Negotiation Paper Negotiation For Purchase Of House
Negotiation is a process in which differences between different parties is settled down. At some points one party has to compromise and at some other points other party has to do compromise. Negotiation process should be free of emotions. Proper planning has to be done to make sure arguments are valid. In case of public dealings common place need to be selected for negotiation where both the parties are comfortable. Proper understanding of what the other party wants. There should be complete analysis of what maximum one can compromise and at the same time what minimum can be offered. Below is the paper on negotiation that describe the complete scenario and how the negotiation taken place and its results.
Overview
John and his sister Marialive together. Johnis 25 and Maria is 23. They both are young and energetic. They live in a rented house. They both do odd jobs to cover our expanses. It is their dream to have their own house. Both of them are hard working. They both have our own preferences about the new house. John inherited some property which he decided to sale to get amount for the purchase of new house. My sister has her savings and some jewelry. Our mother gifted that jewelry to her when she was ill. That jewelry is of extreme emotional value for Maria. For Maria the house location is of most importance. (Lockley, 2012)
She wants to purchase the house that should be at least center of both the workplaces. For Maria travel expanse and the hectic schedule because of far off workplace need to be considered for the purchase of new house. For me how spacious the house is important. Most of the places within city are very expanses and beyond his range. John did not want to buy a tiny house in a congested area. I love tranquility and peace. There is third party in this case which is seller. For the seller they both are young and have least experience about Real estate. He wants to take maximum advantage of this situation. Seller thinks that they are young, dumb and soft targets. Seller wants to take the advantage and make them purchase the house, which is best interest of him, and give him maximum return.
He was interested to take advantage of conflict within the buying party. But both the family members are very hard working. They did proper research about the rates that prevails. They consult other real estate agents and analyze the situation. They understood the want of seller and got the point that he thinks them as a buyer that can easily be trapped. John and Maria settled on common grounds to purchase the house. They manage the differences and compromised the extent they can. They make a very good purchase where Maria will not have to sell her mother jewelry to contribute in payments. Money can be arranged from the sale of inherited property. (Teresa Mears, 2014)
John
John feels that he is contributing a major some for the purchase of house. So have right to communicate what he want. John is thinking for long-term. John is support lover. He is bright. He wants to purchase house that depicts what his personality. Urban area is very congested. Moreover the price of even a small house is very high. A small house that only has one room kitchen and wash room is all they can afford in urban area. For him there is improve in transport arrangements and there are transport options that are cheap and comfortable and readily available. John wants to start family for this need room for kids. He has keen interest in gardening and wants to pursue it professionally which will not be possible in apartment in urban area. House in country side is very open. Surroundings give a very cozy look. John has some friends that lives in that area and loved the place. They are managing well and think of their decision worthy. For Maria who did not plot the valid points, for her John is going to settle in countryside only because of his friends. She has not done the necessary planning for negotiation with her brother. Her brother John has instead some very valid pints, which he opened when the discussion started that, convinced Maria. (Finder.com.au, 2017)
Maria
Maria is more interested in comfortable life. For her free time is very important for both of them. They both have very tight schedule and have less time to spend with each other. For her if they buy home at country side then a lot of time will get wasted in travelling. The routine will be hectic. She is very concerned about her career. Even switching job will not be convenient. There will be fewer opportunities. Maria loves urban life. She has her friends circle and do not want to leave it. She is super fun loving often visits top restaurants. Maria deeply respects her brother and his feelings. She thought that his brother got excellent convincing skills. She loves and respects him and his choices. Moreover the idea that they might not need to sale jewelry of her mother, which is of extreme importance to her inspired her a lot. For her having own house will be a great blessing.
Seller
Seller has extensive experience in this industry. He is working in this industry since long. He is very clever and intelligent. Having excellent communication and convincing skill, he is an expert seller.Seller has knowledge about the buyers and their preferences. He completely understands the conflict between John and Maria and wants to get advantage of situation. He knows that they are young and can make quick decisions. (Erica Gellerman, 2017)
Planning For The Negotiation
In life one always face stream of negotiation. Negotiations are unstoppable. Every point of lime you have to do negotiation others. It can be with family member or with some client or business partner. If we take example of family, Brother and sister and other family members negotiate with each other on daily basis. In daily basis negotiation is so common practice that we don’t realize that before negotiating we plan with ourselves how to negotiate and make one point valid that it makes up the argument. In family one need to find out mutual interest and liking. Family negotiations should take place at home. There is a chance of dispute which can create disturbance, so It is better to decide the place and for family matters and negotiations it should be home. The place must be like that it should be comfortable for both parties. In current negotiation paper there are two situations.
