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(Updated June 2014)
Successful negotiation is based on equal parts science and art. The science of negotiation relies on the research used to back-up claims and offers of fair market value, and to assess the psychological and sociological framework within which the negotiation operates. The art of negotiation is in understanding adequate communication, perception, and the many puzzle-like concessions that fit together to build a successful negotiation.
Central to negotiation is perception—all parties involved need to perceive that their needs are heard and addressed during the negotiation process, and reflected in the outcome. Communication is at the center of perception, where an interactive dialogue ensures that all parties’ interests are heard and addressed. Active listening and dynamic collaboration lead to successful negotiation outcomes, where all parties feel adequately represented, heard, and respected. (K.Stockert, Information & Web Content Specialist)
E - EBSCO articles available for NAR members only. Password can be found on the EBSCO Access Information page.
Negotiation Facts
According to the 2014 Profile of Home Buyers and Sellers,
• 12% of home buyers most wanted their real estate agent to help with price negotiations (p. 62).
• For all buyers, 44% said their real estate agents negotiated better sales contract terms, and improved buyers’ knowledge of search areas (p. 58).
Negotiation Basics
The first step in negotiation is preparation. You should always go into negotiation armed with statistics and data that derive from credible and venerable sources. Make sure to know the fair market price for an item or service, based off empirical research. Prior to negotiation talks, it is wise to determine your “bargaining range” of the highest and lowest prices upon which you are willing to settle. Sharing your research findings with the other parties involved in the negotiation will also help to convey your thought process and rational.
Next, break down the deal into elements that you feel are negotiable. Which aspects of the deal are negotiable and which aspects are “deal breakers”? Where are you flexible and where must you remain unyielding? Enumerate elements of the deal that you might use as bargaining chips—perhaps you feel the other party’s offer is too low, but you still want to work with them: is there another element you can ask for that would off-set their low price? For example, when negotiating a home sale, perhaps including extras, like the washer and dryer, will allow the buyer to increase his or her bid. Or, in an employment offer, you might negotiate additional benefits such as extra vacation days to offset a lower salary offer.
The Negotiation Tool Kit, (REALTOR® Magazine, n.d.).
BATNA, (Harvard University Program on Negotiation Blog, n.d.).
The Connection Between Flailing and Failing, (REALTOR® Magazine, Jan. 24, 2014).
Are You Wired to Succeed?, (REALTOR® Magazine, Dec. 2013).
Don’t Make Eye Contact When Negotiating, Study Says, (REALTOR® Magazine, Oct. 23, 2013).
6 Rules to Boost Your Negotiating Skills, (REALTOR® Magazine, Jan. 2010).
How to Negotiate Effectively, (Inc., Nov. 2010). Q
Negotiation Case Studies
Sweet little lies: Social context and the use of deception in negotiation, (Journal of Business Ethics, 2014). Q
Feels Right ... Go Ahead? When to Trust Your Feelings in Judgments and Decisions, (GfK Marketing Intelligence Review, 2014). Q
Same Power but Different Goals: How Does Knowledge of Opponents' Power Affect Negotiators' Aspiration in Power-Asymmetric Negotiations?, (Global Journal of Business Research, 2014). Q
The CEOs lived on different continents and barely knew each other, (Inc., May 2010). Q
Negotiation Concession Patterns: A Multi-Country, Multi-Period Study, (Journal of International Business Research, 2007). Q
The Experts on Negotiation
7 Tips for What to do After the Deal Breaks Down, (Harvard University Program on Negotiation Blog, June 6, 2014).
10 Hard Bargaining Tactics, (Harvard University Program on Negotiation Blog, June 4, 2014).
Dealing with Difficult People—Such as Putin?, (Harvard University Program on Negotiation Blog, Feb. 18. 2014).
No Vacancy, (Inc., Feb. 2012). Q
Four Strategies for Making Concessions, (Harvard Business School, Research & Ideas, Mar. 6, 2006).
Miscellaneous
Research on Your Own
To search for the most recent articles on this topic, access ProQuest from the Library's home page and enter subject terms such as:
- Negotiation case studies
- Enter into ProQuest text box as su(studies) AND su(negotiations)
- Real Estate and negotiation
- Enter into ProQuest text box as su(real estate) AND negotiation*
Information Savvy
Many websites, such as Wikipedia, can be great resources to quickly orient yourself on a subject before conducting more in depth research. However, anyone in the world can create and maintain a website or write a seemingly legitimate article and may, intentionally or unintentionally, publish false or “misinformation.” When reviewing information on the Internet, you should always consider the ABC’s:
- Accuracy. Is the information accurate? Can you confirm the same information using other resources published by a different author or organization?
- Author. Who composed the information? Can you easily identify the author and contact the author or website publisher?
- Bias. What bias might the author or author organization have?
- Credibility. What are the author’s or author organization’s credentials for publishing the information? What expertise, experience, or education does the author have in this area that makes him or her qualified to write on the subject matter?
- Currency. When was the web page last updated? Is it possible the information might have changed since this web page was last published?
- Critical eye. Remember to always use your discretion and critical eye to determine whether information you find on the web (or even in books and news sources) is trustworthy. Putting websites to the ABC test will get you started in developing a strong critical eye.
eBooks & Other Resources
eBooks.realtor.org
The following eBooks and digital audiobooks are available to NAR members:
Negotiation Genius (Adobe EPUB, Kindle)
Improvisational Negotiation (Adobe EPUB, Kindle)
The Negotiation Fieldbook (Adobe EPUB, Kindle)
Ask For It: How Women Can Use the Power of Negotiation to Get What They Want (Adobe EPUB, Kindle)
And much more! Use the search box at top right of the eBooks site to search for negotiation
Harvard University’s Program on Negotiation offers numerous teaching materials, role simulations, and other resources on negotiation. Some material is free and much of it is available for purchase, including real estate role simulations. Check out the blog for the latest expert advice on negotiation.
Field Guides & More
Field Guide to Determining Asking Price
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