Never Split the Difference: Negotiating as if Your Life Depended on It

located next to a growing campus in an affluent city?  That
was irrational by any measure. A little befuddled but still in
the negotiation mindset, my student constructed a label.
Inadvertently he mislabeled the situation, triggering the
broker to correct him and reveal a Black Swan.
“If he or she is selling such a cash cow, it seems like the
seller must have doubts about future market fundamentals,”
he said.
“Well,” he said, “the seller has some tougher properties
in Atlanta and Savannah, so he has to get out of this
property to pay back the other mortgages.”
Bingo! With that, my student had unearthed a fantastic
Black Swan. The seller was suffering constraints that, until
that moment, had been unknown.
My student put the broker on mute as he described other
properties and used the moment to discuss pricing with his
b o ss. He quickly gave him the green light to make a
lowball offer—an extreme anchor—to try to yank the
broker to his minimum.

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After quizzing the broker if the seller would be willing to
close quickly, and getting a “yes,” my student set his
anchor.
“I think I have heard enough,” he said. “We are willing
to offer $3.4 million.”
“Okay,” the broker answered. “That is well below the
asking price. However, I can bring the offer to the seller and
see what he thinks.”
Later that day, the broker came back with a counteroffer.
The seller had told him that the number was too low, but he
was willing to take $3.7 million. My student could barely
keep from falling off his chair; the counteroffer was lower
than his goal. But rather than jump at the amount—and risk
leaving value on the table with a wimp-win deal—my
student pushed further. He said “No” without using the
word.
“That is closer to what we believe the value to be,” he
said, “but we cannot in good conscience pay more than
$3.55 million.”
(Later, my student told me—and I agreed—that he
should have used a label or calibrated question here to
push the broker to bid against himself. But he was so
surprised by how far the price had dropped that he stumbled
into old-school haggling.)
“I am only authorized to go down to $3.6 million,” the
broker answered, clearly showing that he’d never taken a
negotiation class that taught the Ackerman model and how