Critical Information

There is always some critical information that will give you the most negotiating power. Try to gather it prior to the start of negotiations, but if that isn't possible, continue the information gathering while negotiating. Below are some of the most important items, with some tips on how to get the information, and how you can use it.

Deadlines

The easiest way to get this information, is to ask. Not all negotiators are wise enough to withhold this, so at least try a question like, "When were you hoping to get this sale done?" and then follow up with other questions, to see if it is a real deadline or not.

Talk to other people to learn deadlines too. If you are buying a house, the seller may not reveal her deadline, but perhaps you can get a clue from her husband or a neighbor even. If you are negotiating a large contract with a supplier, your attorney may learn from theirs that they want to sell the company by the end of the fiscal year, and they need your contract in place to get top dollar.

Use any ethical means you can to gather critical information about deadlines. If you know that the buyer of your apartments complex is buying it as a 1031 exchange, and has already sold his other property, you have an idea of his deadline. You can also mention possible closing dates, just to gage his reaction.

To put your information on deadlines to best use, re-read the chapter "Time." Basically, you want to put important issues in the negotiation towards the end, so the time pressure will be motivating the other side to make concessions.

Motivations

Learning the motivations of the other party is one of your most important goals as a negotiator. Try to learn their motivations for every aspect of the process. In other words, if it is a sale, learn not just why they want to sell, but also why they want to sell it a particular way, why they want the price they're asking, what's important to them when making decisions, and more.

Learn personal motivators, too. Are they more motivated by what they read or by what they hear? Are they more motivated by the promise of profits, or by the fear of failure? You can listen for clues to these. A man who continually says, "I see" will probably be more visually oriented and motivated. "I just don't want any problems," indicates they are motivated to avoid loss and protect themselves more than by positive goals.

Once you know some of their motivations, you can decide how to use that information. I had a friend who was easily motivated by any talk about how much money could be made in an investment. Many people will be more motivated by telling them how safe an investment is. Use their own motivators, and even their own words. If they say "I understand" a lot, then start a statement with "I think you understand why..."

Of course it is even easier to use the specific motivations involved in the negotiation. If you learn that a buyer of your house wants to be able to tell his friends what a great price he got, push hard on every other area. Get the terms you want, have him pay all the closing costs, etc. Take the attitude that if he'll give you what you want, he'll get what he wants.

A little more sophistication is called for most of the time, of course. You can't just say "Oh, you want that? Then give me this." Negotiate hard in all areas, but let him "win" the concessions he wants from you, and downplay what you have won. You'll both be happier in the end.

Price

Not all negotiations involve money, of course. You can use your negotiating skills to get the kids to clean the house, after all. Most negotiation outside of the house will have a money element to it, though, and gathering relevant information on that is crucial.

Always get an idea why the price is where it is. If you are the one selling, you already have that information, of course. In that case, try to have enough information ready to justify your pricing. If you are on the buying end, find out how the seller arrived at his price.

There are many elements in any large deal that play into the price. I once offered an investor a small rental I owned for two different prices. One was 15% higher than the other. He took the higher price. Why? Because I sold the property to him with virtually no money down ($1,000) on terms that allowed him to have cash flow from day one. The other price was if he wanted to pay cash. I knew he wanted to conserve his cash, and I wanted the interest.

The point is to be sure you look at all the factors that go into valuing something, whether it's real estate or a contract for cooking oil. Altering these factors can alter the price dramatically. Learn what you can about anything that might affect price.

If you were to buy a new car, for example, you might want to use one of the online services like Consumer Reports' website, in order to know what the dealer is actually paying for the car. You would also want to see what the dealer cost is for the options. With this information, you can more effectively negotiate the lowest price, without going so low that they can't say yes.

By the way, effective negotiation doesn't mean always trying for the lowest price possible. If you are contracting with a cleaning service to clean your buildings every week, you want quality work too. In fact, you may want to consider the motivation level and trustworthiness of a vendor that is being chronically underpaid by your company.

Gather that critical information, research the numbers, and understand what they mean.

Continues here... Key Information - More of the key things you need to know.