How to Negotiate Anything

The Negotiation (Photo credit: Wikipedia)

You negotiate with your friends and family all of the time over countless topics, such as what movie to watch or whose turn it is to wash the dishes. When it comes to negotiating with strangers, however, you may fall apart.

Negotiation is a skill anyone can learn. Like anything else, some are better at negotiating than others. However, even if you’re a hopeless introvert, you can apply the following seven points to buy or sell a car, hammer out a deal with a contractor, get a raise, or pay a reduced balance on a delinquent debt.

   1.  Negotiation is a Process: Some call negotiation a process, and others call it a game. Stripped to its barest elements, negotiation works like this: One side makes an offer, and other side counter-offers. Then the first side makes its counter offer. Rinse and repeat until the two sides reach an agreement. Or, the two sides can’t agree and the negotiation fails.

   2.  Know Both Types of Negotiators: Type A negotiators are obsessed with winning and taking every dollar on the table. They like to dominate conversations, make demands, and tell you how great of a deal you are getting. Two Type A negotiators locked in battle will beat the daylights out of each other haggling over who concedes most to reach the final price. Type B negotiators are more collaborative and do not see negotiations as a zero-sum game. Two Type Bs in a negotiation will not focus on taking advantage of the other, but on finding the most creative solution to the underlying issue.

Neither a Type A or Type B negotiator is inherently superior to the other. However, you need to recognize your natural style as a negotiator, and what type of negotiator you are up against. If you are by nature a strong A or B, then you need to learn to how to adjust your style to fit the circumstances. When faced with an aggressive Type A, a Type B can steer the negotiations into a more productive direction by asking the Type A, “What type of creative solution can we come up with here?” Or, “What can you do for me on this point?” Or, simply employ silence. One school of thought in negotiations believes the party listening has more power than the party talking.

   3.  Be Polite: If you stay friendly and professional, the person across the table from you will be, too. Use personal facts about yourself without becoming emotional. Listen to the other person’s arguments and answer them clearly. Your job is to convince them to see your side. Their job is to convince you to accept their point of view. If you both play your roles properly, you will reach an agreement. If one side is unreasonable, you will not.

   4.  Do Your Research: Be realistic and reasonable about your expectations. If you are buying or selling a house or car, know the market. Learn what is reasonable and possible. You will not find success buying a mansion for $100,000 or a new luxury car for $10,000, no matter how hard you negotiate.

Some negotiations are more difficult because the parties know less about the market or the other’s position. For example, when negotiating a debt with a collection agent, it is not well known among consumers that collection agents buy collection accounts for pennies on the dollar. A collection account with a $1,000 face value has a $20 to $100 market value among collection agents. The collection agent may have the right to collect $1,000, and will certainly start negotiations at that number, but may settle the account for the lump sum of $200.

   5.  Know How Much You Can Afford. Your budget is an ally you can use in your negotiations. If, all you can afford is $X, then that becomes your barrier no amount of negotiation the other side can penetrate.

   6.  Be Prepared to Walk Away: Have a Plan B. If, for example, you are buying a car, do not become married to the idea of buying one particular vehicle on the lot. If the other side knows you simply must buy that car, house, or service from them, they have no incentive to negotiate. Be polite, but also let the other side know you have options.

In some cases, you are tied to the other party. In those cases, you may still have options, even though these options may be undesirable to you and the other party. For example, if your debts are causing you distress, you have eight options for dealing with debt, including debt settlement, credit counseling, and bankruptcy.

   7.  Set a Time Limit: There is an old saying in the used car business that holds true in other fields as well, “The longer a customer stays on the lot the more they will pay.” If the other side is miring you in pointless delays, pull the plug and move on. The trick, of course, is determining what is reasonable and what is a delay tactic meant to wear you down.


Negotiation takes knowledge, listening skills, and the ability to stay cool when the other side is trying to not play fair. If you walk into a negotiation armed with knowledge about the market and what you can afford, your chances of walking away happy are high.

26 thoughts on “How to Negotiate Anything

  1. Great tips! I think a lot of people are simply afraid/uncomfortable with negotiating… so they’re willing to pay the advertised price. It’s good to plan the negotiation ahead of time – before you’re put on the spot!

  2. All good points! In addition, I look for a reason for the seller to offer or accept a lower price. I do this by asking questions. It is amazing what you can find out when you ask questions.

  3. I am much better at negotiating than I used to be. I don’t mind doing it now. One thing that I have found really hard in the past is the being able to walk away bit. Depending on the situation, it can be easy or hard. I find when negotiating a job, willing to walk away is harder to do. We all need to earn a living.

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  5. I think one of the best ways to get the most out of a negotiation is to choose who you negotiate with. Obviously, you don’t always have a choice … but when it comes to negotiating small things at a store like a price match or a discount for damaged goods you can often pick the person.

    If you pay attention, you will start to figure out which people are less likely to deny things, say no outright, or play hardball in negotiations.

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  8. I wouldn’t consider myself a great negotiator, but whenever I am trying to work out something I ALWAYS HEAVILY consider #6. I think if you know you are willing to walk away and the other person knows it too, it makes you a much more powerful player.

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