- Negotiation is between Brother and Sister about where to buy house. Both have different opinions and preferences.
- Second is between John, Maria and the seller. Seller want to sell the house in best possible rates.
Brother and sister have their own standings. Brother John wants to purchase house in countryside while Maria wants to purchase at urban location. Both have their own points to give arguments. Maria is very understanding. She knows how to make compromises. She loves her family and can do anything for their want.
In every negotiation, there is want of each party. Negotiation arises when there is difference in wants. Each person in negotiation exactly knows what he/she wants. When negotiation is taking place in family for some family matters, it can’t be that straight forward because emotions are involved. But when negotiation is take place at workplace or between seller and buyer it should be executed without emotions. In this paper negotiation is between Brother and sister and seller. Negotiation of couple should be done professionally without any emotional bias. (Jacobs, 2017)
John and Maria are negotiating with seller. In this situation they should prepare themselves to negotiate with seller in ideal situation. What the minimum price at which they should be settled. Like the minimum price of house that can be offered by the seller. At the same time they should analyze what the maximum price they can pay. How much they can afford to pay and financial standings. John and Maria must be aware of the situation. They should know exactly where the negotiation will take place. What the maximum and minimum rates they can afford that can be offered by seller. If the other side is not willing to do any compromise one should know what’s her/his maximum level to which he can do compromise and after it need to walk out.
There should be complete understanding of what other party wants. Maria and john analyzed the seller expectation and know exactly he want. They analyzed that seller thinks that they are young and can be trapped to offers that can pay him high. If not 100 percent but at least estimate what the other party want. John and Maria estimated what the seller can demand for the house of their choice. Likewise the other party in negotiation should know what maximum the can offer and plan accordingly. Analyze the market and market offerings. Visit some other sellers. Same is done by john and Maria. They completely analyzed the market and have knowledge of rate prevailing in the marketplace. They made some graphs and take competitive rates, to make the seller sure that they are fully aware of the market. (Nonko, 2017)
As far as planning of negotiation that was done by me to convince my sister Maria, it totally made on realistic grounds. I made the planning in my mind for negotiating with her about the place we have to purchase the house. I made myself understand and worked to know about what she actually wants and why. I worked for every argument which she can put to defend her choice. I make her understand in such a way that she realized and understood which is best for both of us in long-term. The points that I made were before starting the arguments are below:
We both have to start our family. For it we need a bigger house which has separate facilities for both that families. It can’t be affordable in urban area as it’s very expensive. Secondly hazards on health on living in environment which is away from nature.
The Execution Of The Negotiation
We both agreed in purchasing the house of my choice. As it is the family matter so I handled the situation with love and care. For the additional saving that we got from the purchase of house at comparatively lesser rate we bought a car. It helped Maria in her transportation issue and we got settled on mutual interests. John and Maria made a very significant home purchase. The seller initially offered $320K; John and Maria countered with an offer to buy at $300K and eventually settled on a compromised price of $305K. Upon consulting with other real estate broker, they come to know thattheir offer was a fair and reasonable price. They put a good offer, on common point. (Leonatlaw.com, 2018)
Once John and Maria were in contract with the other seller, they were overjoyed to find out from the bank’s appraisers that the house was worth $313K. We felt relieved with our prudent and careful search and did not relent to the seller’s initial offer. We consulted our lawyer and realized that how useless he is in whole situation of home buying. It is actually the advice or others can take example to trust oneself and do their own homework for every purchase. Because at the end it is you who has to pay and can be a victim of wrong purchase. You yourself should make up your mind and decide what you want and expect. What we have realized that our lawyer actually running from the situation instead of helping us in resolving the situation and making the negotiation process.
