#16 Learn to Play the Reluctant Seller When You're Negotiating
Imagine for a moment that you own a sailboat, and you're desperate to sell it. It was fun when you first got it, but now you hardly ever use it, and the maintenance and slip fees are eating you alive.
It's early Sunday morning, and you've given up a chance to play golf with your friends
because you need to be down at the marina cleaning your boat. You're scrubbing away and
cursing your stupidity for ever having bought the boat. Just as you're thinking, "I'm
going to give this turkey away to the next person who comes along," you look up and
see an expensively dressed man with a young girl on his arm coming down the dock. He's
wearing Gucci loafers, white slacks, and a blue Burberry's blazer topped off with a silk
cravat. His young girlfriend is wearing high heels, a silk sheath dress, big sunglasses,
and huge diamond earrings. They stop at your boat, and the man says, "That's a fine
looking boat. By any chance is it for sale?" His girl friend snuggles up to him and
says, "Oh, let's buy it, poopsy. We'll have so much fun." You feel your heart
start to burst with joy and your mind is singing, "Thank you, Lord! Thank you,
Lord!" Finally you tell them, "I can see how perfect this boat would be for you and how much fun you'd have with it, but I really don't think I could ever bear to part with it. However, just to be fair to you, what is the very best price you would give me?" Power Negotiators know that this Reluctant Seller technique squeezes the negotiating range before the negotiating even starts. If you've done a good job of building the other person's desire to own the boat, he will have formed a negotiating range in his mind. He may be thinking, "I'd be willing to go to $30,000, $25,000 would be a fair deal and $20,000 would be a bargain." So, his negotiating range is from $20,000 to $30,000. Just by playing Reluctant Seller,
you will have moved him up through that range. If you had appeared eager to sell, he may
have offered you only $20,000. By playing Reluctant Seller you may move him to the
mid-point, or even the high point of his negotiating range, before the negotiations even
start. Many smaller investors bring him purchase offers for one of his holdings, eager to
acquire one of his better-known properties. That's when this well-seasoned investor knows
how to use the Reluctant Buyer Gambit. He reads the offer quietly, and when he's finished
he slides it thoughtfully back across the table, scratches above one ear, saying something
like, "I don't know. Of all my properties, I have very special feelings for this one.
I was thinking of keeping it and giving it to my daughter for her college graduation
present and I really don't think that I would part with it for anything less than the full
asking price. You understand; this particular property is worth a great deal to me. But
look, it was good of you to bring in an offer for me and in all fairness, so that you
won't have wasted your time, what is the very best price that you feel you could give
me?" Many times, I saw him make thousands of dollars in just a few seconds using the
Reluctant Seller philosophy. Power Negotiators always try to edge up the other side's
negotiating range before the real negotiating ever begins. After talking to her for a while, I determined that she hadn't had any other offers and
that she was eager to sell. So I reached into my briefcase, where I had the three offers
carefully filed and pulled out the lowest of them. She accepted it, and when I sold the
condominium a few years later, it fetched $129,000. (Be aware that you can do this only
with a "For Sale by Owner." If a real estate agent has listed the property, that
agent is working for the seller and is obligated to tell the seller if he's aware that the
other side would pay more. Another reason why you should always list property with an
agent when you're selling.) So, Power Negotiators always play Reluctant Seller when
they're selling. Even before the negotiation starts, it squeezes the other side's
negotiating range.
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