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Understanding Negotiation

Understanding Negotiation

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When times are tough and jobs are hard to come by, people are on the lookout for the best deals out there. Negotiation, or haggling, can be quite beneficial if you’re good at it. Negotiation is a discussion between two parties in hopes of coming to an agreement about something. It isn’t always in relation to money; some people negotiate services or terms. For example, when trying to decide what movie to see, you can negotiate with your honey what time you would like to attend, which theater you would like to go to, or even who will drive. It happens every day and probably more often than you realize.

If you want to be on the winning side of a negotiation, you need to know how the process works and how to use it to your advantage. Here is a guide explaining how to negotiate like a pro.

The Negotiation Process

The most seasoned negotiators do their research prior to negotiating with someone. If, for example, you’re interesting in going with a new cell phone company, neg1check out all the prices of their competitors and the different packages they offer so you are well informed about what’s reasonable. That information is the leverage you have over them. Knowing the weakness in a negotiation is a form of leverage that can be used in your favor. Interested in a house that has been on the market for 26 months, but they are asking too much? Bring that up and ask for a price reduction. After you’ve done your research and are well aware of what you can use as leverage, submit your offer. You will likely be met with a counter offer that may go back and forth a bit until an agreement is reached, also called the close of the negotiation. You may consider the terms to be placed in writing, but that’s not always necessary.

Common Negotiation Situations

It’s not realistic to negotiate on everything like the price of your Big Mac at McDonald’s or the cost of your favorite shampoo with the clerk at the shopping center. Here’s a quick list of what is logical to negotiate:

  • Furniture/mattresses: They are typically marked up, especially at smaller chain stores. If you don’t hear what you would like, try somewhere else or write down the product number and shop around online.
  • Cable bill: All cable companies are in competition with one another, trying to get as many clients as possible. When the dreaded package upcharge goes sky-high once you pass the 1 year mark, people flee their cable company unless the can offer them a better offer. Negotiate with your cable company by mentioning that at X Company, they offer the same package for $20 less. A nice threat to leave them will also make them more willing to meet your needs.
  • neg2Cell phone bill: Cell phone companies are in a similar boat at cable companies; the competition is high and they know it. Try similar methods as with your cable company by letting them know that the other company is offering you a better option or perhaps a better perk, like unlimited long-distance calls.
  • Gym membership: Again, the competition is high so letting them know that the gym next door allows say, 1-year agreement instead of 2, may just tempt them to make an exception, as long as you don’t tell the entire gym. If you know of a friend who joined that same gym a few months prior and got a better deal than what you’re being quoted, kindly ask if they will match that price.
  • Terms of employment: Past-due on a raise you were expecting and possibly even promised? You could ask, but with job cuts and payroll pinching, it may not be logical at the moment to receive a raise, even though it’s overdue. If a raise request was denied, try negotiating for something else like a bump in benefits or more paid vacation days. Small things like that can actually be worth the wait for a raise down the road.
  • Home buying: Buying a home is a huge process of back and forth between the realtor and the current home owner and you, the buyer. Take into consideration how long the house has been on the market and consider how desperate the current owner may be to sell ASAP. More times than not, a common agreement can be reached that pleases all involved parties.
  • Rental terms for housing: This is more difficult to negotiate if you are going through a major apartment complex because they have terms that cannot be negotiated. If you’re renting from a private company or directly with an individual on a home, you will likely be successful. If the monthly payments seem far too high, ask your neighbors what they pay-per-month and let them know that the value of the house/apartment/condo/duplex isn’t as high as they are claiming it to be. If there are issues with the appliances or windows, for example, use that as leverage to get the price dropped. If they simply won’t budge on the price, consider negotiating with them to cover water, sewer, trash, and yard work.
  • Kiosk stands and markets: Most, if not all of them, are run independently and are more than happy to negotiate in order to make a sale. In fact, most of them expect it. Be friendly and reasonable and they will likely be happy to meet your request.

Negotiation Elements

A lot of people are uneasy about negotiating because they believe common misconceptions; they think people will think they’re cheap, or believe they aren’t convincing enough, or they think it’s inappropriate. Whatever the reason keeping you from getting the most value out of something, get rid of those thoughts! Here are some elements to consider when negotiating:

Body Language

Are they shaking their head, pursing their lips, or crossing their arms? Those are negative signs in a negotiation process. Read their body language cues before providing a response so you’re better prepared.

“No” Does NOT Mean “No”

Many times when people hear the word “no,” they count their losses and move on. But wait- you shouldn’t take “no” for “no” during a negotiation. The other party will often say no just to see what your next move is. If you hear a “no,” now’s your chance to counteroffer. Or perhaps stay silent for a moment and wait to see if they change their “no” to a “maybe.” At any rate, don’t jump the gun and be patient.

Negotiate in Person


It’s more comfortable to negotiate by email, but that elongates the negotiation process and people can be misunderstood often, leading to an unpleasant experience. When possible, try to avoid paper negotiation and stick to in-person communication or phone conversations.


You should have a sense of authority in your poise and your voice when trying to reach an agreement. If the other party thinks you are weak and likely to agree to the first offer the give you, you will likely lose in this situation. Stand your ground and show your confidence while remaining pleasant and flexible.


This can be tricky because negotiation is often a quick process of back and forth. If the other party responds in silence, you’re likely to get nervous and fire-off a lower offer. When it’s turned around though, and you meet an offer with silence, they may fire off better offers, and all you had to do was sit there. Work this element in your favor for the best results.

Never Fire off the First Offer

A good haggler usually knows when he’s being haggled so this may be hard to achieve as neg4someone has to start with something. If both of you are afraid to speak up with the first offer, you’re left standing there in awkwardness. Give it a go, see if the other side will speak first and if not, go ahead and give them the first offer, but it should be lower than you originally imagined in your head, just to see what you can get out of it.

Later in the week we’ll take a look at the most important element of negotiation. It may not be what you think…

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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