Stop people from grinding on you in negotiations

Efficient negotiations are not that easy to conclude. There’s not need to be aggressive during the process, but when your counterpart grinds you to get a bigger share, it’s time to put your skills to the test. A business person should always make the most of a negotiation, but they must also spot entrepreneurs who are constantly thinking about money. When someone thinks “how much money can I keep making, if I dedicate 3 more hours negotiating with this individual?” it’s a clear sign that they’re  not interested in a mutual agreement.

Playing the Reluctant Buyer Gambit can get you screwed

Let us assume that you want buy a cabin in the mountains together with a group of friends. When the deal is off because one of the partners just dropped, you feel extremely disappointed. But a friendly neighbor comes along and says he’s got another deal you. Your reaction will probably be “Wow, great! Let’s do it” but you’re smart to play the reluctant buyer gambit. So your first words will probably be “I really appreciate for telling me about the offer, but I’m not sure I can take it right now; I’m quite busy with other stuff; but hey, to be honest could you at least tell me lowest price you could offer me?”

Assuming that your counterpart knows how to negotiate as well, he’ll probably say “I can’t decide that alone as a committee deals with the price, so I don’t know how much they might ask. If you give me a price, I can take your offer back to them; unfortunately, I really can’t give you a price.”

If you press a bit more, he will most likely say “I’m confident they’ll ask for $10,000.” The offer is a lot less than you anticipated which is great as you’d probably accept $15,000 too. Your very first reaction is to take the offer, but you’re wise enough to flinch. You’ll probably exclaim “Oh, $10,000! That’s way over my budget. But you know what, if they agree to $8,000 I might be interested. Get back to me and we’ll talk.”

The Trick

The next day your seller will come back to withdraw his offer. He will say “I’m so embarrassed and I know we agreed on $10,000 but the committee didn’t accept your offer. They said they would only sell for $12,000.” For a buyer this psychology is devastating for 2 main reasons:

1. You feel you’re the one who created the problem so you’ll probably exclaim “Oh gosh, I could have nailed that negotiation for $10,000 and now I’m stuck with $12,000.”
2. You already told everyone you had a great deal on a cabin, so your friends and family will be really excited to see it. But you’ll have to tell them that you walked away from a really good deal.

You’ll go back to the owner and the cabin and you’ll say “What are you saying man? We agreed on $10,000 and now you’re asking for $12,000? Are you going to boost the offer to $14,000 tomorrow?”

He’ll play the guilty card and say “I’m so sorry, I feel really terrible about this, but it was the committee’s decision.” This is a perfect time to make you buy, as he’ll eventually go back to see if he can lower the offer for $10,000. He will ask you “If I convince them to drop the offer to $10,000 will you buy?” And you’ll buy the cabin for its full price without realizing that your attempt to lower the offer was useless. By the time you notice the problem, he already managed to grind you pretty good.

What to remember

Taking back an offer should be seen as a gamble, so try to use it on someone who’s not that good at negotiations; if you’re not careful enough he will grind that offer away from you, and you’ll run to get it back without having negotiated anything. Try to avoid direct confrontation and use proper negotiation skills to get things done to your advantage. Dealing with someone who’s just as good as you, will probably end badly.