Science 1, salesman 0. Make them an offer they can’t refuse. Bidding a precise amount—say, $14,550 instead of $15,000—boosts your chances o...
Make them an offer they can’t refuse. Bidding a precise amount—say, $14,550 instead of $15,000—boosts your chances of closing the deal on your terms, finds a new study in Experimental Social Psychology.
Used-car buyers who opened negotiations with an exact figure received a final sale price roughly $700 lower than those who started with a round number. Researchers also found that precise bids led to favorable terms while selling a house and asking for a raise.
Here’s why: Your asking price speaks volumes to the person you’re negotiating with, says study coauthor Malia Mason, Ph.D., of Columbia University. A precise figure gives the impression you’ve done some research or preparation and that your offer is based on facts, she says. But a round figure implies you’re just throwing a number out there, and that you’re uncertain of the item’s (or your own) real value.
“This effect plays a significant role in both the counter-offer and the final settlement figure,” Mason adds.
When you make an offer, be exact—but don’t go overboard. For example, if you’re bidding on a house, an offer calculated down to the dollar (like $269,543) is overkill, Mason explains. You want your proposal to seem thoughtful and informed, not crazy. It also helps to have several pieces of data ready to back up your pitch, like recent sale prices of similar houses or vehicles, or projected resale values. “Try to show the logic behind your proposal,” she advises.
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