There were some other negotiations points about the house that we both agreed to purchase. We both want it to get fixed by the seller. Seller has his own argument related to it. But we have our points to make them fixed before handing over to us. The Repair cost was around $800. In this stance our lawyer helped us a lot and he pursue us and did negotiation with seller for the settlement of it in final value that can be given by John and Maria to Seller. He gave the very valid points. We agreed on mutual interest and make the seller agreed to adjust $600 for repair and maintenance which is due on seller till date. The amount is adjusted from final settlement. (Augusta.edu, 2018)
We learnt about the lawyers after complete dealings that they put, their objectives before more and ours interested in closing a deal more than they wanted to get us a good deal. Our lawyer forced us into offering the asking price. But we thought it was worth the gamble to bid less than that. According to our lawyer we will lose the deal if we do that.But we didn’t follow what he said anddidn’t follow his steps. We actually did our homework, study the market. We made ourselves fully aware so that the seller cannot take advantage by offering us higher rates and by thinking that we are young and can be trapped easily.
Negotiation Results
John and Maria agreed on purchase of house in countryside. Maria saved her mother’s jewelry which is of extreme importance to her. John loved the house as it is spacious and has beautiful view. Negotiation was done very professionally and decision is taken which is best. In relation to purchase of house from seller, Maria and john were very professional and supported each other point. As discussed in Negotiations class and books and support material provided, it is clearly mentioned that you are not supposed to get emotionally involved. Emotional part of brain must be kept aside when doing professional dealings.
Negotiation should not be based on emotions. Seller can emotionally blackmail us emotionally by trapping us in the situation we become ready to pay the higher rates without proper study of competitive rates, through all of the negotiations on the purchase, John and Maria eventually reached the point where they took $15,000 off the originally agreed-upon price. Until the last day, they gave the impression that they were willing to walk away. So the seller offered the best rates because they showed that this is the maximum they have to pay. John and Maria in actual spent 80 percent from the saving they have and the amount they got from the sale of john father property and saved 20 percent. This 20 percent they utilized on decoration of their new house and purchase of furniture. (Martins, 2015).
Recommendations
- Both the parties need to do Compromises
- At some points one party has to compromise and at some other points other party has to do compromise.
- Negotiation process should be free of emotions.
- Proper planning has to be done to make sure arguments are valid.
- In case of public dealings common place need to be selected for negotiation where both the parties are comfortable.
- Proper understanding of what the other party wants. There should be complete analysis of what maximum one can compromise and at the same time what minimum can be offered.
- Planning of the negotiation should be done. Preplanning should be done with all the home work.
- Lawyers can help but in this case they are least concerned. All what they want is to sort out the situation. So it is better to rely on own self and do market research.(Lovering, 2018).
References
- edu. (2018). Negotiating and Execution of Contracts. Retrieved from https://www.augusta.edu/services/legal/guidelines/negotiationandexecutionofcontracts.php
- Erica Gellerman. (2017, April 8). 9 Things You Can Negotiate When Buying A House (other than price). Retrieved from https://www.huffingtonpost.com/entry/9-things-you-can-negotiate-when-buying-a-house-other_us_5986bc2ae4b0f2c7d93f567b
- com.au. (2017, March 21). How to negotiate the best deal when buying a house. Retrieved from https://www.finder.com.au/how-to-negotiate-the-best-deal-when-buying-a-house
- Jacobs, L. (2017, March 1). Master the art of negotiation when buying a house. Retrieved from https://www.privateproperty.co.za/advice/property/articles/master-the-art-of-negotiation-when-buying-a-house/5380
- com. (2018). What You Need To Know About Contract Negotiation, Execution And Review. Retrieved from https://www.leonatlaw.com/Contract-Negotiation-Execution-and-Review.shtml
- Lockley, M. (2012, April 27). Bringing down the house price. Retrieved from https://www.theguardian.com/money/2010/apr/27/bringing-down-house-price
- Lovering, C. (2018). 10 Recommendations for Effective Negotiation of Business Relationships. Retrieved from https://smallbusiness.chron.com/10-recommendations-effective-negotiation-business-relationships-20352.html
- Martins, O. (2015, March 1). The Results of Negotiation. Retrieved from https://www.linkedin.com/pulse/results-negotiation-otavio-augusto-rey-da-silva-martins-%E0%AE%83
- Nonko, E. (2017, December 14). How to negotiate the sale price of your dream home. Retrieved from https://www.curbed.com/2017/12/14/16773992/real-estate-negotiate-asking-price-home-agent
- Teresa Mears. (2014, July 11). 12 Negotiating Tips Every Homebuyer Should Know. Retrieved from https://loans.usnews.com/negotiating-tips-every-homebuyer-should-know