opinion

Adventures in Dealmaking: Having Negotiations in Good Faith

Adventures in Dealmaking: Having Negotiations in Good Faith

It is a matter of personal ethics that I would never tell a potential buyer that I have “another buyer” unless I have another buyer. Sometimes, if there are many buyers in various stages of due diligence, I’ll tell them exactly how many I’m dealing with. Credibility and reputation matter to me — but to some, not so much.

Does anyone honestly believe someone when they say, “I’ve got other people interested”? Not usually. Even though I don’t tell anyone this without truth behind it, I doubt they believe me half the time, either. It is probably just dismissed as a sales technique, until they lose the bidding war on a property and it gets sold to the other guy.

Everyone has their negotiation methods and tactics, but the truth is, your reputation and credibility are the most valuable tools you have in any negotiation.

But these are the games that amateurs play with people, and most of the time, there is no other buyer. Not only is that unethical to claim if untrue, but it’s also negotiating in bad faith. Some dirty brokers take it too far.

About three years ago, I was negotiating a domain purchase. The price was somewhere around $35,000, I believe. The domain was valuable, but it had been up for sale for quite some time. When it comes to domains, pricing is often determined by how long the seller wants to hang onto it. You’ll see valuable domains drop in value to get them out of their portfolios.

The domain seller came back to me with the “I’ve got another offer” stunt — the level up from “I’ve got someone else interested” — and said the price they were negotiating was about $10,000 more than my offer, basically full asking price. But, most domains don’t go for the full asking price, so I knew something was amiss.

As “The Dealmaker,” I’ve seen this game before. I knew the odds of this specific domain having a pending offer when I also made an offer were improbable. The truth was, this guy wanted more money; it had nothing to do with another buyer, and we both knew it. Even at a higher price, though, the domain was still worth it, so I offered a bit more money to secure it for my client.

The seller continued to claim they were waiting for the funds to be wired from that genuine and very legitimate “other buyer.” Wow, what a nice guy — negotiating with another party while he’s got an inked deal with someone else. Classy. Reputable sellers, buyers and brokers don’t play these games.

My client was willing to pay the full asking price, but they wanted a deal, or at least to feel like they tried. What killed the deal was that they didn’t like the game the seller was playing, and neither did I. Because trust in the seller was lost due to the silly games, the buyer walked away, partially out of spite. There was a slim chance that the domain was pending sale, but that wasn’t the case.

The other big tip when negotiating your deal? Be prepared to walk away, and mean it when you do. If someone is still sitting at the table, that means they’re still negotiating and ready to make a deal. Sometimes walking away is the strongest move you have to get what you want.

Years have gone by since then. The last time I checked, that domain was still available at the same posted price and contact details. My client just bought something else instead, and the seller missed out.

The moral of the story? It doesn’t matter if you’re negotiating a small deal, a multimillion-dollar deal, or threatening to take a toy away from your kids if they can’t play nicely or share. Everyone has their negotiation methods and tactics, but the truth is, your reputation and credibility are the most valuable tools you have in any negotiation.

Juicy Jay is best known as the CEO and founder of JuicyAds. As “The Dealmaker,” his brokerage Broker.xxx is an adult marketplace that helps people buy and sell adult websites, businesses and domains.

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