You will be able to set and deliver an opening offer that is ambitious and defensible.
Farah has decided to go first. Her landlord has said he wants S$3,100 a month from renewal, up from S$2,800, and she's going to reply with her own number before the conversation drifts into how much of his increase she'll accept. The question is which number to say, and how to say it so that it's taken seriously.
This lesson covers both. All the figures are examples.
The most common mistake with a first offer is opening at your target. It feels honest. It's also a plan to land below your target, because the other side will almost always ask you to move, and every move from your target takes you somewhere worse.
So open beyond your target, at the edge of what you can justify. For someone selling or asking for pay, that means higher than the target. For someone buying or paying rent, it means lower. The gap between your opening and your target is the room you'll use for concessions in module 5.
Farah's research found that similar three-room units in her block and the next one are listed at between S$2,750 and S$2,950 a month. Her target is S$2,900: in the upper half of that range, so likely to be acceptable, but below the landlord's S$3,100. Her reservation point, worked out from the cost of moving with a newborn, is S$3,050.
Her opening needs to be lower than S$2,900 and still defensible. She settles on S$2,800, the current rent. It sits inside the listing range, she can point to evidence for it, and it leaves S$100 of room to her target.
A number with a reason is far harder to dismiss than a number on its own. The reason tells the other side the figure isn't plucked from the air, and it gives them something to engage with other than your nerve.
Farah's opening: "I'd like to renew, and I'd propose keeping the rent at S$2,800. Similar three-room units in this block and the next are listed between S$2,750 and S$2,950 at the moment, and I've always paid on time and looked after the flat."
The reason has two parts: market data, and her value as a tenant. Both come from her preparation. Notice that the data part doesn't say "the market rate is S$2,800". It names the listings, which the landlord can check himself, and he probably already has.
Lesson 3.3, Plan your opening, questions and concessions, asked you to write your opening line. This is where its reason earns its place.
If opening ambitiously works, why not open absurdly? Because an anchor only pulls if the other side treats it as a serious number.
Suppose Farah opened at S$2,400. There's nothing to support it: no listing in the area comes close. The landlord has three ways to react, and none of them help her. He might feel insulted and stop negotiating, deciding to find a new tenant. He might stop trusting her numbers, so even her later, reasonable figures are treated with suspicion. Or he might simply ignore it and repeat his own S$3,100, which means her anchor never set at all.
The test is whether you could explain the number to a fair-minded friend who knows the market. If you'd be embarrassed to, it's too far. Ambitious and defensible is the goal. When in doubt, choose the most favourable figure you could still point to evidence for, and stop there.
The same applies to Wei Ling's salary. Asking for S$6,400 when listings for similar roles top out at about S$6,400 is ambitious and defensible. Asking for S$9,000 isn't, and a recruiter will hear it as either a mistake or a sign she won't be flexible.
How you deliver the number matters nearly as much as which number it is. Say it once, in a normal voice, with the reason. Then stop talking.
The pause afterwards feels long. Most people rush to fill it with something that weakens the offer: "but I'm flexible", "I know that's a bit low", "of course we can discuss". Every one of those tells the other side the number isn't firm, and invites them to push. Apologising for a reasonable number is the quickest way to make it sound unreasonable.
So say your piece and let the other person respond. If they're quiet, wait. If they push back, you'll respond with questions and planned concessions, not with a second explanation of the same number.
This is harder than it sounds, and it gets easier with practice. The activity asks you to write your opening and say it out loud, including the silence that follows.
Write your opening offer with its justification in one or two sentences and practise saying it aloud, followed by silence.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).