What Is the Point of Negotiating Anything to Do With Money?

In My Humble Opinion
1

This seems to be a unusual personality trait and I don’t understand why. I won’t allow myself to be sold anything whatsoever by any type of salesperson whether it is an extended warranty, a timeshare, or an additional service for something that I buy. The default answer is always a hard no to everything unless I get some overwhelming evidence that might be something I should look into later. The best that they can do is provide good information for me to go back home and research.

I just hang up if it is a cold call or warn them that they better cease and desist immediately if it is something that I want to buy in person. I have and will just walk out if it continues without any guilt or pretense. I think that is perfectly logical but there are painfully to few people that do that and those that do play along support predatory and unethical businesses.

What seems to be a little more unusual is that I refuse to negotiate on just about anything to do with money. When I buy a car, I do lots of research and then I just walk in and make a take it or leave it offer. They usually take it but sometimes they don’t and that is perfectly within their rights and I will find another dealer. That is the end of it and it is not a game. The same thing applies to houses or anything else I might buy.

What is the point of negotiating about anything remotely like that? You set your price based on the best information you have available and I don’t see why anything or anyone should modify that position unless it reduces the price?

2

There are some values/personality traits that are specific to the middle class, and this is one of them (Another is squeamishness about marrying cousins). I think there’s an upper middle-class embarrassment about money, or showing an attachment to it. It’s rooted in the same taboo as discussing one’s salary or saying how much you paid for an appliance.

I don’t say this as a put-down; it’s certainly an element of my upbringing as well. But it doesn’t seem to be part of the makeup of people significantly higher or lower on the social scale than myself.

3

Often both parties have different information available. Or they might come to separate conclusions from that information. Take buying a car. You may have your asking price, but I might be willing to hold out for a buyer with a more desperate need.

Negotiations generally are only possible for specialized items or services. Homes, cars, etc.

That is because the middle class, by definition, is average, mediocre, middle of the bell curve. They make enough to not have to nickle and dime, yet they are not confident or aggressive enough enough to wheel and deal themselves into a better position. That’s why they stay middle class.

It’s an American trait in general. I have friends who are Greek, Lebanese, Jewish, or Italian who are always haggling over everything. Americans are just so used to paying whatever market price is. Unless you happen to be in a job like salesman, stockbroker, real estate agent or lawyer you generally don’t have any experience in negotiation.

4

You could potentially get a better deal if you negotiate, if you deem it worth your time.

For example, you may have decided that 50K is what a car is worth to you. If you tell the dealer that, you might be leaving money on the table.

If, instead, you say you will pay 45K, and the dealer takes it, you are up 5 large. You win if both parties settle on something less than 50.

In general, you don’t want to throw out the first number.

5

My brother is currently expecting a response about a job. It’s a job he’s very interesed in. His asking salary and the salary he’s willing to accept are different; he’s willing to accept a somewhat-lower salary, among other things, because the job is in town and he already knows and works well with three of the six people who would be his closest coworkers. He didn’t know either of these things when he was first asked “how much do you want?” And if he gets more than what he’d be willing to accept that just makes the deal sweeter.

Most people, when making an offer on big budget items, do not state their acceptability limit, as you do.

6

The whole point of a negotiation is to gain an advantage in the best possible way for either party by taking advantage of information and/or emotions. You offering a price below sticker is an attempt at negotiations (because you think the car is worth less, or you’re trying to save money against the base price). If the dealer doesn’t except, that doesn’t mean a attempt at a negotiation didn’t occur. When you do find a dealer that excepts the offer, you negotiated your price. So you’re really not refusing to negotiate, you almost have to unless you want to pay asking price everytime for these types of things.

Because people “give in”. When you place an ad to sell your house, you may want 100k. But you just know that people are going to talk you down, and that you won’t get an offer unless you accept a cheaper price. So you list the house for 110k instead, and sheepishly take the 103k offer. Most people know that people set a bar for a deal to happen, and they’re going to try and negotiate to your “give in” price. So try they will. Buyers know this, sellers know this. They both agree to find the sweet spot to make the deal. The same goes for salary negotiations. You want $30 an hour, so you ask for $35 instead. When they offer you $32, you again take the “raw deal”.

