From John DeGroote’s Settlement Perspectives
I recently wrote One Use for an Unnecessary Confidentiality Clause, where I outlined a tactic that helped me buy a house I really wanted. In that same deal I learned how to stop what Chester Karrass describes as “the nibbler” with a technique that can translate well beyond your next home purchase — whether you are settling a lawsuit or just working to close your next business transaction.
While you might not know him by name, you know the Nibbler already. On the cusp of getting your deal done, your opponent asks for just a bit more — we’ve all heard something like “if you’ll pay today’s mediator, too, we will accept your settlement offer.” If you’re in a one-time deal with the other side, you don’t want to give in to the Nibbler. The costs are too high, with no chance of return on the back end.
As I worked to buy my house I had reason to believe I was dealing with a Nibbler, and he had a golden opportunity to ask for a little more. I had faxed him a contract, he had simply responded “no,” and I was about to amend my written proposal with a higher number. I knew he would add a few thousand dollars to any offer I made at that point — it’s the classic move of the Nibbler. I needed a way to avoid a counteroffer that would put me above a fair price for the house.
In addition to requiring the confidentiality clause that I wrote about previously, I had my real estate agent call the other side with a proposal: we might get the deal done by increasing the purchase price by $5,000 (or whatever it was), but we could only do it by presenting the number to my wife as a “done deal” — she was fed up with the negotiation process and needed to either buy the house or abandon the talks and return to our Seaside vacation. The seller would have to mark up my old proposed contract with a new price and present it to us for acceptance, and he had no sense for whether we would ever increase our bid by more than the $5,000 I would suggest.
We put our plan into action, and my seller made the final move. When he sent back the contract showing the price I had informally proposed, I was able to immediately accept “his” counteroffer — with no nibbles on either side of the deal.
Fortunately I had read Chester Karrass’s book Give & Take before I bought my house, so I knew the signs of the Nibbler. Karrass describes one Nibbler as follows:
I know an army colonel who never buys a suit without nibbling for a tie. He’s been doing it for twenty years all over the world. It rarely fails. He usually gets a free tie. In the parlance of negotiation my friend has become a skilled nibbler.
Why does it work? Karrass tells us:
It works because most people are impatient. They want to close one deal and get on with another. People want to be liked. . . . In the case of the army colonel, the clothing store merchant has mentally completed the transaction. The sales ticket is written and tailor chalk marks are all over the suit. All that prevents closing the deal is a light impediment — a free tie.
As you work toward resolving your dispute, stop this costly tactic before it starts. While Karrass gives us a few tips on how to deal with these tactics in Give & Take and The Accidental Negotiator gives us a few more here, I believe the best way to stop the Nibbler is to anticipate his final move before it happens, much like I did when I bought my house.
Think about it. If you plan to offer $50,000 to settle your case, is it better to truthfully say to the other side: “We’ll settle the case for $50,000,” or “I do not have the authority now, but I think I can get my client/boss/partner to pay $50,000 if you can confirm your client will accept it”? If you propose a number both parties can work toward, rather than making an offer your opponent can nibble on, you’ll stop the Nibbler before he can start.
Of course, there are times when you want the Nibbler to bite. But that’ll have to wait for another post.