I know I’ve talked about negotiation before. It’s never fun, really, unless you hold all the cards. And let’s face it when someone across the table from you either has the money or the product or the services – depending on what you’re negotiating – you can have lots of leverage, but you’ll never be holding ALL of the cards. Never. If you were, it wouldn’t be negotiating, it would be extortion.
Let’s take a real-life example that an acquaintance told me about last year. He had a vehicle that he owed money on but he was out of work and couldn’t make the monthly payments – I even considered buying it from him for a time, but the timing wasn’t right for me. The loan was with a bank that he had dealt with previously – he had a good long-term relationship with them. So, he asked them to work with him on the remainder of the loan. They did…they lowered the payment. His negotiation point, while slightly unspoken, was that he was a good customer and will probably be a good customer again soon when he finds work. Until then, lowering his monthly payment helped the customer, and didn’t really affect the bank….good negotiation on their part, too.
A few months later when he found that he could no longer make even the lower monthly payment, he asked for a large reduction in the remainder of the loan – basically a small payoff amount that he would then take care of when he received his tax return. Both sides haggled and ended up $1000 apart. The customer responded that for them to repossess the car and store it for 30 days till auction would likely cost more than $1000. He certainly didn’t hold all of the cards, but he did win the negotiation because he did some thorough planning and calculation and presented them with a logical alternative…come down further and meet his highest possible offer thus causing each side as little pain as possible.