Mastering negotiation: Tips and strategies for winning deals

In real estate, effective negotiation is one of the skills agents need to deliver to their customers. It’s important for both buyers and sellers to know that the agreed-upon deal will give both parties the best outcome for their transaction. However, agents aren’t the only ones who need to hone their negotiation skills. According to Santa Clara University, business owners, in general, need to know how to negotiate, which is a fundamental skill.

Negotiation tactics can be uncomfortable if you aren’t sure how to tackle them successfully. It takes practice, preparation, and confidence, but anyone can master them. If you’re a business owner, I encourage you to take the time to get comfortable with them. Here are some common negotiation tactics you should know to help you win deals.

You may be familiar with anchoring already, which is where a person makes an initial offer or suggestion that serves as a reference point for the rest of the negotiation. Often, that first suggestion sets the tone for what is acceptable, and parties make subsequent readjustments based on that initial number. If you have to adjust based on the anchor, be sure to speak up and counter with a more realistic number if you believe it to be off in any way. If you’re starting off, be sure to be reasonable, too, because anchoring should set the stage for a realistic compromise and not insult the other party. Just don’t give anything away, either.

With mirroring, you are very literally mimicking the behavior, language, or body language of the other party to build rapport and establish a connection. While it may seem strange initially, mirroring is a beneficial technique for creating a positive atmosphere that makes negotiations more successful. Be sure to listen actively and to match the person’s tone or body language without overdoing it. The subtle cues can help a person feel heard and appreciated.

Silence can be a powerful tactic, as it pressures the other party to speak or make concessions. It can also be used strategically to signal seriousness or to encourage the other party to reveal more information. The key is to listen actively and observe to fully process what you’re hearing as part of the negotiation. Silence also gives an air of authority and power to those who can master it. If you put it to the test and practice it, you can easily learn how to embrace it to create more powerful negotiations.

You may already be aware of “the nibble,” which is when a negotiator makes small additional demands or requests after the main terms of the agreement have been settled. These additional requests may seem minor on their own but can add up over time. Nibbling is common in car sales and retail stores where add-ons like extended warranties or maintenance packages can drive up the cost of a purchase. Often, nibbling happens when a potential buyer’s barriers are down, and they’re ready to be done with the negotiation. If you find yourself on the “nibbled” end of the deal, don’t be afraid to try some of the techniques listed here to make counter offers that won’t cost you even more.

Ultimatums like “take it or leave it” or “that’s the best I can do” are often successful negotiation methods for those who use them. It’s a threat to end the negotiation, where one party says they will walk away from the deal altogether if the other party does not meet certain demands or conditions. However, if you come across this type of negotiation tactic, it may be helpful to approach it more positively by approaching it with more positivity and asking if there are other options available. Often, instead of threatening to walk away, parties that compromise can find mutually beneficial solutions.

Framing in negotiations is how you present an offer or how one is presented to you. Framing can create the perception of the negotiation by presenting information or issues in a particular way, and it can influence how the other party interprets and responds to the negotiation. It’s smart to offer three options that help you better understand the other party’s priorities while avoiding risk paralysis. In addition, you could consider matching framing with anchoring to position a secondary offer against a higher offer that seems more realistic for a potential partner.

In complex negotiations involving multiple parties, building coalitions with other negotiators or stakeholders can increase leverage and influence outcomes. Coalitions may include labor unions, associations, or other groups that can help you get the best outcome possible. For example, in real estate, the Home Builders Association can negotiate together, as can organizations throughout any number of professional groups. Getting organized as a group can lead to powerful negotiations.

Introducing time pressure or deadlines into the negotiation can create a sense of urgency and prompt concessions from the other party. While deadlines can be good at encouraging us to finally make a decision, often, time-pressure situations can lead to poor decision-making for the sake of hitting that deadline. If you’re struggling because of a deadline, don’t be afraid to neutralize a deadline or test whether you can extend a deadline to make it work better on your schedule.

Good negotiations force you to learn unspoken cues, how to communicate better, how to stay calm, and how to persuade. It’s a great skill to practice and hone as a business leader. Don’t be afraid to learn from unsuccessful negotiations so you can do better in the future. Every interaction is a chance to practice, learn, and grow.

Jim Allen is a business leader and entrepreneur who has built one of the top-producing real estate groups in the Triangle. He is President of The Jim Allen Group, which is consistently named one of the top real estate teams in North Carolina and even North America.