hello!€¦ · 13. staying focused on your clients needs - avoiding agency violations 14. barriers...

Hello!I am Katheryn DeClerck

You can reach me at 845.629.3504 Or: [email protected]

Also…...Facebook @InstructorKatheryn

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WELCOME TO : Negotiation Styles, Matching The Deal to the Style

Negotiation Styles, Matching The Deal to the Style

Copyright © 2018 Katheryn DeClerck. Real Estate Instructor - All Rights Reserved.

1. Understanding the goal - Agency review2. Why do we negotiate? And what about?3. Role play exercise4. Motivations - What is of value to your client?5. Negotiation styles - Matching the style to the

client and the situation6. Preparations for negotiating

Our agenda

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7. Knowing your clients’ goal8. Do your homework - pricing, assessment, taxes

and market stats9. Elements of negotiation10. Adding value to the negotiation11. Keeping good records during communications12. Strategies for dealing with multiple offers

Our agenda - continued

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13. Staying focused on your clients needs - avoiding agency violations

14. Barriers to successful negotiation and how to avoid them15. Role play - introduce problems and how to handle16. How to improve your skills at negotiating

Our agenda - continued

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The Law of Agency:

Whom do we Represent?

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Whom do we represent?× Seller× Buyer× Both

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How do They Differ?

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Clients:Fiduciary Duties OLDCAR× Obedience× Loyalty× Disclosure× Confidentiality× Accountability× Reasonable care

Customers:Fair and Honest Treatment

Section 443 of Real Property LawProvides for informed consent and written acknowledgment of dual agency in the sale or rental of 1- to 4-unit properties and condominiums and cooperatives in any size building

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1st

Substantive meeting

What does it mean to

negotiate?

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To confer with another so as to come to terms or

reach an agreement

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Who participates in a negotiation?

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Why do we negotiate? And what about?

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The ultimatum game

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One person is the allocator and one

is the recipient

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The allocator is handed $100 in order to keep it, they must share a portion of it with the recipient. The recipient can accept or reject the offer. If rejected, then neither gets anything . It can be divided in any fashion except not a 50-50 split.

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What were the

outcomes?

What are the underlying interests?

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What are the underlying interests

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Issue× Want to be

FSBO× Cut your fee× No sign× No open house× No FHA× Buyer won’t

sign anything

Interest× × × × × × ×

Why do negotiations fail?

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Examples of failed negotiations?

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Negotiating Styles


Distributive Negotiations

Copyright © 2018 Katheryn DeClerck. Real Estate Instructor - All Rights Reserved. �25


Definition of distributive negotiation× One decides the terms of the

agreement and wants the other side to acquiesce

× One makes a demand and sticks with it× One does not offer anything to the

other side in exchange.�26


Definition of distributive negotiationIt is assumed there is a fixed amount of value to be divided. This assumption makes it difficult to see if there is anything else that can be included in the negotiated agreement.

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Definition of distributive negotiation

The definition of success is seen as the other side gets nothing or as little as possible of the fixed value.

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Definition of distributive negotiation

Many negotiations are resolved through distributive negotiation. There are situations where there is nothing else to include as a trade off

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Goal: take as much as possible and give as little as possible.


Integrative Negotiations – Everybody Wins Something (Usually)


Both parties work together to increase the value available for settlement with the ultimate goal being to close the transaction


Integrative negotiationsAssumes here is more than a fixed amount of value which leads to people trying to figure out how it can be created.The negotiator thinks “The other side will give something of value if we give something of value in exchange. “

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Goal: Get as much value as possible and give as much. Establish and preserve the relationship


Integrative Negotiation Basics# Multiple Issues – each side wants to get something of value

while trading something which has a lesser value.# Sharing – To fully understand each other’s situation, both

parties must realistically share as much information as they can to understand the other’s interests. You can’t solve a problem without knowing the parameters. Cooperation is essential.

# Problem Solving – Find solutions to each other’s problems. If you can offer something of lesser value which gives your counterpart something which they need, and this results in you realizing your objective, then you have integrated your problems into a positive solution.

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Preparations for negotiations

Preparation

× Educate yourself on all potential issues including marketplace, clients needs, desires costs, interest rates, etc.

