Negotiation can be a powerful tool to save you money, yet many people never negotiate because they think it is in poor taste or they are afraid their attempt at negotiation will be denied. In my experience, more than half of the time you try to negotitate, you will be successful. With odds like that, and considering negotiation can save you as much as hundreds of dollars at a time, why not negotiate more often?
To negotiate successfully, you must be willing to walk away. We hear this advice often, but it is quite a different story to actually try to negotiate and yet be willing to walk away.
My husband and I were apartment hunting just a few months ago, and there was one apartment in particular that we loved. It had two bedrooms upstairs as well as three rooms downstairs that could be used as bedrooms or a study. The apartment was almost twice as big as the apartment we were squeezed into with our three small kids. The problem? The rent was at the upper end of our budget, and that was not including utilities, which would easily cost us $200 to $300 more a month. We simply couldn’t afford it.
While the landlord understood our situation, he was eager to rent and had several people interested in the apartment. We walked away because we couldn’t negotiate a lower price. (The apartment was priced fairly for the market, so I didn’t blame the landlord for not wanting to negotiate.)
We continued our apartment search and were about to sign a lease for a much smaller apartment when the landlord of the larger apartment called us. This was three weeks after we walked away, so we were surprised to hear from him. We were even more surprised when he offered to pay all of our utilities if we signed a multi-year lease. We now pay $30 more a month for rent than he originally advertised, but he pays our heat, gas, water, trash and electric. We are easily saving $200 a month. We signed a 2.5 year lease, so over the life of the lease, we will save a minimum of $6,000 in utilities by negotiating AND being willing to walk away.
Our situation was fairly unique in that we were good prospective tenants with strong credit, and he had a few other potential tenants not work out. However, if we had not been willing to walk away, we would not have secured such a good deal. As much as we loved the apartment and as much as we wanted to live there, we found it more important to stick to our budget.
Negotiating can save you money if you are willing to make an offer, AND if you are willing to walk away from something you really want if you can’t get the right price. While it may be difficult to forego what you want because you can’t get the price you are negotiating, know that you are making the right decision for your financial situation.
Do you negotiate? How successful have you been?
*Photo by oooh.oooh on Flickr*