Negotiating is just a part of life, like the dating “game”. Which coincidently, introduces a whole new world of “negotiating”.

7

You give one stellar, one atrocious example of where refusing to negotiate on price has a point to it - the car and the house. As has been pointed out in the car buying threads we have here, doing some research, walking in to a car dealership and making an offer, then not giving a monkeys if he says no and walking out is just about the best strategy one can take. I am not clear if you would do this because you think it is a good business strategy, or if you think that haggling over motors is a petit-bourgeois, penny ante activity that ill befits you.

The house though, I don’t understand at all. Housing markets can be brutal and will stomp all over an intransigent attitude to negotiating. For 99% of people a house is the most important, most expensive thing they ever buy and it absolutely has to be got right. Not negotiating is going to result in missing that dream house that comes on the market once a year, or being stuck for ages with a house no one wants to buy because your idea of its worth is in discord with the market, or just being plain left in rented accommodation because you refuse to pay over the odds to get a foothold etc etc.

Just to contradict myself a little, I live in Scotland where the vast majority of houses are sold via a sealed bid system - no negotiation at all in the face to face sense. Still, if you miss out with a bid on six houses in a row then some re-negotiation with the market is needed.

8

Explanations for my singlehood continue to accumulate at an amazing rate.

9

I have only bought one house so I probably don’t have enough experience in that area. However, when we bought our hour 6 years ago, the Boston housing market had already heated up and we were picky about what we wanted and we had a budget with a pretty firm ceiling. We found the mother of all fixer uppers but it was still a little out our price range. We made an offer that was 75K below the asking price and got it just a few hours later. The only negotiating was that I told the owner that we wanted his dog (a beautiful Samoyed) and he gave us Bear too.

10

This is going to be a WTF here. So if you went into a store, are looking at products and the sales person walks up, then you would tell them immediately to cease and desist? WTF? That’s really rude. Just tell them you’re not interested for chrissake, you don’t have to bite people’s heads off. Selling is not inherently unethical. Talking to customers who walk into your store is not predatory.

I was just talking to a real estate agent today about buying a home here in Tokyo, and was asking how much you could expect to negotiate on price. For new homes, some developers will, some won’t. It depends how much of a hurry they are in vs. how much other interest there is.

As a sales manager, I negotiate a lot with customers. I bargain when I buy things and bargain when I sell.

Price is often only one factor in a sale. Other factors include timing, e.g., who is willing to wait and who isn’t., convenience and then the biggie, what alternatives are there if the sale or negotiation fails.

Alternatives are important to understand. If I’m offering my car for $9,000 and my brother-in-law will buy it for $8,700 if no one else takes it, then I’ll hold onto my price more than if I don’t know how much I get. Real estate in a hot market will command the selling price, but not in a slow market, since there aren’t as many people lined up to buy. There are plenty of MacJobs available and a turnover in the labor market, so there really isn’t much incentive or practicality for either side to negotiate, but if you are a movie producer then it’s expected you will need to in order to get the best deal and still land a star.

Timing plays a large factor. If you need a car right away, it may be worth several hundred dollars to get one now rather than go research other options. If you don’t care about waiting for a year before moving then you can find a better deal than if you need to move this week. If I need cash now, I’ll sell my watch cheaper than if I don’t need the cash.

We’ve got really good clients who regularly purchase from us. They will come and ask for a discount so they can win a bid. We discuss how much they need and how much we can help. If they agree to purchase from us instead of our competitor for a large project, we’ll give them a deal, which is negotiated. Since we have long-term relationships, it’s not a hostile, hardcore bargaining, but they will ask what we can do and we’ll look into it.

The bigger question is why not negotiate?

11

I don’t mean literally mean screaming at salespeople telling them to cease and desist. I am generally a polite person. I just mean letting them know that I won’t entertain any sales pitches about things that I know I don’t want or need. Most salespeople get the idea rather quickly from just a few phases but I have a couple of issues with this at car dealerships and decided to just leave. I don’t want to hang out and listen to things that I would never want. The worst offenders are extended warranties or high pressure time-share sales. The fact that anyone sits there and listens to pitches about things like that are what boggle my mind. I do hang up on every single telemarketer or charity solicitation (police association scam for example). I generally do that during the telltale pause between answering by an operator.