× Thoroughly understand your clients needs× Prioritize your clients needs× Decide on approach - distributive or integrative

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Do your homework× Pricing× Assessment× Taxes × Market stats

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Motivations:What is of value to your client?

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Plan your strategy1. List the issues to be negotiated2. Prioritize the issues3. Determine a tentative opening offer/

demand for each issue4. Determine a tentative bottom line for

each issue

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Plan your strategy5. List the issues you think the other side will want to negotiate.6. List the priority the other side will probably give to each issue7. Determine the opening offer/demand

you think the other side will give for each�41

Plan your strategy7. Determine the opening offer/demand

you think the other side will give for each 8. Determine the probable bottom line for

the other side on each issue9. Who will present the offer

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12 ways to become a better negotiator*1. Learn everything you can about the

situation, the issues and the participants2. Understand all the participants needs and interests3. Set reasonable goals for what you hope

to achieve and rank them by priority

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12 ways to become a better negotiator*4. Work within a range that includes minimums,

targets and maximums5. Anticipate the other parties’ comments and

prepare your responses6. Remain calm, pleasant and unflappable

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12 ways to become a better negotiator*7. Build trust by clearly stating what your client

wants and respecting what the other parties want8. Create an atmosphere of joint problem solving

that focuses on the benefits of all parties9. Remain flexible and open to a range of options

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12 ways to become a better negotiator*10. When other people speak, listen attentively and

hear them out fully11. Use empathetic comments and sympathetic

gestures and facial expressing sto smooth over difficult situations

12. Always under-promise and over-deliver*Source: realtor.org/realtormag

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Participating in distributive negotiationDetermine any non-negotiable issues× Do not state a bargaining position on a non-

negotiable issue× Simply declare a non-negotiable issue as a

condition of any agreement

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Participating in distributive negotiation

Insist the other side makes the first offer× Respond with a high demand or low offer× Make concessions only if other side does× Make only small concessions

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Participating in distributive negotiation

× Discuss only your own position - don’t take interest in discussing what is of concern to the other side.

× Raise your demands during talks.

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Participating in distributive negotiationDiscuss positions and nothing else× Do not disclose needs or interests× Do not ask the other side’s needs or interests

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Participating in distributive negotiationDo not give reasons for positions× If you give a reason the other side may want to

discuss the proposals and the reasons× Giving a reason signals you are trying to have

a joint discussion.

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Participating in distributive negotiationDo not have a deadline× Be able to outlast and wear down the

other side until they meet your demand× Get sidetracked. Talk off the subject. Do

not focus on solutions

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Participating in INTEGRATIVE negotiationJointly conduct the process× Discuss candidly the needs and interests

of each party. Invite disclosure by the other side

× Search to understand. Listen carefully× Watch reactions

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Explore options with the other side to

meet the needs of both

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Participating in INTEGRATIVE negotiation

Treat the other side with respect× Give rationale for each demand/offer× Take the other side seriously× Don’t corner the other side

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Be clear about your wants and be ready to discuss other ways to accomplish goals

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Participating in INTEGRATIVE negotiationAchieve a mutually acceptable solution× Reach temporary agreements on each

issue× Achieve a global agreement incorporating

as many temporary agreements as possible

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Participating in INTEGRATIVE negotiation

Work together on deadlines× Don’t rush negotiations× Take time to listen× Take time before giving responsesDo not use a lack of deadline coercively

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Don’t let disagreements over minor points take the focus away from a well priced offer.

Guard against negotiating

fever

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Help clients put offers into perspective

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Help clients weigh the offer based upon

their own urgency

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A counteroffer is an entirely new offer. One that the other side doesn’t have to accept. The other side could now change their mind on Things that might have been agreeable in previous offers

Top 6 Seller concessions1. Sellers let buyers move in quickly2. Sellers help with financing3. Sellers let buyers rent4. Sellers permit certain contingencies5. Sellers pay buyer closing costs 6. Sellers pay for improvements

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What are the risks for

distributive negotiating?

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What are the risks with integrative

negotiating?

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How can one side move a party from

distributive to integrative

negotiations?

