One Secret of Power Negotiating

This is an excerpt from Secrets of Power Negotiating, 25th Anniversary Edition by Roger Dawson is available wherever books and ebooks are sold or directly from Career Press, the publisher at Adapted, and reprinted with permission.

The Reluctant Seller and the Reluctant Buyer

Imagine for a moment that you own a sailboat, and you are desperate to sell it. It was fun when you first got it, but now you hardly ever go out on the boat, 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 buddies because you need to be down at the marina cleaning your boat. You’re scrubbing away and cursing your stupidity for having bought the boat in the first place. 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 woman on his arm coming down the dock. He’s wearing Gucci loafers, white slacks, and a blue Burberry 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, young man. By any chance is it for sale?”

His girlfriend 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!”

Expressing that sentiment is not going to get you the best price for your boat, is it? How are you going to get the best price? Playing Reluctant Seller. You keep on scrubbing and say, “You’re welcome to come aboard, although I hadn’t thought of selling the boat.” You give them a tour of the boat, and at every step of the way, you tell them how much you love the boat and how much fun you have sailing her. 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 offer me?”

Power Negotiators know that this Reluctant Seller technique expands the negotiating range before the negotiating begins. If you’ve done a good job of building the other person’s desire to own the boat, he will have formed a range in his own mind. He may be thinking, “I would be willing to go to $30,000, $25,000 would be a fair deal, and $20,000 would be a bargain.” Therefore, his negotiating range is from $20,000 to $30,000. Just by playing the Reluctant Seller, you will have moved him up through that range. He may even offer you $40,000. If you had appeared eager to sell, he may have offered you only $20,000. By playing the Reluctant Seller, you may move him to the mid-point, or even beyond the high point of his negotiating range, before the negotiations even start.

One of my Power Negotiators is an extremely rich and powerful investor, a man who owns real estate all over town. He is very successful—what you could justifiably call a heavy hitter. He likes wheeling and dealing. Like many investors, his strategy is simple: Buy a property at the right price and on the right terms, hold onto it and let it appreciate, then sell it at a higher price. 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 Seller Gambit.


Play the Reluctant Seller

He reads the offer quietly, and when he’s finished, he slides it back across the table and scratches above one ear, saying something such as, “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 I would part with it for anything less than the full asking price. Please understand that 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 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.

I remember an oceanfront condominium I bought as an investment. The owner was asking a fair price for it. It was a hot real estate market at the time, and I wasn’t sure how eager the owner was to sell, or if she had any other offers on it. I wrote up three offers, one at the low end of my negotiating range, one at the mid-point, and one at the high end of what I was willing to pay. I made an appointment to meet with the seller, who had moved out of the condominium in Long Beach and was living in Pasadena.

After talking to her for a while, I determined she hadn’t had any other offers and was eager to sell. I reached into my briefcase, where I had the three offers filed, and pulled out the lowest of them. She accepted it, and when I sold the condominium a year later, it fetched more than twice what I had paid for it. (Be aware 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 buyer would pay more. This is another reason why you should always list property with an agent when you’re selling.)



Power Negotiators play Reluctant Seller when they’re selling. Even before the negotiation starts, it squeezes the other side’s negotiating range. Turn this around and consider the Reluctant Buyer. Put yourself on the other side of the desk for a moment. Let’s say you’re in charge of buying new computer equipment for your company. How would you get a salesperson to give you the lowest possible price? I would let the salesperson come in and have her go through her entire presentation. I would ask all the questions I could possibly think of, and when I finally couldn’t think of another thing to ask, I would say, “I really appreciate all the time you’ve taken. You’ve obviously put a lot of work into this presentation, but unfortunately it’s just not the way we want to go; however, I sure wish you the best of luck.”

I would pause to examine the crestfallen expression on the salesperson’s face. I’d watch her slowly package her presentation materials. Then at the very last moment, just as her hand hit the doorknob on the way out, I would come back with a magic expression. There are some magic expressions in negotiating. If you use them at exactly the right moment, the predictability of the other person’s response is amazing.

I’d say, “You know, I really do appreciate the time you took with me. Just to be fair to you, what is the very lowest price you’d take?”

Would you agree with me that it’s a good bet that the first price the salesperson quoted is not the real bottom line? Sure, it’s a good bet. The first price a salesperson quotes is what I call the “wish number.” This is what she is wishing the other person would agree to. If the other person agreed, she would probably burn rubber back to her sales office and run in screaming, “You can’t believe what just happened to me. I was over at XYZ Company to make a bid on the computer equipment they need for their new headquarters. I went over the proposal and they said, ‘What’s your absolute bottom-line price?’ I was feeling good so I said, ‘We never budge off list price less a quantity discount, so the bottom line is $225,000,’ and held my breath. The president said, ‘It sounds high, but if that’s the best you can do, go ahead and ship it.’ I can’t believe it. Let’s close the office and go celebrate.”

Somewhere out there, there’s a “walk-away” price, a price at which the salesperson will not or cannot sell. The other person doesn’t know what the walk-away price is, so he or she has to do some probing, some seeking of information. The buyer has to try some negotiating Gambits to see if he or she can figure out the salesperson’s walk-away price.


Look Out for the Reluctant Buyer

When you play Reluctant Buyer, the salesperson is not going to come all the way from the wish price to the walk-away price. Here’s what will happen. When you play Reluctant Buyer, the salesperson will typically give away half of his or her negotiating range. If that computer salesperson knows the bottom line is $175,000, $50,000 below the list price, she will respond to the Reluctant Buyer Gambit with, “Well, I tell you what. It’s the end of our quarter, and we’re in a sales contest. If you’ll place the order today, I’ll give it to you for the unbelievably low price of $200,000.” She’ll give away half her negotiating range, just because you played Reluctant Buyer.

When people do this to you, it’s merely a game that they’re playing. Power Negotiators don’t get upset about it. They just learn to play the negotiating game better than the other side. When the other person does it to you, the correct response to this Gambit is to go through the following sequence of Gambits:

“I don’t think that there is any flexibility in the price, but if you’ll tell me what it would take to get your business (getting the other side to commit first), I’ll take it to my people (Higher Authority—a middle negotiating Gambit that I’ll cover later), and I’ll see what I can do for you with them (Good Guy/Bad Guy—an ending negotiating Gambit).”



Key Points to Remember

  1. Always play Reluctant Seller.
  2. Look out for the Reluctant Buyer.
  3. Playing this Gambit is a great way to squeeze the other side’s negotiating range before the negotiation even starts.
  4. The other person will typically give away half of his or her negotiating range just because you use this.
  5. When it’s used on you, get the other person to commit, go to Higher Authority, and close with Good Guy/Bad Guy.


For more information, see Secrets of Power Negotiating, 25th Anniversary Edition.




Photo Credit: LinkedIn Sales Solutions.

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