There has to be a note of cynicism or pessimism in every deal – if for no other reason than to make the negotiator prepare more thoroughly. Remember, you’re best results will be obtained in a noncompetitive environment. To the extent that a deal seems impossible, your competitors will abandon attempts to make it, thus leaving the field to you. On the other hand, it’s crucial that you not waste time on a deal that’s going nowhere.
There’s an old saying that ‘buyers are liars’. So are sellers when it comes to revealing the true purpose of their entering into a transaction. When Zeckendorf was invited to bid on Howard Hughes’ empire, he discovered that all Hughes wanted was a free appraisal from someone who had the ability to make such an estimate of his estate. You never know when you too aren’t being used for ‘practice’ by the other party.
Your best defense lies in maintaining a realistic attitude toward the events as they transpire. When your opponent adopts and intransigent stance and nothing you do can move him/her off dead center, then your best course might be to just abandon the project.
Another precaution is to avoid being lured into a completely different transaction. This happens quite often in the field of property exchanging. You start off talking about one kind of property, and before you know it, you’re making a deal on something else.
I’ve seen cases in which a salesman for a particular office product was contacted ostensibly to provide a complete office furnishings package to a start-up business. Before the deal was done, he’d been offered shares in the company in exchange for the furnishings, then corporate debt in lieu of cash, then company product.
The bottom line was that the company was really selling, not buying. The salesman was just a pawn in a bigger game. Had he accepted any of the above, he’d have seen his furnishings package sold at wholesale to raise cash while he either held worthless shares, stale inventory or a promise of future payment made by a corporation with little ability to pay.
On the other hand, it’s instructive to use a no-go situation to practice your negotiation technique even when you realize that you’ll never be able to make a profit under the terms and conditions available at the point where your negotiations have deadlocked. So long as you can learn from the process of negotiation, it’s virtually impossible to lose, so don’t allow rejection to cause dejection. Never forget that being able to recognize the other parties strategies and learning to accept rejection are valuable lessons which only field experience can teach.
From Jack Miller’s BUYING HOUSES FROM A TO Z seminar manual.