How to Take Control of Everyday Negotiations With One Simple Technique

by Tyler Flagg

So, I’m in the market to sell my current car and buy a nice used car. The whole “Dave Ramsey” thing, y’know?

This got me thinking about a negotiation course I took a few years ago. Somehow I was able to find my notes from it, and the phrase below caught my eye because I had underlined it about a dozen times.

Although it’s admittedly a bit tongue-in-cheek, the lesson to be learned is quite universal. Don’t put all of the power in the hands of the person you’re negotiating against. This concept goes by a more formal name called BATNA.

BATNA

BATNA stands for “Best Alternative to a Negotiated Agreement,” and was invented by Roger Fisher and William Ury in their book Getting to Yes: Negotiation Agreement Without Giving In.

The concept is rather simple. Always have an acceptable alternative in the event that the negotiation falls through. If you don’t, you’re more likely to give in and accept a poor deal.

How to Determine Your BATNA

  1. Brainstorm a list of available alternatives to consider if the negotiation does not work.
  2. Determine a course of action to attain these alternatives.
  3. Identify the best of these alternatives and keep them as a “fall back” throughout the course of the negotiations.

Everyday Negotiations

Negotiations come is all different shapes, sizes, and scopes. From peace talks at Camp David to buying a donut, they’re all negotiations in one form or another.

Every day we take part in dozens of negotiations without even realizing it:

  • Deliberating over television time for the kids
  • Defining business deadlines
  • Asking for a raise
  • Debating where to eat dinner

For those of us actively investing in real estate, the list grows much longer:

  • Paying for contract services
  • Purchasing a house
  • Selling a house
  • Deciding rent price and terms

These lists could go on for ever, but I think you get the point. Now let’s dive in a little further with a few examples of how BATNA can be used to your advantage in a real estate setting.

project-management

#1: Buying a House

Let’s say you’re a buy & hold investor and find a motivated seller after having sent out a round of yellow letters. They call you up and offer you their house for $100k. Unfortunately, you’ve run the numbers and found that you can only accept this property for $90k in order to cash flow.

  • BATNA 1: Use your $90k to buy a different property.
  • BATNA 2: Ask if they can use their insurance to pay for a new roof, therefore saving you the $10k difference.
  • BATNA 3: Turn the property into a duplex, therefore increasing your cash flow.

#2: Selling a House

In this instance, let’s say that you’re a house flipper and are looking to sell the property you just completed a rehab on. In order to make a sufficient return on your investment, you have the house on the market for $149,900, and within a few days, you get an offer for $140k. This is less than what you were hoping for, but it’s the first offer.

  • BATNA 1: Leave the house on the market longer.
  • BATNA 2: Invest the money to stage the property and have an open house in order to get more offers.
  • BATNA 3: Rent out the property until the comps in your area support your $149,900 valuation.

real-estate-offer

#3: Agreeing on Contractor Quotes

Ah, working with contractors. Everyone’s favorite part about investing in real estate. Let’s say you just bought a buy and hold property and want to do a remodel of the kitchen and bathroom in order to get a better tenant. You get a quote from a contractor that is $20k. This number seems pretty steep, and after you run the math, you find that it’ll take years before you’ll break even.

  • BATNA 1: Find at least three more contractors to provide quotes for the same work. Choose one with a more reasonable estimate.
  • BATNA 2: Buy books and watch YouTube videos in order to learn how to do the work yourself.
  • BATNA 3: Find some cost saving substitutions for the remodel (i.e. laminate instead of granite, black or white appliances instead of stainless steel, etc.).

To Say or Not to Say?

The final play that you have in this negotiation is the decision on whether or not to tell the other person what your BATNAs are. Unfortunately, there is no one right answer to this question. Each negotiation is different, and you’ll have to make that decision on your own.

A good rule of thumb is this: If your BATNA is better than their BATNA, bring it up. If your BATNA is worse than their BATNA, keep it to yourself.

