I love Craigslist. I love Craigslist mainly because I am a Craigslist bottom feeding and ruthless negotiator.
It’s a great place to engage immediately in negotiations for low-stakes to no-stakes transactions of all types.
Want a new motorcycle or are you just even thinking about one if it met an incredibly low price? Craigslist is the place for you to start hustling.
Want to get a roommate for your House Hack at the highest possible price? Yup, Craigslist is it.
All of these things can be negotiated and negotiated ruthlessly.
I’ve used Craigslist
Ron and Facing Failure
I was looking for a new bike when I ran into Ron’s listing on Craigslist. Ron, unsuspectingly ran into me as well.
He had listed a fairly road bike for $395 that was a good deal. I wanted a great deal, not just a good deal. I was looking for another bike for a beater bike around the city and Ron was my prey.
Before I made my first opening salvo of emails to Ron, I did some homework. The bike offered new was below the new price for the bike of $599. But I knew that it was in great shape for the price listed. But I wanted an even lower cut of the price. Why? Because the new price of a good is completely irrelevant. Only the price you get for a good is what matters.
When I first reached out I let Ron know I was interested and asked some clarifying questions about the bike itself. He quickly responded and we started an amicable conversation. It was here I dropped my low ball.
“Ron, I love the bike but I can only pay $250. I can pick it up tonight otherwise I can’t come until next week.” – I dropped a low-ball offer and created a case of urgency on Ron’s end.
Ron wasn’t interested and quickly rebuffed my offer but continued the conversation and told me more about the bikes good qualities. He’s a nice guy, but Ron wasn’t providing me a great deal.
That said, I quickly came back and said, “Ron I’d really love the bike, it would really be a boon for me to have such a nice bike but I really can’t pay anymore than $250”.
Ron ended the conversation with “The price is the price.” After this I didn’t bother responding as I assumed the deal was dead, but Ron learned that I was really interested in buying a new bike.
He emailed me again to tell me he had sold the bike for full price, I could tell he was a little hurt at my low-balling him, but told me he wanted to offer me a different bike he had. What a nice guy!
My negotiation failed, but I opened up the opportunity to continue business with Ron. I also learned that failing to win a negotiation is totally fine. I could fail on this level of negotiation a hundred times and I’d only have to win one of these negotiations to make it worth my time.
The Fundamental Tenants of Low-Balling
For me the core to low-balling an offer is not simply 10% or 20% off an offer price. I’m talking 40%+ below the list price. That’s the only thing that works for me.
Why? I only want to buy assets. If I can’t immediately turn my purchase around and sell the good immediately for somewhat of a gain, it’s not a great deal. As a matter of fact, to me it’s not a real asset, it would be a liability or something that will immediately cause me some sort of cost. It’s not something that will drive a true benefit to my fundamental finances. So, why bother bidding any more than this?
To identify the great deal prices, you have to have a good idea as the fundamental prices in the current market and the mathematics underlying the type of asset you’re acquiring.
A Pillar for Negotiating on Other Platforms
During the COVID-19 lockdowns, I’m looking at buying a new car. I’ve got cash and I can buy a car up to $10,000 right now. Do I want to pay $9000 for a $9000 car? Hell no.
I want to pay $4000 for a $9000 car. Right now, car dealerships are suffering and need to sell cars. This is my sole objective in buying the car right now. I’m not in a rush and I don’t need a car right now. So I only want to get the best possible deal right now in case I ever need to re-sell the car due to layoffs or a move, etc.
I’m also looking actively for multi-family homes for myself and my wife as a long-term investment in our ability to house-hack ourselves a drastically lower cost-of-living. Some of the properties I’m looking at are close to a million dollars with “okay” deal fundamentals, but they’re only good. I want a great deal not just a good or okay deal. I’m going to low-ball my offers for these properties.
Craigslist has helped me learn that failure in negotiation is totally acceptable. I’m not failing into a losing deal. I’m failing at just good deals, not great deals.
The fundamentals of a great deal mean that you can turn around and sell an item for more than you bought it at to turn a profit.
If you see a great deal on something you can snap it up quickly, but for all those good deals out there, low-balling is there as your friend to help you push through great prices that can add value to your life if you go through with the transaction.