by Michael
Redbourn
http://home-loan-help.org
©
2009
If you ask most people why they don't haggle more before
they hand over their hard earned money, they'll more than likely tell you that
it's because they don't feel comfortable doing it, but the bottom line is that
there's no reason why asking for a better deal should make anyone feel uncomfortable
or embarrassed.
The reason that most people, and men in
particular, don't like doing it is partly cultural and partly upbringing, andif
you've traveled the middle east, the far east, South America or even Mexico, then
you'll know that if you don't try to negotiate then you're not only considered
somewhat stupid, but from the seller's point of view, you also took all the fun
out of the buying and selling process.
There is a well known
story in Mexico which goes, "How do you make a shopkeeper mad in Mexico?",
and the answer is, "you enter the shop and ask how much something costs.
The store keeper tells you $155 and you pay him the $155 and leave. The merchant
slaps his leg and asks himself heatedly why he didn't ask for more".
Let's
be clear that I'm not talking about negotiating in a coffee shop, or your local
supermarket, but you can definitely negotiate a better price in more places than
you'd probably imagine, and you'd be really silly to buy expensive jewelry, or
a car at the asking price, and you might well be able to lower the price of even
things like dental work if you just push a little.
The First
Truism
a) Something is worth what somebody is willing to
pay for it.
If you want a quick example of this then look
no further than what has happened to real estate prices in the U.S. over the last
year or so. Folks purchased homes at highly inflated prices and lenders approved
mortgages believing that prices just had to keep going up. They went down because
people wouldn't pay the prices.
The Second Truism
You
have the right to ask for a better price, an extended warranty at no extra cost,
or a first-time-customer discount etc. and the vendor or lender of course has
the right to refuse. There is nothing shameful about asking for these things,
and certainly no shame in being turn down.
The Third Truism
The
vast majority of sellers would much prefer to give you a 5-10-20% discount rather
than have you leave the store without buying anything. In lots of countries the
seller will probably follow you down the street yelling that you'll get a much
better deal if you'll just come back, but that's highly unlikely to happen in
Europe or the U.S. or Europe.
You're the one that needs
to ask for the better price, so here are six negotiating tips.
1)
A Bird In The Hand
Offer to pay cash and you'll almost always
get a discount. There are lots of different reasons for this, but the main one
is that it costs the dealer between two and five percent when you pay with a credit
card.
If you want to play with the seller's head a little,
then offer him a Diner's Club or American Express card and then ask if there's
a discount for cash.
They charge merchants almost double
what Master Card and Visa do.
2) Don't Talk Too Much
After
you ask for a discount, keep quiet and wait. It might be difficult, but you must
leave the ball in seller's court.
3) Make Sure The Seller
Spends A Lot Of Time With You
Someone that walks into a
store and immediately asks for a discount will have far less chance of getting
one than somebody that has taken twenty minutes of the seller's time.
4)
Never ever say, "I want to be honest with you".
How
would you feel if after several minutes of conversation somebody said, "Let
me be honest with you".
You'd have to ask yourself
what he'd being doing up until then.
5) Take It Or Leave
It!
Don't ever say, "Take it or leave it".
You'll
hardly ever get a better deal by giving an ultimatum, and you'll more than likely
bring about a quick and sorry end to the negotiating process.
6)
Avoid Saying "What's the lowest amount you'll agree to?".First of all,
the seller will never tell you, and secondly he'll have serious doubts about wanting
to deal with you at all.
Negotiating With Creditors
Negotiating
with credit card companies or other lenders is not dissimilar to negotiating with
vendors.
1) Asking a credit card company to lower your interest,
or forgive a part of your debt is not a shameful thing to do.
2)
A lender would much rather have you repay a part of you debt than have you file
for bankruptcy.
Supposing Negotiating Just Isn't For You.
If
it's simply not in your nature to negotiate, then see if you can get somebody
that you know to do it for you, and if you pay him then you should both come out
like winners.
I used to hate selling my cars, and didn't
want to quibble with the dealership where I was buying the new car, or haggle
with private parties, so I used to call a friend of mine who excelled at wheeling
and dealing, and after finding out what a good blue book price would be, I'd tell
him that anything that he got over and above that price was for him, and we'd
always both end up happy.
If you'd prefer to have a third
party negotiate with your creditors for you, then be sure to choose an agency
or company that's Better Business Bureau affiliated, and if bankruptcy is an option
then check out where you can get a free consultation with a local bankruptcy attorney.
There
is certainly nothing wrong with getting the best deals that you can get, and not
even trying would really be selling yourself short, so next time you want to purchase
something, remember the above tips and put them to good use, and save yourself
a growing amount of money.
