SESSION 11 Negotiating Accepted Offers
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1 SESSION 11 Negotiating Accepted Offers Time Tip of the Day... Fully utilize every moment Take care of the minutes and the hours will take care of themselves. - Lord Chesterfield Objectives This session is designed to help you... Negotiation Advise buyers and sellers on the risks and rewards of negotiation Help your clients decide what, if anything, they would like to negotiate List several negotiating principles Identify and implement best practices for presenting offers and getting them accepted Keep negotiations moving forward Demonstrate your ability to present an offer The process by which two parties each strive to secure their most favorable terms in an anticipated transaction It s human nature. When you buy, you want the most house for your money. When you sell you want the most money for your house. -Anonymous Negotiation Approaches Distributive Negotiating Win/Lose approach Wants a bigger half of the pie Takes extreme positions One person s gain is another s loss Haggling for more Ultimatums Integrative Negotiating Win/Win approach Focuses on underlying needs Strives to create value A shared problem, not a onesided battle High degree of trust and rapport Independently Owned and Operated. 1
2 The Negotiation Process Remember, agency relationships determine your role in the negotiation process. Check with your broker or manager if you have any agency related questions. Prepare Offer Terms Sell Your Position Evaluate Counter Proposal Respond Prepare Identify an ideal outcome Assess alternatives if a deal can t be reached Determine your bottom line Anticipate the other party s motivation, urgency, expectations and options Offer Terms Consider your most important negotiation goals Be mindful of your circumstances Evaluate the market environment Choose your tactics What can you do to assist your buyer client in this step? Sell Your Position Build rapport Humanize your client Show the value of your terms Sell benefits What role do you play in selling your client s position? Independently Owned and Operated. 2
3 Prepare Offer Terms Sell Your Position Evaluate Counter Proposal Respond Evaluate Counter Proposal Respond Review the terms and concessions Compare with your negotiation goals Take nothing personally Recognize negotiation tactics used by the other party Choose the right timing Recognize the possible benefit or risk of delay Consider the benefits of gaining final resolution Submit an appropriate response Emotional barriers to mutually acceptable terms Anger Pride Guilt Worry Regret Distrust Indignation Resentment Obstacles to successful negotiation Die-hard bargainers Lack of trust Lack of motivation Misinformation Spoilers Insensitivity Cultural, generational or gender clashes Independently Owned and Operated. 3
4 Recognize Negotiation Tactics Negotiation Rules Maintain respect for the other party Remain calm. Don t respond emotionally. Each side must make concessions Time can help or hurt you Focus on the package of all terms, not just one Even token concessions can keep an offer alive Reinforce the benefits of reaching an agreement Prolonged Negotiations Independently Owned and Operated. 4
5 What are some reasons why a buyer may offer full list price and terms, and not feel a need to negotiate? Presenting Offers - When you are NOT the listing sales associate Immediately notify the listing sales associate of your offer Be careful in sharing specifics Accept, if invited to be at the presentation* Review selling points with listing sales associate Prepare a current CMA Preset buyer appointment to follow offer presentation *This is not a common practice Presenting Offers - When you are the listing sales associate Best Practices Read and review the offer carefully Ask buyer s sales associate questions for clarification Set the presentation appointment Meet at your office when possible Don t share specifics over the phone Update your CMA Display an enthusiastic and optimistic demeanor Encourage the owner to maintain an open mind Inform of options: accept, reject or counter Humanize the buyer Review key provisions, sell benefits Provide seller net sheet* Answer questions, overcome objections Ask for their acceptance, when appropriate *If applicable, and according to your office policy Independently Owned and Operated. 5
6 Presenting the Offer Early offers with excellent terms are sometimes dismissed by owners, who mistakenly imagine better offers will emerge if they just wait. Why might the first offer be the best offer? Counter offers Advise appropriately Concessions where possible Keep the process moving Closing the transaction Initiate the closing process immediately Work diligently to fulfill all contingencies Monitor all dates and deadlines Communicate regularly with the closing entity Follow up closely with all parties Resolve issues early, involve others as needed Independently Owned and Operated. 6
7 Role Play Presenting the Offer An updated CMA suggests fair market value range of $265,000 - $273,000. Action Items Please complete the following: Look for opportunities each day to meet people, present your business card and offer your services Report your activities and check off completed homework in the CREATE 21 Reporting Site Verify with your broker or manager which party(s) you will represent in a negotiation and under what circumstances Find out what the local customs and procedures are concerning presenting offers Ask broker or manager for an opportunity to observe an experienced sales associate s presentation of an offer Independently Owned and Operated. 7
8 Ask My Broker Notes on things I need to discuss with my broker or manager for this session: Independently Owned and Operated. 8
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