Sometimes knowing what not to do is just as important as knowing the right things to do. This is definitely the case when it comes to negotiating. I think people get nervous about saying the wrong things during a negotiation fearing that all the negotiation tips they learned before will be wasted. You don’t need to have a background in sales to be successful during a negotiation. In fact, you can do very well in almost any situation if you remember these four warnings about negotiating. 1. Don’t Fall For Their Anchor What’s an anchor? It’s the starting offer that’s designed to make you adjust your expectations. Usually an anchor is set by the first person to set a price. For example, let’s say you’re buying a used car . The seller says, “I want $8,000 for the car.” They’ll go on and on about why it’s worth that much in an attempt to give their anchor more credibility. They want you to think its value is definitely close to that anchor price of $8,000. But you won’t be fooled because you can (and should!) set your own anchor. I hope you’ve come prepared and know the going rate and what you want to pay for the car, so set your anchor at least 20% below that. If similar cars are selling for $6,000, and you don’t want to pay more than $6,000 for a car, set your anchor at $4,800. Yes, the seller will probably gasp, but you should too because they are going to try to set an anchor higher than the average price. Why shouldn’t you do the same! 2. Never Give Your BATNA BATNA is an acronym for the phrase Best Alternative To a Negotiated Agreement. It’s basically your ‘fall back.’ What do you have to go back to if the other person can’t reach an agreement with you? Leave your BATNA out of the discussion! In most cases, it’s not the other persons business to know what you have as a backup. They may be asking in friendly way, but you don’t want to jeopardize the deal you can work up by sharing a fall back option that may be of lesser value. Does that mean it’s OK to lie during a negotiation? Of course not. You don’t ever need to lie in a negotiation to get ahead. It is possible, however, to hurt yourself by sharing details that aren’t the other person’s business to know. Keep your alternatives to yourself and keep the conversation focused on the negotiated item, not other things. 3. Don’t Negotiate Against Yourself How do you negotiate against yourself? It happens most when you talk too much and end up lowering the offer before the other person had the chance to bring you down. There’s a verse in Proverbs that sums up this point perfectly: Even a fool is thought wise if he keeps silent, and discerning if he holds his tongue. -Proverbs 17:28 Silence is your friend during a negotiation. Yes, silence can be awkward and uncomfortable, but those two things can work in your favor during a negotiation. In many cases, being quiet will cause the other person to want to break the silence and come up with a new solution, many times negotiating against themselves. 4. Never Feel Obligated Let’s face it; we can’t always control a desperate situation. Sometimes you’ll be in a position where your vehicle completely died and you need to buy a different car. You might be in need of a place to live so you feel pressured to find a house fast. The problem with negotiations is that you often need to make a decision because of the situation you’re in, but you should never feel obligated to close a deal because of a scare tactic. We see words like “limited supply only,” “one day sale,” “year end clearance,” and it’s easy to feel like we’ll miss out if we don’t act. Don’t let the one liners keep you from focusing on what you really need. Try to filter out the marketing tactics and never feel like you owe it to a salesperson to commit to a deal. Even if you’ve spent an hour or two of their time, you don’t owe them anything. Stay on track with what you need and don’t forget the other three tips. What’s the best piece of negotiating advice you’d give to someone? Sometimes the best wisdom comes out of a mistake … have you experienced a bad negotiation before? Meet us in the comments! Image by YanLev / Shutterstock Related Articles: How To Negotiate To Get A Great Deal 15 Things You Should Never Pay Full Price For Is asking for a discount appropriate? It is wrong to walk away from your mortgage? The Temptation of the Daily Deal Win-Win Bargaining – FPU Review #8 Are You Making These 4 Credit Card Mistakes? Tim is a personal finance writer at Faith and Finance a Christian financial help blog that provides financial insights for individuals, businesses, and churches. Outside of finance, Tim enjoys spending time with his wife, playing the saxophone, reading economics books, and a good game of RISK or Catan. Find him on Twitter and Facebook . The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here .
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Negotiating Tips: 4 Things You Shouldn’t Do When Making a Deal!