Like it or not, negotiations are part of everyday life. Whether you’re buying a car, discussing a raise, trying to get your kids moving in the morning, or just deciding where to eat with friends, knowing how to negotiate effectively can significantly impact your success and satisfaction.
As Kevin O’Leary said, “So much of life is negotiation. So even if you’re not in business, you have opportunities to practice all around you.”
The $4 Million Real Estate Deal That Almost Failed
Let me share a story that perfectly illustrates the power of creating options in negotiations.
A top real estate agent walked into my office, visibly frustrated. She slid a cancellation agreement across my desk for a deal that, if it fell through, would cause a domino effect impacting roughly $4 million in connected transactions.
The buyer needed another extension on their financing contingency—their third request. The seller, feeling like they were losing control and being taken advantage of, had drawn a line in the sand: no more extensions.
Instead of accepting defeat, we approached the situation differently:
- We stayed CALM – When emotions run high, we need to slow down, ask questions, and fully understand the situation.
- We identified the seller’s personality type – A decisive person who needs to feel in control.
- We created OPTIONS – We asked the buyer if they wanted to put their $50,000 deposit on the line by waiving their financing contingency if given the extension. The buyer understood the risk and created a Plan B just in case.
When we met with the seller, I handed him two documents: the cancellation agreement and the extension with the waived financing contingency. By giving him a choice rather than pushing for one outcome, we put him back in control.
The surprise? The seller not only granted the extension but did so without requiring the buyer to risk their deposit. Once he felt in control again, the core issue disappeared. It was a huge win for all parties and this and all contingent deals closed.
The PICNIC Method for Negotiation Success
Don’t be afraid of negotiations—they can be a real PICNIC:
- Prepare better than the other side
- Identify common ground
- Confront the challenges, not each other
- Negotiate from your strengths
- Isolate remaining issues
- Create options / Close the matter with clarity
Creating Options Leads to Better Outcomes
In our One To Grow On Community webinar this month, I will dive deeper into this PICNIC acronym bit by bit.
The first two components are of critical importance, especially when the stakes are high. Preparation is key. If you are dialed in prior to the negotiations and have evaluated the key points from multiple perspectives, things should go well for you. You can check out our resource that will guide you in this process, which was adapted from the Harvard Negotiation Project, at our website here Assessments – Momentors Life and Business Coaching Services and click “Preparing For Negotiations.”
And the second letter in the PICNIC acronym is Identify common ground. This is the key to developing long-term relationships and not burning bridges (in addition to Confront challenges not each other). Who knows what the future holds and how parties might work together later. Or if the negotiation is with a loved one or friend – remember Stephen Covey’s advice “Seek first to understand, then to be understood”? It works well here. When you ask great questions and really listen to understand and not to respond, you are laying the foundation for great things to happen. This also will make it more likely for outcomes where both sides create and claim value instead of a zero-sum (or win-lose) game. The negotiation itself is an opportunity to create value.
Three Key Takeaways
- Create options when people feel boxed in, especially with decisive personalities.
- Stay calm in business scenarios and understand that people process things differently.
- Have difficult conversations face-to-face when possible, coming from a place of caring.
Negotiation skills apply throughout life—with friends, family, colleagues, and even ourselves. By mastering these skills and approaching negotiations with a collaborative mindset, you’ll not only achieve better outcomes but also build stronger relationships.
What negotiation are you facing this week? Try the PICNIC method and see what happens!
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