Any good examples of using BATNA in a normal everyday setting? How about in real estate negotiations?

Leave your comments below!

Interested in Finding out More? Reach out below

Shawn Ireland

Phone: 913-225-6231

Email: Ireland_Investments@yahoo.com

Address: 1415 Main St. #823, Grandview, MO 64030


Website: www.irelandinvestmentsllc.com/

Facebook: @IrelandInvestmentsLLC/

Instagram: @irelandinvestmentsllc

Twitter: @IrelandLlc


Ireland Investments llc

This information is intended only for the use of the intended recipient(s) and it may be privileged and confidential. Please note that any views or opinions presented in this post are solely those of the author and do not necessarily represent those of the company. This is reposted information and is not original thought of Ireland Investments or anyone associated with the business.

Popular areas we service;


Kansas city Missouri, Overland Park Kansas, Kansas city Kansas, Olathe Kansas, Independence Missouri, Shawnee Kansas, Blue Springs Missouri, Lenexa Kansas, Leavenworth, Kansas, Leawood Kansas, Liberty Missouri, Raytown Missouri, Gladstone Missouri, Grandview Missouri, Belton Missouri, Prairie Village Kansas, Gardner Kansas, Raymore Missouri, Grain Valley Missouri, Ottawa, Kansas, Lansing Kansas, Excelsior Springs Missouri, Merriam Kansas, Harrisonville Missouri, Cameron Missouri, Mission Kansas, Kearney Missouri, Smithville Missouri, Pleasant Hill Missouri, Oak Grove Missouri, Bonner Springs Kansas, Roeland Park Kansas, Parkville Missouri, De Soto Kansas, Richmond Missouri, Greenwood Missouri, Paola Kansas, Basehor Kansas, Tonganoxie Kansas, Odessa Missouri, Peculiar Missouri, Platte City, Missouri, Higginsville Missouri, Lexington Missouri, Edwardsville Kansas, North Kansas City Missouri, Osawatomie Kansas, Louisburg Kansas, Fairway Kansas, Mission Hills Kansas, Sugar Creek Missouri, Riverside Missouri, Buckner Missouri, Pleasant Valley Missouri, Lawson Missouri, Plattsburg Missouri, Lake Lotawana Missouri, Weatherby Lake Missouri, Wellsville Kansas, Edgerton Kansas, Westwood Kansas, Garden City Missouri, Gower Missouri, Claycomo Missouri, Lone Jack Missouri, Drexel Missouri, Lake Tapawingo Missouri, Glenaire Missouri, Dearborn Missouri, Avondale Missouri, Osborn Missouri, Sibley Missouri, Oaks Missouri, Unity Village Missouri, Levasy Missouri, Randolf Missouri, River Bend Missouri, Jackson County Missouri, Johnson County Kansas, Clay County Missouri, Wyandotte County Kansas, Cass County Missouri, Platte County Missouri, Leavenworth County Kansas, Miami county Kansas, Lafayette County Missouri, Ray County Missouri, Clinton County Missouri, Bates County Missouri, Linn County Kansas, Caldwell County Missouri, Crossroads Real estate, 18th and vine Real estate, Hospital Hill real estate, library district real estate, longfellow real estate, dutch hill real estate, quality hill real estate, river market real estate union hill real estate, Greater downtown KCMO real estate, East Side KCMO real estate, Midtown KCMO real estate, Westport Real estate, Hyde Park real estate, Northeast KCMO real estate, Northland real estate, Plaza Real estate, South Kansas City Real estate, Fairway Kansas real estate, Kansas city Kansas real estate, lake quivira Kansas real estate, Lenexa Kansas real estate, Mission hills Kansas real estate, overland park Kansas real estate, prairie village Kansas real estate, Shawnee Kansas real estate, weatherby lake Missouri real estate, westwood Kansas real estate

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

WordPress.com.

Up ↑

%d bloggers like this: