Life is full of financial negotiations: lowering your rent, negotiating your salary, buying a new home or car, disputing your cable bill, buying a mattress, or bargaining at a market. Use this advice as you determine how to negotiate when it comes to your finances and build your negotiating skill set to always come out on top.
Know Your Bottom Line
The most important part of negotiating is knowing your bottom line and sticking to it. It will help you know when to walk away and will prevent you from accepting an offer you aren’t happy with and will regret later.
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It is crucial to keep emotions out of the situation and make sure you remain reasonable, level-headed and don’t take anything personally. Also, be careful of bluffing and make sure you are comfortable with any offer or claim you make in case the opposing party calls you on it.
Do Your Homework
Before you head into any negotiation, you need to do research and arm yourself with knowledge, such as industry salary ranges, recent comparable house sale prices, wholesale costs, or trends in your neighborhood’s rental market.
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It is also important to comparison shop and figure out what other homes are on the market for or what the store down the block is offering merchandise for. You can use that information to inform your bottom line and as leverage during your negotiation.
Make a Strong First Offer
There is an art to finding the balance of what your first offer should be. You want it to be high (or low) enough that it leaves you a lot of room to negotiate, but you also don’t want to scare them away with an extreme offer. If you are negotiating a salary, for example, you don’t want to price yourself out of the job by asking for a range that is a lot higher than what they are offering. Remember, you should always present yourself as a serious buyer so they are willing to spend time working with you.
Sweeten the Deal
Be prepared to share what you can bring to the deal that other people can’t. What are you brining to the table? Think about things like if you have a particular job skill set or are you a quiet tenant with strong credit. Come up with unique ways you can differentiate yourself or provide added value to the deal. Consider paying up front, signing a two-year lease or closing within a short time period.
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Show Your Cards… Sort Of
You don’t want to reveal everything, but sometimes explaining where you are coming from will help make the other party meet you where you want to be. If you are buying a home, share your list of renovations that need to be made and show why you want the price to be lowered.
Don’t just accept what the other party is telling you, challenge things that don’t make sense to you. Be sure to sure to ask questions to find out why things are priced as they are.
Always remember you can walk away!
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