I wrote this article a while ago and then lost track of it. I wonder if I can manage to apply these principles to buying a house?
Someday you might find yourself in a situation when you want to buy something that doesn’t have a price tag – it might be in a souk in Morocco or a garage sale around the corner. You can do one of a couple of things in this situation: you can walk away, you can pay the asking price, or you can try to bargain.
If you’re like most people you’ll pick one of the first two choices. Having grown up in a country where bargaining is not the norm, being thrust into a situation where bargaining the price is not only necessary but expected can be a bit stressful. I lived abroad for just over a decade and while I can’t claim to be an expert at bargaining, I can offer a few tips for getting through the process fairly painlessly.
* Remember: the more invested you are in the transaction, the more stressful bargaining will be. Make it into a game if you can. Start small and practice bargaining for less expensive things – ask for first customer (of the day) discounts or bulk discounts if you are buying more than one item.
* Ask yourself what you would ultimately be willing to pay for the item in question. This may or may not be easy or accurate depending on how much you know about the item in question. If, for example, it’s a local craft item, you might be better off doing a little shopping around before you start the bargaining process to get a sense of the general asking price. Once you have a sense of the going price for an item, setting a price in your mind will at least give you a figure to refer to once you start the bargaining.
For instance, when I first moved to Egypt, I went to a neighborhood florist to ask how much their stalks of lucky (twisted) bamboo cost. While I didn’t know how much such things cost in Cairo, I knew that I’d paid about $2/stalk when we were living in Dubai so that was where I set my mental price.
* Ask the merchant how much the item is and compare it to your mental price. If he names a figure that is higher, then you know you want to try and get him to come down. If he names a figure that is lower, then you know that you either over-estimated the cost yourself or perhaps the item in question isn’t the highest quality. Adjust your price reference point accordingly.
When I asked about the lucky bamboo, the florist looked me up and down, trying to decide how much he thought he could get me to pay, and told me I could have three stalks of lucky bamboo for 100LE (about $20) – much more than I’d had in mind to pay.
* Suggest a lower price. What’s the worst thing that can happen? The merchant will either say no or make a counter offer.
When the florist gave me his price, I shook my head and told him that his price was too high. I countered with 10LE / stalk, a price much closer to my mental price.
* Be friendly and smile, but don’t appear to be too invested in the item in question – it’s a negotiation not a confrontation! Remember, the likelihood is that you will find the same item in another shop on another occasion. If you act too interested in the item you will lose some of your negotiating leverage.
When I countered with my price, the florist shook his head and said that my offer was much too low. But he was willing to come down to 90LE/ three stalks.
* You may need to walk away to seal the deal. There is risk in this ploy – the merchant might let you leave! But more often than not, truly acting disinterested enough to walk away will lead to a drop in price.
Because I had only just arrived in Egypt, I wasn’t sure what the local price for bamboo truly was. However, there were many other florists in close proximity to the one I tried first so I decided that I would shop around a little bit before buying. I thanked the florist for his time and walked out. I was around the corner and down the street when he came after me with a counter offer of 75LE for three stalks. I hesitated and then countered with 50LE/ three stalks. It was still more than I wanted to pay overall, but the look on the florist’s face let me know that my price was pretty close to the going rate.
* Realize that some items have more bargaining room built in than others. If something is very much in demand and it is high tourist season or a tourist area, the merchant doesn’t have that much incentive to sell it for too low a price. Sometimes, however, you can get a good deal on multiple items – several pairs of earrings or a couple of carpets. I have gotten nice discounts on hand crafted tapestries this way.
* A language barrier isn’t always a problem. I don’t speak very much Arabic and many of the merchants I dealt with spoke very little English. On a different occasion I stopped to ask how much a small potted flower was. The man at the garden center named a good price so I told him I wanted four. I meant four plants but he thought I was making a counter offer and lowered his price! I bought the four plants for the lower price and we both had a laugh over the misunderstanding.
On another occasion, while on a trip to Thailand, I was bargaining for a long silver chain. I had looked at a few different lengths and styles and had a mental price in mind. We finally came to an agreement and imagine my surprise when I discovered that the price we’d agreed on was for both chains I’d admired, not just one!
* If you don’t like the merchant – if they are rude, aggressive, or otherwise make you feel pressured or uncomfortable – leave. You can always find someone more pleasant to deal with. Buying something from someone who upsets you not only rewards bad behavior but also taints your good feelings about the item you have purchased.
If you are a tourist in a foreign country, don’t expect to get the same price as the locals – that way lies frustration! Be flexible and fair. Decide on a price you’d like to pay, but leave yourself some wiggle room. The most important thing is that everyone leaves the deal feeling satisfied with the transaction. Are you happy with the price and the item? Then it doesn’t matter if you got 10, 20, 50% — or nothing– off.
