This is a great post by Jim Camp from Foreclosures.com explaining the mistakes investors should avoid during negotiations.
10 Biggest Mistakes to Avoid in Negotiations.
By Jim Camp
Everything you will ever have will come from a negotiation.
You are constantly negotiating: buying a new house or car, getting a new job or raise, deciding where to go for dinner or who will take out the trash, or closing a multi-million dollar acquisition.
Do you feel nervous, maybe a little out of control when negotiating for money, a project, a new client, or a job? Are you sick of compromising out of fear? Are you tired of losing a negotiation and not knowing why?
Check this list to see if you are making the most common mistakes when it comes to negotiating.
1. THINKING DECISIONS ARE MADE WITH INTELLECT.
Highly educated leadership and team members often think decisions are made with intellect.
Unfortunately it is the opposite. Decisions are made completely in an emotional arena of the brain.
Negotiating is about understanding human behavior — yours and your negotiation opponent’s — so you can navigate through emotions, clarify misunderstandings, articulate challenges, and help your negotiation opponent build a vision of his or her problem for which you, and you alone, offer the most optimal solution.
2. INVESTING IN EXPENSIVE PRESENTATIONS.
Organizations invest $100,000s in presentations that spew facts, figures, and logic. They think they are building credibility, when in fact they are weakening their negotiating position.
With each new fact, their opponents are thinking of numerous objections. All you manage to create with expensive presentations are objections to drive the price down
3. PLANNING TO COMPROMISE AS A CONTINGENCY.
Planning that includes compromise or fall back positions is the worst way to prepare for a negotiation and leads directly to deep compromise and unnecessary concessions. When learning how to negotiate, it’s essential that you get over your fear of the word “No.”
Children are not afraid of “No.” In fact, children understand that “No” is not the end of a conversation, but the beginning of a negotiation! When a child says “No” or hears “No,” he or she knows instinctively that a back-and-forth negotiation will ensue.
The same is true in any business negotiation. Start by inviting your respected negotiation opponent to say
“No.” Tell him or her that you will not take “No” as a personal rejection, but as an honest decision that can be discussed and perhaps reversed.
4. MEETING WITH THE WRONG PEOPLE.
Meeting with the wrong people is a terrible problem that too often, allows important information to go inthe wrong hands and in time, will almost always lead to needless compromise.
By giving the other side information, you provide them an advantage and the time to better prepare for a meeting of value.
5. PUSHING TO CLOSE, CLOSE, CLOSE.
Too often teams are trained to drive for the “Yes” with verb-led questions and to close, close, close. This drives deep concessions as fear of loss of the deal looms because they think “No” means failure.
Examples of verb-led questions include, “Do you think we should bring Mary into the loop?”, “Is this the biggest issue facing us?”, and “Does it fit into your needs?” Instead, open your questions to get more than a “Yes” or “No” answer, and listen!
“What is the biggest issue facing us?”, “How does Mary fit into this?” and “How does it fit your needs?” will generate volumes of great information from your opponent that you can work with.
6. USING A WIN-WIN STRATEGY.
Win-Win training drives team members to become unwitting agents. They falsely believe they must protect the relationship, so they eventually give up far too much information to the other side all in the name of protecting the relationship. You will see them battling internally for deeper concessions all in the name of protecting the relationship.
Do not try to be friends. Your negotiation opponent is not your friend. You are not seeking loyalty or a long-term relationship — symbols of neediness. What you want, instead, is respect and a fair negotiation agreement that accomplishes your negotiation mission and purpose, and fulfills his or her vision.
7. LETTING THE RFP PROCESS DRIVE THE NEGOTIATION.
Too often an RFP is accepted as truthful and all that is required to participate. This leads to an emotional roller coaster that eventually will produce concessions and compromise.
8. LACK OF VISION.
Teams are not trained to create vision that will drive full price decisions.
Every negotiation, whether it’s a phone call or a formal business negotiation meeting, needs a negotiation mission and purpose. Yours is to help your respected negotiation opponent see how your three or four top features will help him or her achieve key business goals.
9. BEING TOO NEEDY.
Emotions bog you down, cloud your ability to make clear negotiation decisions based on fact, and almost instantly give the advantage to the other side. Emotions are the number-one deal killer — and neediness is the worse culprit.
Your job at the negotiating table is to become a blank slate. You have no needs. You need food and water. You don’t need this raise, this sale, or this deal. Once you are clear about the difference between wants and needs, it will set you free.
10. NOT ADDRESSING THE ELEPHANT IN THE ROOM.
Identify problems standing in your way. Before the negotiation meeting, write down every problem you can think of that might come up, so you can bring them out into the open. Always address the elephant in the negotiating room.
When you can overcome these ten common problems, your will begin to see dramatic results in your negotiations.
To apply these negotiating techniques to successful wholesale foreclosure investing, in a hands-on training environment, read more at Seven-Steps to Mastering Foreclosures
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