Tuesday, March 23, 2010

When asked by the other side to name a dollar figure, is it okay to state my range?

Not unless you can be happy with a deal that is at the least favorable end of that range—or worse. If you tell someone that you would pay $20,000 to $25,000 for a piece of property, rest assured that you will pay at least $25,000. That is the only number he will pay attention to.

The only reason to mention a range occurs toward the end of the negotiating process, to discourage the other side from pushing you beyond it. After several rounds of back and forth on a dollar figure, you are at $23,000, and the other side is at $30,000 and seems to be pushing for a deal at approximately $28,000. You could say, "My preferred range walking into this negotiation was $20,000 to $23,000, but not above $25,000." Revealing your range may make it easier for the seller to accept $25,000 because he will feel that he has pushed you to the top.

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