In the world of negotiating, there’s one very important rule that everyone should abide by, as it has the potential to dramatically change the outcome: Never accept the first offer. Accepting the first offer can be detrimental in a number of ways. Not only will it cause you to question your decision, but it will also leave you wondering if you could have gotten a better deal had you negotiated more. It is always in your best interest to negotiate the first offer and here’s why.
The First Offer is Rarely the Best Offer
The first offer is more of a gauge than an actual offer. It is the other party’s way of feeling you out to see what you will take. In most cases, it is usually at the lowest end of their range and is used merely as a starting point. For example, if the hiring manager for a new job offers you a salary of $75k, this is more likely to be a starting range than the actual amount they would be willing to pay. It’s always in your best interest to negotiate further and you should assume there is more money in the coffers.
They Are Expecting You to Negotiate
If you take the first offer, you are likely to leave money on the table. That’s because the other party is expecting you to negotiate. Consider buying a car. People rarely walk up to the dealer and say “I’ll take it and pay the sticker price.” The car dealer is almost always waiting for the customer to negotiate the price. The same is true when negotiating salary or a business deal. It is expected that you will counter the first offer, so go ahead and go for it because you could end up with a much better deal.
There are Plenty of Opportunities Out There
It can be tempting to accept the first offer at times, especially if you are emotionally invested in the deal. This happens frequently when homebuyers fall in love with a house or when someone is finally offered a job at their dream company. That said, you should never feel pressured to accept the first offer and settle for less because there will always be other opportunities. If one person made you an offer, you can expect that someone else will be willing to do the same.
You Will Regret It
Imagine you see a car for sale for $10k. You think to yourself, I better snatch this up before someone else does, so you make the seller an offer of $8500. To your disbelief, they immediately take the offer without countering. Do you leave feeling like you just walked away with a great deal, or do you leave wondering why they accepted your offer so quickly? More than likely, you will begin questioning yourself and wondering if something could be wrong with the car. You may also be thinking that you should have offered even less. Either way, you walk away feeling dissatisfied with the deal. Accepting the first offer without uncovering how high or low the other party would have been willing to go will almost certainly lead to regret.