Tuesday, March 6, 2007

Implicit & Explicit Communication

A couple was very interested in a beautiful designer “glass” house nestled in the foothills in Southern California.

Regarding himself as a tough and creative negotiator, the husband inserted into his otherwise decent offer an unusual clause that compelled the seller to pay closing costs.

Offended, and probably befuddled by this negotiating gambit, the seller decided under no circumstances would she sell this dwelling to the couple. In a word, she just disliked how they "bargained."

Too often, we gauge our results from a negotiation based on what we perceive the other party is getting from the deal. If we think they’re asking for something “they don’t deserve,” our mission shifts from getting what we need to preventing them from getting whatever it is, however minor, that they’re demanding.

In this case, the seller just didn’t want the couple to get the closing costs, which amounted to no more than 3% of the overall sales price.

As it turned out, the seller discounted the property by 3% to the next couple that happened along, in this case with a more conventional sounding offer, and everybody walked away happy with their results.

Management guru Peter F. Drucker, my MBA professor for two and one-half years, once said:

“Our motivation depends less on what we’re getting and more on what we believe others are getting.”

If we think they’re profiting unfairly, then, automatically, we believe it is at our expense.

In any negotiation this is a major distraction, and often, as revealed by the real estate transaction, it is a deal killer.

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