Make the Other Side Name a Price First
By allowing the other side to name its price first, you may get a chance to counter with a number that is lower than what you would have offered initially – even if you do relinquish the opportunity to set the “price anchor,” which is the starting price point from which it can be hard to move. Of course, the initial price named by the seller may anchor you at a higher price, and this is where doing your homework can help. By knowing the competing prices, you may be able to significantly lower your anchor before negotiations start.
Michael Soon Lee, president of EthnoConnect and author of “Black Belt Negotiating,” is adamant about this point. He says naming a price first limits how low you can go in negotiations – even if you’re trying to establish a low anchor. After that, every counteroffer will be higher.
Lee states that you shouldn’t ever name a price. Once you do, the seller could agree to it and end negotiations – and it’s possible that the seller would have been willing to go lower.