In business schools across the country, there's a negotiation strategy that's taught not because it's elegant, but because it's brutally effective—negative leverage. Donald Trump, long before he was President, famously used it in his real estate dealings. One classic case: when negotiating the purchase of air rights from the owner of the Tiffany building, Trump allegedly threatened to erect a hideous structure next door unless the owner sold. The message? Work with me—or suffer a worse outcome.
This tactic—leveraging the threat of mutual destruction—is not new. It mirrors the Cold War doctrine of MAD (Mutual Assured Destruction), where the U.S. and the Soviet Union maintained nuclear arsenals not to use them, but to deter the other side from making a move. Trump’s negotiation playbook borrows directly from this strategy: present yourself as someone willing to go down with the ship if it means taking the other party with you. In other words, the best leverage comes from convincing the other side that you’re crazy enough to follow through.
We're now watching a modern application of this strategy in real time. Trump is once again threatening sweeping tariffs—on China, on Europe and on the rest of our closest allies and trading partners. The goal isn’t necessarily to impose the tariffs, but to scare the other side into a better deal. Similarly, in the Middle East, Trump has leveraged military escalation with Iran to force diplomatic concessions, all without actually wanting to go to war. The point is pressure through perception.
But here's the catch—this tactic only works if your threat is credible. If the other side believes you're bluffing, the strategy collapses. Once the bluff is called and nothing happens, you've not only lost leverage, you've also weakened your future negotiating power. In game theory, this is called a non-credible threat. And this is where Trump’s current behavior may be backfiring: markets and foreign governments are starting to call his bluffs. The tactic is only as strong as the belief in your willingness to carry it out.
How This Applies to Real Estate Negotiations
In the world of real estate, we see this every day. A buyer might say, “If we don’t get a 5% discount, we’ll walk.” Or a seller might insist, “I’d rather hold the apartment than sell it below my number.” These are forms of negative leverage—but again, they only work if the other party believes you're willing to walk away.
I’ve seen deals fall apart because one side tried this strategy, but didn’t sell the performance. Their bluff was obvious, their desperation was visible, and the other side knew it. The power of this tactic lies in being authentically indifferent to the outcome if your terms aren’t met.
For agents, this is especially relevant. Clients often ask us to push hard, to “play tough.” But that only works if we’re actually prepared to lose the deal—or if we’re confident enough to make the other side think we are. If we cave too quickly, or if we’ve overplayed our hand before, our credibility is gone.
Technical Insight: The Bluffing Threshold
Negotiation theory, particularly from the Harvard Program on Negotiation, identifies this strategy under the umbrella of “coercive tactics”, which include threats, deadlines, and walk-away points. It’s closely related to BATNA (Best Alternative to a Negotiated Agreement)—the stronger your alternative, the more believable your threat to walk becomes. Negative leverage, then, is best used when your BATNA is strong or when the other party thinks it is.
The Takeaway
Trump’s playbook is extreme, controversial, and often chaotic—but it contains lessons for negotiators in any field. Negative leverage is a legitimate tactic, studied in MBA programs, tested in diplomacy, and used regularly in real estate. But use it carefully. Your power lies not in the threat itself, but in its perceived credibility.
And credibility, once lost, is hard to regain.
So next time you're negotiating a deal—whether you're buying a condo or representing a seller—ask yourself: Are you really ready to walk away? Because if you’re not, and the other side knows it, the game’s already over.
