If you want to have success in a booming property market, or in just about every other circumstance that life throws at you, knowing how to negotiate is key.
Transcript:
Welcome. When was the last time that you had to negotiate something important? What do you think and how did you feel before, during and after the negotiation? Was it stressful? Were you anxious? And did you achieve your outcome?
As the country is currently in the throes of a once in a generation property boom, the quality of your negotiation skills will make or break your ability to secure the right property in the right location at the right time, as well as your success in just about every aspect of your life. So to help you with this over the next few weeks, I’m going to run a special Bush Bite series that will discuss and unpack the science and the art behind negotiation.
So let’s kick it off, because every one of us is negotiating every day. It’s just that we might not be aware of it. Every interaction where we want to get something involving others, is a negotiation. So one of your core skills to achieve sustainable success in any endeavour is to become a good negotiator and to be able to influence others in a positive way to get what you want or to achieve the best possible outcomes.
Now, there’s a lot to share on the art of negotiation. So we’ll start the series with a look at some general principles, and then given the rare window of opportunity that’s available to secure good quality property during the current boom in values across Australia, over the next few weeks will gradually drill down into some clever negotiation tactics that will help you secure a property in a high demand market. The good news is that these negotiation approaches can be utilised in any negotiation situation that you find yourself in. So the first and most important step is to change your outlook on negotiation. As renowned negotiation expert Margaret Neale reveals, one of the biggest challenges that we face in negotiations is that we view negotiations as a battle, and that battle is characterised by “I’m going to try and get stuff from you that you don’t want to give me, and I’m going to try to keep you from getting my stuff.” If we view negotiations like that as a battle, we’ve already got a problem.
Neale suggest that what’s more important is that we look at negotiations as an opportunity for collaborative problem solving and looking for a solution that makes you and them better off, better off than your alternatives and better off than your status quo. Because there’s a single control in negotiation, I can’t force you to say, yes, all I can do is present proposals where you believe it’s in your best interests to say yes and so once I that perspective on negotiation, which highlights the importance of the other party as well as me, so many more opportunities and potential win win solutions start to open up. This can be for any situation, whether it’s a new job and you’re trying to negotiate your terms of employment, whether you’re trying to buy something, when you’re in a meeting, or it might be something as simple as deciding with your partner who’s going to take the dogs for a walk on a cold, dark, rainy morning.
Neale also reiterates that you need to focus on solving the problem, not on winning the battle. Because if you find yourself in a battle and in a power struggle, in the negotiation, you’ve already lost. The key is to being able to solve problems in a negotiation is to understand as much as you can about who you’re negotiating with, what motivates them and what will influence them to move down that path of agreement with you of their own volition. Remember that in a negotiation, goals are important and we absolutely need to know what a good deal looks like for us. But we also need to have flexibility in how we achieve that goal. We need to remain open to the opportunities and explore often unexpected pathways to go with the flow and to see where it leads you to your desired outcome. In this regard, you need a GPS, not a rigid recipe. And for me, this is a lesson that I continuously learn and relearn because too often I choose a path to my goal because I’ve chosen it, not because it’s necessarily the right one. So in summary, changing your outlook is a key first step to successful negotiation. Now the next foundation stone to successful negotiation is the importance of building good rapport. In this regard, retired FBI hostage negotiator Chris Voss provides some innovative negotiation approaches in his great book, Never Split the Difference. Voss sums it up beautifully when he says that negotiation is the art of letting the other side have your way. And how do you do that? Well, we all have two years and one mouth and we need to use them in those proportions. So we need to ask questions and then listen, from the outset, you should continuously ask questions and make affirming statements that allow the other party to talk freely.
In this way, rapport grows, trust develops, and you gain a much greater understanding of exactly what their needs and preferences are so that you can then create solutions that satisfy them as well as you. It’s about building emotional equity and what Voss calls ‘tactical empathy’. In simple terms, people prefer to do business with people they like. So, if the other negotiating party gets to know you and like you, they’re more likely to trust you and then, more likely to negotiate favourably with you. Magic happens when you ask questions and provide reassuring prompts that allow the other party to come up with solutions that they feel are their idea, that are really in alignment with what you’re trying to achieve.
In this regard, the three main drivers of a negotiation are hopes and dreams and certainty and trust. So let’s start with hopes and dreams. Most negotiations are about helping you and the other party to fulfil your hopes and dreams. It’s about how each party imagines what life is going to be like when they negotiate those things and have their lives and well-being begin to improve. In this respect, most negotiations are emotionally driven, and the bigger the perceived value and investment, the bigger the emotional investment and the expectation, which tends to cloud rational judgement and gets in the way of adaptive decision making. I found that the best way to avoid this, is to get others to negotiate on my behalf. In the property buying context, this is about getting an independent buyer’s agent to act for you, for example. The second key negotiation driver is uncertainty. Successful negotiations are about eliminating or minimising the uncertainty for all parties. Uncertainty and fear of the unknown generally results in emotionally driven responses and the instinctual fight or flight reactions that can often shipwreck negotiations.
So the key is to eliminate uncertainty with good, clear and regular communication on who is doing what, by when and why. This means that in addition to finding out as much as you can about the other party, you also share the right information about yourself that’s going to be conducive to the outcome of the negotiation.
The final key negotiation ingredient revolves around trust. How can you be trusted? How can you trust the other parties? Well, as discussed in my book, The Freedom Formula, and outlined in detail in Charles H Green’s groundbreaking book, The Trusted Advisor, trust is built on the integrated combination of four key criteria, which are credibility, reliability, intimacy and self-interest. Now, breaking these down, credibility is what someone has said and done. Reliably is someone repeatedly doing what they say they’re going to do. Intimacy is feeling comfortable with someone, their openness and honesty. And self-interest is the degree of impartial independence versus the level of vested interest of both you and the other parties involved. And this is often the most important ingredient.
Now there are two simple yet proven and powerful techniques that you can use in tandem to build trust with almost anyone you meet. But you have to wait for next week’s Bush Bite to find out what they are. So to summarise the negotiation discussion today, changing your outlook is a key first step. And the three key drivers of successful negotiations revolve around hopes and dreams and uncertainty and trust. And remember, great negotiation is actually great collaboration and collaboration requires trust between two people.
Next week will be building your negotiation tool kit by discussing, mirroring and labelling along with perceived power.
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