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Haggling down home and car prices like a pro

Fishing has been defined as a jerk on one end of a line waiting for a jerk on the other end.

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Selling big-ticket items such as houses, cars, appliances and jewelry is a lot like fishing. Salespeople, including savvy homesellers, hook you and reel you in by using a variety of negotiation strategies. They use those time-tested tactics on you whether you want them to or not.

Since you can't avoid the salesperson's negotiating ploys, your only defense is to recognize what he's doing. You then have the chance to use some of those tactics yourself -- becoming the fisherman instead of the fish.

It's called haggling. How well you do it could be the key factor in determining the price you agree to pay for your new home or car.

When consumers make major purchases, the most common mistake they make is to assume that negotiating is not an option, says Steven Cohen, who dispenses advice online and in seminars as founder of The Negotiation Skills Company.

It's there, if you can find it
In fact, he says, there is room for negotiation in virtually every purchase.

Roger Volkema, a management professor at American University, touts the Golden Rule of Negotiation: "People will not negotiate with you unless they believe you can help them or hurt them."

You can help the seller by buying, and hurt the seller by going to a competitor or by wasting his time. So unless you're buying something unique, like the Hope Diamond, there is almost always room for negotiation.

The second most common mistake: lack of preparation. "That can be disastrous," Cohen says. "If you negotiate without preparing properly you can actually make your position worse."

A seller aware that you are guessing or bluffing will be unlikely to give an inch.

Haggling isn't unseemly, seat-of-the-pants horse-trading. It's more a freewheeling form of negotiation.

Ready for action
You prepare in three key steps, by:

Three key steps:

Don't assume that the seller shares your priorities. Yours might be price, but the seller's top desire might be a quick sale. Or it might be something that you would never expect.

"People need to think in broader terms and think of negotiation as discovery," says Volkema, author of "The Negotiation Toolkit: How to Get Exactly What You Want in Any Business or Personal Situation."

What you'll need to know to haggle successfully
"I think it's a good idea, when you're making major purchases, to go to several places, shop around not only to make comparisons but to get some confidence," says American University management professor Roger Volkema.

"In the real-estate business," he says, "they say the three most important elements of selling a house are location, location, location. The key to negotiation is information, information, information."

 
 
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