an additional dollar.

In this type of negotiating, you “play your cards close to your chest” and do not disclose anything important about your situation. Why? Because everything you say will be used against you, so that you get less of the fixed amount in the negotiations. On the other hand, you want to learn as much about your counterpart’s situation, so you can use that information against them to get more of the scarce commodity. The best way to visualize this style is “My gain is your pain” according to The Power of Nice by Ron Shapiro and Mark Jankowski.

Win-Win Negotiating

You will live longer if you learn Collaborative Negotiating. It is frequently called Win-win, a term that is used way too much, because it implies that everybody wins equally. The perfect result is for you to feel you got a big Win and feel that the other side got a littler win while the other side feels they got the big Win and they think you got the little win.

This type of negotiating is characterized by questioning and listening, creating trust, avoiding hostile emotions and concentrating on ways to get mutual satisfaction. The first stage of this type of negotiating is for the parties to cooperate and exchange information, so they can create more value in the entire deal. The second part of this style of negotiating is for the parties to claim their share of the value.

To engage in this type of negotiating it is important that each side provide useful information about their circumstances and explain why they want to make a deal by discussing their real interests honestly. This is dramatically different than Win-Lose negotiating, where sharing information can hurt your position. Each party needs to explain what they prefer among the various factors in the negotiations. Finding additional terms that would provide value to the other side enhances the ability to make a deal. With this additional information, the goal is to create the best result for both parties by dividing up the additional value items. When you realize that your counterpart’s points of value are not the same as yours, you can find something that is more important to them than it is to you. So, one of your primary efforts is to concentrate on what you can concede to your counterpart that will not damage what you want out of the agreement. In other words, you concentrate on satisfying your counterpart’s needs. This style is different from Win-Lose negotiating, where the concentration is on what you can take from your counterpart.

Watch A Video Of Tim and Michael Krisa, That Interview Guy

This discussion of the difference between Investigative (Win-win) negotiations and Win-Lose negotiations is the subject of an interview Tim did with Michael Krisa, That Interview Guy.  Click on The Interview so you can see how Tim explains it in person. 

What Do You Do Now?

If you try to change to Win-win without completely understanding the process you will look like the farm boy negotiating with the street gang. They will take your lunch. Register here  to join the Real Estate Negotiating Institute and get full access to a step by step procedure for leaning this type of negotiating.   You can also pre-order Create A Great Deal, The Art  of Real Estate Negotiating by clicking here, because the book contains detailed descriptions of how to change to this better style of negotiating.  I hope you learn how to Collaborate.