By P. Stack

Negotiations differ widely based upon the type of transaction contemplated - purchase of real estate, employment, new business arrangement, etc. However, here are some general principles which apply to all negotiations.

1) How to plan?

First, from your viewpoint, realistically decide what you hope to achieve from the negotiations. Clearly define your minimal goals. If you're not likely to reach them, bail out. Don't get caught in negotiation fever. It can be like bidding fever at an auction where an item goes for far more than it should. Sometimes the most successful negotiations are the ones you walk away from.

Second, empathize with the other side. What do they want out of the negotiations? How badly do they want it? They won't tell you outright, but look for signs and signals. If they're just pumping you for information and no real offers are forthcoming, get out. They're not serious. If you go out to lunch or dinner, each party pays for their own meals and drinks. In negotiations, neither side is doing the other a favor. The negotiations should always be cordial, if possible, but always at arm's length.

2) What approach should you take?

Don’t play games. Be very straightforward. Never describe an item as a "deal killer" unless it is really a deal killer. Never bargain against yourself. If you've made a firm offer, do not make another offer unless the other side submits a firm counteroffer for what you consider to be a reasonable amount. If they're unwilling to make such a counteroffer, leave. Make certain that both sides are fully and fairly apprised of the facts. Your resume should not be padded, and you have a right to know all of the good and bad things regarding the property or deal you're considering. All representations about the deal should be in writing and signed by the other side. If a used car really has only 36,000 original miles, the dealer should be willing to write that on the bill of sale and sign it. Otherwise, it's a lie. Before any dollars are laid on the table, there should be a full airing of all of the good and bad things involved in the transaction.

Be truthful and demand that the other side be equally truthful. I don't worry about "insulting" the other side by making a low, but reasonable, offer. You're not proposing to the person, you are negotiating with them. If a person says, "What's the matter, you don't trust me?" you shouldn't trust them. Just say, "Of course I trust you, but I'm just obsessive about getting things in writing. So, humor me." You'd be surprised at how many "low" offers are actually within a party's range of expectations. Similarly, don't be insulted by a "low" offer. You can simply politely reject it as too low, or make a counteroffer.

3) What is the most important thing you should know when negotiating?

Make certain that both sides fully and completely understand the deal. Innocent mistakes or misunderstandings are more common that outright fraud. After the deal is completely aired, it should be put into a writing which clearly lays out the understanding and the representations of the parties. Memories fade and oftentimes people try to back out of commitments or representations which they made during negotiations. If it's not in writing, it doesn't exist. Most importantly, follow your instincts.

If the deal just doesn't feel right, get out. Your instincts are your best protection against a bad deal. Also, don't be influenced by the personality of the party with whom you are negotiating. The warmest personality in the world is often the used car dealer unloading a real dog on an unsuspecting customer. You should be willing to negotiate on the same terms regardless of the personality of your opposite negotiator.