Secrets of Power Negotiating Book Review
Granted this book is on the periphery of personal finance books. However after reading this book it reinforced my thinking that negotiating is such an important part of personal finance. It is a part of every financial transaction that occurs whether we recognize it our not.
My latest big negotiation was my last FSBO purchase. I thought I did pretty well, but its clear to me after reading this book, that I still have a lot of room for improvement.
Heres a couple takeaways:
3 Stages of Negotiating
1) Establish Criteria -- know what the other party wants. Obviously we all want to make/save the most money - after reading this book I now think the critical factor for success is to find out what the other person values more than money. It sounds crazy, but if you can do it, then you can be successful.
2) Get Information -- Find our all you can about the other party. After you have established criteria you want to know everything about the other party so you can identify area for compromise.
3) Reach for Compromise -- Look for things of value to the other party that you are willing to compromise on.
After reflecting on my FSBO negotiations it seems like I did this a bit myself. I knew the seller was looking for someone who would take good care of the property -- I fit his profile and reassured him that I would take good care of it. He valued this reassurance. I also looked for things that were more valuable to me -- I needed a washer/dryer and having relatively new appliances already setup in the house was valuable to me -- I paid $1,000 for them.
3 Rules for Successful Negotiating
Rule #1 - There are always more than one issue in negotiating
Rule #2 - People don't want the same thing
Rule #3 - We will never be a win-win negotiator if we think the other party wants what we want
Whats the worst situation in negotiating? Indifference. Its better that the other party be angry than indifferent. I didn't recognize this until it was mentioned in this book, but I agree completely.
In the end I would recommend this book -- in fact I felt I gained enough out of Secrets of Power Negotiating to find another book on negotiating to further my skills.
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