The Psychology Behind Negotiation

The Psychology Behind Negotiation

Whenever a property is being bought or sold, negotiation comes into play.  The seller necessarily has a price in mind that they would like to sell for, while the buyer has one that they’re willing to pay.  Oftentimes, those two numbers don’t match up – finding the middle ground that works for both parties, then, comes by way of negotiation.  

 

Of course, even as two parties work to come to an agreement, they will both wish to protect their own interests as well.  But how, exactly, can they do so while avoiding friction and a breakdown in communication? According to Dr. Marvin Sadovsky, who has both a Ph.D. in psychology and over 40 years of real estate experience, establishing a relationship is key.  “How do you create in someone else…a sense or a feeling, for them, that they may trust you?” By bearing this question in mind, Sadovsky says, both buyers and sellers can prepare themselves psychologically for a negotiation, and ensure that they come out of the process content.

 

The first step in preparing for a negotiation, he says, is to find out as much as possible about the other party and the framework in which the negotiation will occur.  Try to learn about the other individual’s motivations, as well as the history of the property, the market, and so forth. Utilizing this information will allow you to take a tact that is most likely to prove beneficial for you – it will, in Sadovsky’s words, allow you to speak the truth – not yours, necessarily, but that of the other party.

 

When first meeting someone with whom you will be negotiating, Sadovsky suggests maintaining a high level of observation and awareness.  He suggests being aware of the other party’s physiology and body language, and to work towards reciprocation without mimicry. “You want to start with a good feeling,” he says, and making the other party comfortable by acting in kind can help you to get off on the right foot.

 

That said, the psychology of negotiation should never be about getting the upper hand.  Rather, Sadovsky says, it should be about discovering the other party’s motivations and using that knowledge to create a win-win situation.  “We want to help them get what they want in a way that serves both of us.” In short, building a positive relationship through psychology isn’t about coming out on top – it’s about finding a way to create a mutually beneficial situation that will have everyone walking away happy.