In these tough financial times learning the art of negotiation can come in handy and giving useful tips is a study, which says that asking for an exact and accurate amount rather than a rounded figure can give a major advantage during any negotiation.
This research was undertaken by Columbia University Professors Malia Mason and Daniel Ames and doctoral students Alice Lee and Elizabeth Wiley.
"What we discovered is there is a big difference in what most people think is a good strategy when negotiating and what research shows is a good strategy," said Mason. "Negotiators should remember that in this case, zero's really do add nothing to the bargaining table."
To affirm their findings, the researchers asked participants to engage in daily scenarios such as buying jewelry or negotiating the sale of a used car. During these situations, concerned individuals were asked to make an opening offer using a rounded-off dollar amount, while other people were told to use a precise dollar amount; for example $5,000 vs. $5,015.
The results disclosed that people making a precise offer such as $5,015 versus a rounded-off dollar amount such as $5,000 were seen as having done their homework and considered to be more informed about the true value of the product being negotiated. In such situations an individual sees less room to negotiate or bargain.
"The practical application of these findings - signalling that you are informed and using a precise number - can be used in any negotiation situation to imply you've done your homework," Mason concluded.
In case of real estate markets, a research conducted by Zillow, the online real estate site, found that majority of people make an opening offer using a rounded-off dollar amount and that only 2 percent of people list their homes with precise dollar amounts.
