Heading to the negotiating table? Read Daryl Fairweather’s top 9 tips for how to negotiate salary, contracts and more like a boss.
Some of life’s most exciting moments are also the trickiest. When the phone rings to deliver the exciting news you’ve landed that dream job, it’s a source of joy–until feelings of uncertainty and anxiety follow. Is the offer competitive? Do the salary and benefits package match your professional worth? And more importantly, is it set in stone?
Negotiation is a tough tactic, no matter the stage of life. Perhaps you’re selling your home and the new buyer is harping on one line item. Or, you’re buying a home and can’t get the seller to meet you halfway on inspection repairs. Whether negotiating a salary or a contract, it’s important to keep a clear head, do your research, and when available, consult an expert.
Which is exactly what we did, posing these tough questions to Redfin’s Chief Economist, Daryl Fairweather.
“If you learn how to negotiate, you will gain confidence in yourself and your ability to get what you want. That kind of confidence will improve your charisma, and people will start seeing you as someone who can get things done,” she said. “This can help improve your life in big and small ways. You may be able to negotiate a lower price for your home, saving thousands of dollars, or you might be able to persuade a maitre d’ to give you a better table at a restaurant.”
Of course, salary is often the biggest negotiation challenge we all face.
“The most important thing is to stay confident. Don’t negotiate against yourself; have the confidence to ask for an above average salary if you are an above average employee.”
Need help getting started? Daryl’s got a few tips you’ll want to bookmark on how to negotiate salary and more.
1. A new job is the best opportunity to negotiate
“The first time I negotiated salary, I was unhappy as a consultant. I asked for a raise before deciding to leave and my boss said no; I was not up for a promotion. When I left for a new job, I was much more successful. That’s because accepting a new position at a new company is the best time to negotiate, as starting salary determines the base for all future raises. When you ask for a raise with your current employer, they know exactly how much you already make, and likely won’t offer more than 5 to 10 percent more. But when you start a new job, your potential employer doesn’t know what you currently earn (and if they ask, don’t answer, just tell them what you expect to make). You could potentially get a double-digit percent pay increase if you negotiate well.”
2. Practice negotiation in online marketplaces to become comfortable
“If you want to practice negotiating, I recommend going on Craigslist, Poshmark, or other online marketplaces that allow for negotiation. Only make an offer on something you actually want to purchase and own, of course. You’ll see what gets accepted, what receives a counter offer, and what is flat-out rejected. This will make you more comfortable making offers and learn how to get the best possible deal.”
3. Set expectations early
“If you have a phone screen with a recruiter, the earlier you set the expectation of pay, the better. Tell the recruiter what you expect before agreeing to additional interviews. No recruiter is going to turn away a potentially highly qualified candidate because they asked for 10 percent more than the maximum salary the company can offer. Then, after you do get the job offer, you can stick to your guns and hold to that initial number.”
4. Do your research on salary…
“If you are close to an offer or have one in hand, don’t do anything without talking to people in your profession. Talking money can be taboo, but consider asking close friends or family about their experiences. You can also find a lot of information online on Glassdoor and similar sites, about how much people earn in your profession in your city. But be wary of the average salary number as it can vary widely. When it comes to naming a number, figure out the highest amount your employer would pay (not the average salary), and then add at least 10 percent to it as a starting point.”
5. …and home prices
“Find out what similar homes are selling for. Your agent can be a great resource, but you can also do your own research by checking out Redfin’s Offer Insights, which are real-time published anecdotes and data on what it takes to make a winning offer in a given neighborhood. The negotiation doesn’t end after your offer is accepted. If you have an inspection contingency, you can renegotiate based on what is revealed in the report. When I bought my first home, my offer was accepted, but I ended up negotiating again after the home inspection revealed imperfections. When I later sold that home, the buyers negotiated hard, with a lot of back and forth over a small amount of money. Negotiating can be difficult and it’s important to think about the value of your time and peace of mind. There’s nothing wrong with giving in a little bit to save yourself some hassle.”
6. Be willing to walk away
“All of this being said, if someone is trying to bulldoze you, it might be time to walk away. Being willing to do so is the best way to have confidence in a negotiation. You never want to negotiate from a place of weakness, which is why the best time to find a job is when you already have one. You don’t want to be in a position where you feel like you need to make the deal happen.”
7. Know where you stand
“It’s useful to know how willing the other person is to walk away, too. Are you competing for a job against dozens of similarly qualified candidates, or has the position been open for months and you are the only person to receive an offer? It’s the same for buying a home. Are you competing against multiple bidders for the home, or has the home been sitting on the market for months and you are the first person to make an offer? Knowing where you stand can provide insight as to what steps are appropriate.”
8. Learn to negotiate for more than just money
“There’s more to negotiate in a job than just pay. It’s a chance to set expectations around work-life balance too. Let your employer know your expectations for working after hours or on weekends, or working from home. It took me a few years to realize I should stop worrying about how many hours I spend at my desk, and start focusing on my output. I’ve never been the kind of person who pulls all-nighters. I produce my best output when I’m well rested and devoting enough time to my personal life. As such, find an environment where you can truly shine. If you feel chained to your desk or pressure to put in long days, realize there are other opportunities without those kind of pressures. I left my consulting job primarily because of the lifestyle. Since then, all of my jobs have rewarded me for the work I produce, not how many hours it took to do that work.”
9. Don’t show your cards
“I put myself in the shoes of the person I am negotiating with, to figure out what’s the best possible offer they would accept. In game theory you figure out what your opponent’s best move is before you make your own. In poker, the expression “play the player, not the cards” encapsulates that theory. When negotiating, you need to know when to call a bluff, when to raise the ante, and when to cash in your chips–all while maintaining a poker face.”