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Negotiating for

your Client

�68Copyright © 2018 Katheryn DeClerck. Real Estate Instructor - All Rights Reserved.

× Price× Included items× Financing× Time frames× Contingencies× Occupancy

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Negotiating points

Find out what is of value to the Client.


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Keeping good records during communications

Highest and bestSelectively countering Offers that come in laterRemoval of contingencies

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Strategies for dealing with multiple offers

Techniques

How many times do you go back and forth? Who draws the line?Which is the stronger position?How long do you wait to counter?

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Staying focused on your clients needs - avoiding agency violations

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Barriers to successful negotiations and how to avoid them

Emotion vs Logic

Personalities

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Backgrounds

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Knowledge of the market

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Other impasses

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Group discussion

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Example 1

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An agent from ABC Realty lists a home for $350,000. An agent from XYZ Realty bring an offer of $320,000. XYZ agent attaches a copy of the tax record showing the seller only paid $280,000 two years earlier for the home and that is the justification of the offer. When the listing agent presents the offer, the seller says it’s true but they added a new kitchen valued at $30,000. × What action should listing agent take?

Example 2

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Mrs. Smith lists her home with Mary from ABC Realty and was impressed with her attention to detail. An offer comes in from Sue from XYZ Realty. The offer is $400,000 on an asking price of $430,000. There is a 2 page list of required items that represent a cost factor to Mrs. Smith. × How do you thinks Mrs. Smith might respond?× How should Mary handle this situation?

Example 3

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Mary meets with the Smiths who want to sell their home. Mary asks some questions and they say they will not accept less than $500,000. Mary says how nice the house is and they agree to list the home for $535,000 to cover closing costs/ brokerage fees. Based upon purchase date and appreciation, it should be worth $475,000. × What should Mary have done to better serve them?

Example 4

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Mary lists the Jones’ home for $400,000. According to her CMA it is a fair price. An offer comes 2 days on the market from and agent at XYZ for $390,000. The buyer has been preapproved and there are not contingencies except a customary home inspection. The buyer is prepared to close in 30 days. × How do you think the Jones’ will respond?× How do you think Mary should respond?

Example 5

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Mary is the buyer’s agent for Cynthia and they found a property. Cynthia asks Mary what to offer and how to proceed. Mary does a market analysis and reviews the tax records. Cynthia has quite a few questions about what conveys with the property as well as repair items that Mary thinks should be addressed in the contract. × How do you think Mary will construct the offer? × How would you present the offer?

Example 6

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An agent from ABC meets with agent from XYZ to present an offer. The agent from XYZ reads it carefully and the ABC agent gets uncomfortable with the silence. The buyer told ABC agent they were prepared to go up $10,000 if necessary. × What should ABC agent do?× What should XYZ agent do?

Example 7

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Agent George thoroughly interviews buyer clients regarding their wants and needs. After seeing 8 homes they want to keep looking….. × How do you think George might react?× What cautions should George take in his response?× How should he gain control in this situation?

Role Play time

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Common Scenarios:identify interests and suggest responses

We don’t want to give you a

long term listing

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We want to interview several

companies

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The other agent said they could sell it for

more

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We have a friend in the

business

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We don’t want FHA or VA financing

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The other company will take it for a lower fee

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The other agent has more

experience

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Lets try this price, we can always reduce

it later

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We want to think it over

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We have to sell but we want to find a house

before we put it on the market

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We want to sell it ourselves in order to save on the fees

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You are a buyers agent and they are interested

in new construction from a builder with

good sales and does not discount

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Negotiating for your buyer

client without a time deadline

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Your buyer client makes an offer

and seller’s agent tells you there are

multiple offers

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You are negotiating the

listing contract and the seller wants you to cut your brokerage fee

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What do you say to the other agent

when you think they do not have

authority to reach an agreement?

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You are negotiating the

listing contract and the seller wants you to cut your brokerage fee

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How to improve your skills at negotiating

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Any questions?


THANKS!You can find me on Facebook at @InstructorKatheryn,

845.629.3504 or [email protected] all my upcoming classes at Kdseminars.com

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hello!€¦ · 13. staying focused on your clients needs - avoiding agency violations 14. barriers...

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