12

However, that’s a function of the manner in which most goods are sold in industrialized nations. I can’t haggle over 98% of the things I buy. The clerk at Wal-Mart, the waiter at Milestones and the guys who changes my oil just don’t have the power to do that sort of thing. It would be a waste of everyone’s time for me to try to negotiate a better price on a box of Wheaties at Sobey’s; they couldn’t even ring the item through.

Only a few things actually give the opportunity for negotiation - houses and cars being the obvious ones, but gym memberships are another, and salaries for professionals. And I know plenty of middle class folk who’ll dicker over those items as long as you let them.

You can be stupid, though. A woman approached my parents asking to buy their house before they even put it on the market. Hoo boy; there is probably nothing stupider. Smelling blood, my mother quoted a price that was obviously above market value. Here’s how the negotiations went:

BUYER’S AGENT: Okay, so you want X. How about .95X?
MY MOM: It’s X. We won’t take a penny less.
BUYER’S AGENT: Uh… how about $.99X?
MY MOM: X, not a penny less.
BUYER’S AGENT: Umm, a hundred dollars less?
MY MOM: No.
BUYER’S AGENT: The roof and windows are shot.
MY MOM: So we’ve been told.
BUYER’S AGENT: There’s $25,000 in repair work to be done.
MY MOM: Good luck with that.

They paid the full price and did all the repairs themselves. This leads to RickJay’s First Law of Negotiations: For Christ’s sake, don’t want up to a house that isn’t for sale and tell the owners you absolutely must buy it right away.

13

I just hang up as soon as I realize it’s a telemarketer. I don’t really care about their feelings. It’s not a personal call and I didn’t ask them to call me.

14

Depending on the cost of the house, the money they saved in real estate agent commissions might still have made it worthwhile.

15

What is negotiation, but a kind of auction? Buyer and seller are mutually feeling each other out to find the price at which the seller is willing to sell, and the buyer willing to buy. In the case of a house, the price is not a fixed amount for a simple reason – not every house is the same, not every buyer’s needs are the same, and the seller is typically an individual, not a corporation that has a set price based on known inputs and expectations of return.

16

This pretty much hits the nail on the head. Along with the other comment above that you actually are negotiating, you just don’t admit it.

Pushy sales people I can understand. However as my mom works in sales allow me to also add that they are often on commision. Stores are now starting to hire more salespeople to flood the floor. This benifits them in that they never have to worry about ‘missing’ a customer plus the added bonus that with so many people selling, they often don’t all make their monthly sales figures. So I try and be patient, and make it a point that when I’m ready to buy something to find the person that greeted me when I walked into the store and buy from them.

As for time-share stuff, I’m having a hard time figuring out how you have to ever sit through one of those unless you know what you’re getting into. I can’t recall ever having one of those come up out of the blue. If I did sit through one, it was because I wanted whatever free crap they were offering. shrug…I give you 3 hours of my time and practice saying “no”, you give me $100.

Some things you’re missing out on by automatically saying “no” to every offer. Take extended warrenties. Sure I don’t need an extended warrenty on my toaster. But on the $2000 HD TV I just bought? It’s worth it to pay an extra $300 for 3 year in home service which includes replacing the bulbs.

You don’t negotiate your salary when you take a new job? Then unless you’ve worked for the nicest companies ever, you made less than you could have. The opening offer for my current job was almost $11k less than I’m making right now.

Anyway, like everything else in this forum, it’s your opinion on how you think things should work. Mine is that if the possibility exists for me to get a better deal? Then you’d better believe I’m going to try and get it.

17

You would be amazed at how many things you can negotiate about if you’re willing to do so and how much money you can save just by asking. I had no idea you could negotiate on furniture, but you can.

My husband (and his now deceased mother) are/were incredible about this. My MIL got a lower price on a used car by telling the salesman that the previous car he sold to her late husband was so bad he worked himself to death trying to deal with its flaws and “that’s why I’m a widow today.” She told me that story, and I could not believe it.

