Mike Browning

Tag: Anchoring

  • Can’t Argue with This Reasoning

    Can’t Argue with This Reasoning

    Convincing works even less in personal relationships than in business.

    Continuing from yesterday’s post about too many reasons or explanations…

    I’ve gotten pricklier with age, so it doesn’t happen to me much anymore — but I see it all the time with people close to me.

    Someone asks them to do something, and they say no. But instead of leaving it there, they give a reason why.

    And that’s when it starts.

    Because when you give someone a reason, you give them something to argue with.

    Suddenly, they’re explaining why your reason doesn’t matter:

    • “You don’t really need to do that thing.”
    • “This is more important.”
    • “You’ll have more fun if you just do this instead.”

    In other words, they’re trying to convince you that what they want is really good for you.

    It reminds me of casino operators trying to get gambling legalized in Texas — pitching us on how great it’ll be for everyone, when really, they’re the ones who get rich. But that’s another story.

    Here’s the point:

    • Learn to take “no” for an answer. You’ll feel better, and some people will return the favor — which is still better than you’re getting now.
    • When someone asks you to do something you don’t want to do, give one reason:

    “I don’t want to.”

    That’s it. You can’t argue with it.

    Here’s the pretzel twist back to real estate:

    I’ll never try to talk you into selling. If you’re not ready, you’re not ready. I might follow up occasionally, but I’ll never pressure you.

    My job is to give you information and advice — to help you see how that might get you where you want to go. Not to tell you where to go. (And if I ever do, you have permission to tell me where to go.)

    Is there ever a bad time to stay up to date on things, in a no-pressure environment? You may never be ready to sell, and I’ll never try to convince you. But it’s always smart to be ready.

    Click below when you’re ready to start with that.

    Got a lot you might want to sell?
    Get a FREE, no obligation report on what it could sell for today.
    Get Your Lot Valuation

    Own land instead?
    Get a report for that here:
    Get Your Land Value

    Just a glutton for punishment?
    Sign up now to get more articles like this in your email.
    Sign Up Now

  • More Than One Reason? More Like No Reason.

    More Than One Reason? More Like No Reason.

    If you’re trying to convince, you’re already losing.

    Awhile back, one of my clients had a tract under contract he planned to develop. During due diligence, he realized the timing wasn’t right.

    We tried to get a price reduction to reflect the longer hold time but failed (so far).

    So he dropped it.

    It cost me a commission in the short run, but it was the right call. And long term, that’s better for me too. If my clients make bad deals, they can’t come back for more.

    When he backed out, he gave me a long list of reasons to send the seller in hopes of getting a price cut:

    • High construction loan rates
    • High mortgage rates slowing the housing market
    • Oversupply of lots
    • Overestimated job growth
    • Utility capacity issues

    All true. All reasonable. But also too much. I told him it was a bad idea, but he wanted to send it — and at the end of the day, it’s my job to do what you want.

    Nassim Taleb put it well in Antifragile: if you need more than one reason to do something, you’re trying to convince yourself. One solid reason should be enough. The more you pile on, the weaker your case sounds.

    My client wasn’t trying to convince himself — he was trying to convince the seller — but I still think the long list worked against us. Instead of being persuasive, it diluted the point.

    We would have been better off keeping it simple:

    “We think this is a 7–10 year play, not immediate. We’re still interested, but at a lower price. If you’re not ready, we understand. Call us when you are.”

    Would that have changed the seller’s mind? Maybe not. But the odds would’ve been better.

    It’s the same as with anchoring in negotiation:

    Fewer words hit harder. “It’s too expensive” carries more weight than a 10-point memo. People fill in their own reasons — and their reasons are always more powerful than yours.

    The lesson: you only need one good reason to act. More than that, and you’re either overselling… or talking yourself into something you shouldn’t.

    And speaking of one good reason — do you need more than “it’s a smart idea” to want the most current market info?

    Click below to get it.

    Got a lot you might want to sell?
    Get a FREE, no obligation report on what it could sell for today.
    Get Your Lot Valuation

    Own land instead?
    Get a report for that here:
    Get Your Land Value

    Just a glutton for punishment?
    Sign up now to get more articles like this in your email.
    Sign Up Now

  • Anchoring (as in Your Top Lip to Your Bottom Lip)

    Anchoring (as in Your Top Lip to Your Bottom Lip)

    There are very few things that can’t be improved with less talking

    People think negotiation is all about talking. Or intimidation. Or acting like it’s a high school debate class.

    It’s not. A lot of the time, the less you talk, the better you do.

    There’s a concept called “anchoring.” It’s when someone sets the first number on the table, and everything after that gets compared to it — whether you like it or not. That number creates a reference point in everyone’s head, even if it makes no sense.

    It can even work when the number isn’t connected to the negotiation at all. If, right before we sit down, someone mentions the Powerball jackpot is over $700 million, that sticks.

    Now, if we’re negotiating a tract worth $5 million, you’re not suddenly walking away with $140 million just because of the Powerball number. But that huge figure can still shape the conversation in subtle ways.

    Even crazier? You don’t need numbers at all.

    If you ask me what something costs, and I say, “It’s expensive,” or, “It’s affordable,” I’ve just anchored the entire discussion.

    You might argue that “expensive” to one person could be “cheap” to someone else, but it doesn’t matter — the frame is set. People fill in the blanks based on their own reference points. And once that frame is in place, you’re steering the deal before it even starts.

    Most people try to anchor with words. They throw out their price first and have a big pitch to back it up, explaining why it’s “fair.” Sometimes, that works. But a lot of the time, silence works better.

    Here’s why: once a number hits the table, human nature takes over. People hate awkward silence, so they start filling it. And the more they talk, the more they second-guess themselves. I’ve watched buyers negotiate against themselves without me saying a single word.

    Example: I was at the table on a land deal a while back. Buyer comes in low. Really low. I didn’t argue. I didn’t counter. I didn’t defend the price. I just sat there.

    Thirty seconds later, he starts explaining why his offer “makes sense.” Another pause. He talks again: “I could probably come up a little if we can work out the terms.” Another pause. Then comes: “Okay, maybe we can do X.”

    I hadn’t said a single thing. We didn’t end up making a deal — we were just too far apart — but it’s still a perfect example of anchoring without saying a word.

    Of course, most negotiation today doesn’t happen at a table. It’s remote and electronic now. But the principle is the same.

    As a broker, I’m required to respond when someone reaches out to me. That doesn’t mean I have to engage.

    So if a lowball offer comes in on your property, I reply as soon as I see it — but all I say is:

    “Thanks, I’ll review with the seller and let you know what he says (if anything).”

    Then I come to you, and I usually recommend silence as the best strategy. You’re always in control, so it’s your call, but if you agree, we sit tight.

    Before long, if they’re serious, they come back to us — either explaining themselves or raising the price.

    People think power in negotiation comes from talking. The truth is, most of the power comes from not saying what the other side wants you to say. The less you explain, the more they have to. And when they’re talking, they’re usually giving up leverage.

    When you’re ready, click below. No pressure, no cost, no obligation.

    Got a lot you might want to sell?
    Get a FREE, no obligation report on what it could sell for today.
    Get Your Lot Valuation

    Own land instead?
    Get a report for that here:
    Get Your Land Value

    Just a glutton for punishment?
    Sign up now to get more articles like this in your email.
    Sign Up Now