I had a conversation with Aryeh Sheinbein this week that I want to share the meat of, because it changed how I'm approaching two real financial situations on my desk this month.

The opener: do you actually think everything is negotiable?

Aryeh's answer was yes, most of it. My honest answer was that for most of my life, negotiating didn't even dawn on me as an option. I read "non-refundable" and accepted it. I read "this is the price" and accepted it. And I think most of you reading this are closer to my default than his.

Here's the framework that came out of the conversation.

🎙️I chatted about this to myself on my podcast Million Dollar Grit.🎙️
​You can listen on Apple, Spotify, or any web browser.

The Two Negotiation Muscles

There are two modes, and the most important skill is knowing which one you're in.

• Institutional Mode: Banks, mortgage companies, big retailers, faceless corporate counterparties. Full guns. There's no long-term relationship to protect, and the other side has built negotiation room into the system on purpose (think: every credit card will wipe a late fee if you call once a year).
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• Relational Mode: Clients, vendors, partners, anyone you'll see again. Long game, win-win, give a little to bank a favor. Aryeh has a co-investor who keeps asking for discounts; he gives a small one on this deal because there's a bigger one coming behind it.

If you mix the two up (go shark on a relationship, or go quiet on an institution) you leave money on the table both directions.

The Breach Test

This is the one that reframed my sheep deposit. I had a flock under contract, put $10K down (non-refundable per the contract), and walked away when the seller's flock had a difficult lambing season and they tried to substitute a baby for one of the sheep that died. I assumed "non-refundable" was the end of the conversation.

Aryeh's reframe: when the other side breaks their part of the deal first (there's some question as to whether the product they're delivering is the product they sold), the deposit clause loses some of its teeth. The deposit exists to protect against someone walking away for no reason. Walking away because the product changed is a different thing entirely. Worth at least opening the conversation.

The Walk-Away Test

Whoever has more at stake holds fewer cards. Aryeh told the story of his home builder who was a year into building his custom home — framed, customized, can't be resold to anyone else — when the builder started trying to upcharge him for things already in the contract. Aryeh put down 10% and held the line. The builder had millions in play and stopped work for five months before folding. At closing, the builder owed Aryeh money.

Before you negotiate, ask: what do I lose if this falls apart? What do they lose? Then act accordingly.

The Easy Starter Ask

If negotiation doesn't naturally dawn on you, build the muscle on low-stakes asks. Every credit card will wipe a late fee one time inside a 12-month window, and along with it, sometimes hundreds of dollars in attached interest. The call takes four minutes. The worst they can say is no. It's the cheapest gym for the negotiation muscle.

What I'm doing this week:

1. Going back to the bank on the mortgage refi instead of accepting the one-path answer.
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2. Emailing the sheep seller about a partial refund, citing the breach test. Worst they say is no.

If you've been told your whole life that you "shouldn't haggle," or if you read contracts like the printed word is sacred (most people do) this is your reframe.

🎙️I chatted about this to myself on my podcast Million Dollar Grit.🎙️
​You can listen on Apple, Spotify, or any web browser.

xx Julie