NEGOTIATING LEVERAGE

One of our followers is selling his BMW convertible. This reminds me of a story about negotiating leverage. Twenty-five years ago I owned a Triumph Spitfire. For those of you who are not familiar with the Spitfire, it spent more time with the hood up then it did on the road. The time had finally come for the Spitfire to go away.

I put the car out with a 'for sale' sign. I was a reluctant seller of the car. I was asking $1800 and after a couple of days I had two parties who were interested in the car. So I scheduled them both for a fall Saturday. The car looked great and the hood was down. A college guy and his brother were scheduled first.

We took the car for a test drive and they decided they wanted the car. The older brother said, "Put our your hand." I put my hand out and he put 17 hundred dollar bills in my hand. "How does it feel?" I replied, "It feels one light." He said smugly, "It is $1700."

I replied, "I have someone coming this afternoon who wants the car." He said, "$1700 in hand is better than $1800 in the bush. And it is only $100 short." I decided to speed up the negotiations. "Actually it is $200 hundred short. I just raised the price to $1900."

The older brother looked surprised and said, "You can't do that!" "Of course I can, and I just did. If I were you, I would hurry. I am a heartbeat away from raising the price to $2,000." He pleaded, "Would you take the $1800?" "Well, I just raised it to $1900. But you seem like nice guys, I will give it to you for $1800." They gave me five twenties and I gave them the keys.

They were negotiating with no leverage. They really wanted the car. Ultimate leverage comes from being able to accept either outcome. I was truly indifferent whether I sold the car or not. They never had a chance.

Cheers, Mike