My husband is also and expert; I cannot tell you how many hundreds, probably thousands of dollars he has saved us over the years on everything from cars to home appliances. Yes, vacuum cleaners. Once he stayed at a car dealer, they were sooo close on a deal, down to the last couple hundred. It became closing time, the salesman really wanted to go home, and capitulated. Not only that, he wrote a 2 where there should have been a 5 and we ended up paying $300 less than the “bottom line” offer. They called the next day, but oh, well, it was signed and all, even approved by the manager. My husband had a few moments when he realized the error in his favor and thought of offering to let them change it. I told him, “What, do you think if it had been the other way around they’d do the same for you?” He did go take the salesman out to lunch later and slipped him part of the difference to make up for the guy’s lost commission, though.

Another time, he and I were car shopping. The price quoted seemed reasonable to me, but I’ve learned to keep my mouth shut since I am no good at this. “Nope,” says Himself, “I think we’ll keep looking.” We started to walk away and at EXACTLY the third step, as he had predicted, the sales man came after us. “Wait, let me talk to my manager.”

As to why? Well, there’s a couple hundred dollars in your pocket. Should they be in your pocket or the salesman’s?

18

Oh* fuck* yeah. :smiley: I have haggled in places where most would never think you could haggle. Now, you do have to be realistic. But still, I have got a %= sales tax by paying cash, a discount = to delivery charge from a place that offered “free delivery”, a “case” discount, and a shopworn shelf-sample discount (40%!). And those not at flea markets, either- those were at retail chains. But make sure you have a legit reason (like those I offered) to offer less. “Paying cash” usually won’t work except at a sole prop., of course.

Cars? You can get a decent price on non super hot models by researching, coming up with a bare minimum edge over invoice and a “take it or leave it”. But if the car is selling fast, forget it. And, even when you do so, you have to be aware they can hit you hard with financing, trade-in or add-ons. Or you can just buy a Saturn, and walk out relaxed- if you like Saturns, of course.

19

You actually hit on a decent point that has been relevant to me over the last year although it is opposite of what I am talking about. I got a very good job as a consultant 2 years ago that I liked very much. After 6 months, my consulting company called me with the supposedly good news that they wanted to hire me into (an exactly the same permanent) position. In consulting, you usually take a small pay cut if you move into a permanent position because of benefits and vacation time.

The hiring process drug on and on and I didn’t really care at all because I was making great money for the regular part of the job and still great money when I volunteered for late nights and weekends. Nine months after this all started, I got called into a directors office for an offer letter. It was for $10,000 less than I mentioned when the subject came up and over $20,000 less than I was making then. I immediately rejected it and bought the $50 dollar versions of my salary.com report with great data. They looked at briefly and tossed it aside.

The irony of this thread is that they decided that they wanted to hire me and yet did exactly what I describe as examples in this thread. The best negotiation that I could come up with was to stay a contractor as long as I could and that meant the next 3 months after which I would be canned with the next group of contractors to go.

The odd part is that I work for a global benefits outsourcing mega-corp as part of my job and I have the highest security clearance there with access to not only salary and benefits data for millions of people around the world but also for everyone in our company. I had the holy grail of data for everything associated with this and still lost. That is why I think telling rather than negotiating may be the best bet for most situations. The problem arises when a North Going Ox meets a South Going Ox on the same path.

20

If you’ve got north and south going oxes, then nothing works. Not all negotiations work. Not all “telling” works.

Telling is actually negotiating, but it’s an extreme version of it. It’s saying take this offer or drop dead. It can be useful, and I employ it at times as well. It works well when you are negotiating from a position of strength. “I’ve got the cash and I want this model of car at this price.”

What you are really saying is: “I know that another dealer will likey sell it to me at this price because I’ve done my research and I know how much is a fair price.”

For most negotiations, knowing your alternatives and the other side’s alternatives gives the relative strengths and weaknesses. This is why research is really important for large-ticket items where it can save hundreds or thousands of dollars.

While we rarely know all that the other side knows, you can often find out more as the negotiations go along. In some cases, it may be that the other person’s hands are tied, by stupid company policies, for example. This is one reason that either negotiations or telling sometimes doesn’t work.