Negotiations Part 4

Securing the Buyer's Offer
The right house—at the right price—should prompt an offer to purchase. Follow
these tips to help ensure that your prospects become buyers:
Educate buyers. Reduce the fear of the unknown by preparing a chronology of events that occur
during a home purchase.
Prequalify buyers to know for certain they can afford to purchase. Being unrealistic ensures that
they can’t make an offer. (See the tool kit on Questions for Prequalifying Buyers.)
Create a strong sense of anticipation for the one or two homes you think best fit the buyers’
needs.
Don’t let your personal preferences prejudice you against a home that might be just right for
your prospects. Remember: There’s a buyer for every house and a house for every buyer.
Listen to their objections. Let buyers voice their concerns. Don't jump to respond.
Remind buyers of outside motivators that should spur their actions—job transfer, inadequate
size of current housing, change in family size (baby or parent coming to livePaint imaginary
pictures that help prospects visualize themselves in the home).

Securing the Buyer's Offer
Reinforce the buyers’ feelings. Get excited if they’re excited.
Be sure you have all the decision makers present. If a parent or spouse needs to
approve the purchase, bring them along to the 2nd showing.
Give buyers some quiet time during the drive between showings to assimilate
what they’ve seen. Don’t overwhelm them with information or idle chatter.
Ask for the offer. Sometimes that little extra push is all prospects need.

Getting Prepared to Present the Offer
Once you have a written offer in hand, your next negotiating challenge is to get the sellers to
accept it. As with many things in life, success rests largely upon sound preparation.
Update your comparable market analysis. Extract new data on list prices, sale
prices, and terms for comparable properties in the area, especially if the
property has been on the market for more than 30 days.
Examine buyer qualifications. Buyer eligibility is just as important as the price
and terms of an offer. Sellers won't take their home off the market without some
assurance that the buyer can perform. Have details about down payments and
loan prequalification.

Getting Prepared to Present the Offer
Choose a venue. Select a time when all parties who need to approve the offer
can be present and a place with minimal distractions. Your office gives you
access to files and copying facilities; other experts suggest the sellers’ home, but
only after the children are in bed.
Anticipate objections. View the pros and cons of the offer from the sellers’ point
of view. Gather the information you'll need to respond to objections—market
analysis, etc. If you have the seller, make sure you have a net sheet
Estimate sellers’ costs. Calculate probable closing costs—mortgage payoff,
transfer taxes, tax and utility prepayments, and your commission—so that sellers
can see what they will ultimately realize from the sale.

Sure-Fire Strategies for Presenting an Offer
Cover all key points. Be sure to cover all the key points of the offer, not just the price.
Look for motivation. Look for something in the offer that will tie in with the sellers’
motivation. If they are buying another house and need to sell before they close, for
example, reinforce that point before you present the offer.
Show buyer's soft side. Make the buyers human to the sellers before presenting the
offer. Ask the Buyer’s Realtor to tell you a little about the buyer so you can share that
with the seller and what they liked about the house, then spend a minute telling the
sellers some personal details about the buyers and how much they loved the house.
Join forces with the sellers. Reassure sellers that you're working for them, say “our
buyers.”

Sure-Fire Strategies for Presenting an Offer
Don't disparage the sellers’ property. Don't say: "This is a good offer because your house is in a high-crime
area and needs a lot of repair." Say instead: This is a good buyer for your property because he sees its
potential. You won't need to paint or make major repairs."
Avoid telephone presentations. A seller can say “no” over the phone, but “yes” requires a signature.
Simply say, "I want to discuss the terms of the offer in person. Is 7 o'clock tonight OK?" If you must present
an offer to out-of-town sellers via telephone, set up a conference call when everyone can be present.
Summarize. Keep the contract out of sight until you're ready for the seller to read it. While you're
discussing the offer, put a blank sheet of paper on the desk and write down the offering price, the
downpayment, and the proposed settlement date.
Stop talking. Let the seller tell you what they think.
Be thorough. Go over each paragraph of the offer, explaining what it means and how it affects your client.
Get agreement on smaller points, like leaving behind draperies or appliances. This creates a climate of
acceptance for the larger issues.

4 Elements of a Standout Offer
Flexible timing. A buyer who will consider options about closing and move-in
dates is in a good bargaining position.
Well-qualified buyer. A preapproved buyer provides much greater security that
the deal will close easily and rapidly.
No contingencies. A buyer who doesn't have to sell another home or who is
willing to waive all contingencies helps give the deal a green light.

Taking the Sting Out of a Contingency Clause
Be sure that a contingency clause:
States the exact purpose of the contingency so its scope cannot be expanded later in the
transaction.
States exactly what will happen, including any forfeitures or damages owed, if a condition does
not occur.
Avoids subjective language — a suitable home, in a reasonable amount of time — which can
lead to disputes later. Also, each contingency should be broken down with two words: ‘If’ and
‘then’.
Sets realistic time limits — neither unreasonably short or too lenient — to complete contingency
conditions.
Indicates if the seller can cure any problems found during an inspection.
Is removed from the contract once the condition has been met; or is initialed by both parties as
it is satisfied.

Taking the Sting Out of a Contingency Clause
Watch Your Wording
Improper wording can be confusing and misleading. Be sure to always state your
intention clearly and with as much detail as possible.
Bad: "This contract is contingent upon buyer obtaining financing." Does it mean
the buyer has an obligation to go obtain financing and to cooperate? Within
what period of time? It just doesn’t cover what happens if the buyer doesn’t get
a loan? What happens then?
Good: "This contract is contingent upon buyer obtaining a new conventional
loan at an interest rate not to exceed 7 percent. If, after making good faith
efforts to obtain that loan, the buyer is unable to qualify, then the buyer may
cancel, in which case the earnest money will be refunded."

Counteroffer Dos and Don'ts for the Seller
When you're putting together a counteroffer, use these tips to help keep sellers focused:
Don't be too quick to give a counteroffer before sufficiently going
over the initial offer first.
"In writing your counteroffer, you may want to emphasize the areas
that you do agree on before you begin asking for modifications." —
Jim Remley, "Sell Your Home in Any Market"
Don’t let disagreement over a minor point take the focus away from
a well-priced offer. Remind sellers that the value of the concession is
probably far less than the profit they are making on their home.

Counteroffer Dos and Don'ts for the Seller
Guard against “negotiating fever,” where sellers feel that going back with a
counteroffer is part of the game. If you think the price is reasonable, encourage
sellers not to keep pushing.
Help sellers put a lower price offer into perspective. On a $200,000 home, an
offer of $198,000 is only a 1 percent reduction. That’s like offering $.99 instead
of $1. Encourage sellers to weight the offer based on their own urgency to sell
and the time the house has been on the market.

Tips for Presenting a Counteroffer
Appeal to fairness. "We’re willing to lower our price by $5,000, but it’s only fair that you not
require us to repaint the house."
Focus on the points of acceptance. "The buyers felt that everything in your offer was acceptable,
but one minor point..."
Remind buyers what they like about the house. "When we were deciding on the original offer,
you said that this house had the perfect backyard for your children."
Present the offer in person. Just as you would with an initial offer, don’t discuss a counteroffer
over the telephone.
Get the buyers prepared. When you write up the original offer with buyers, remind them that
their first offer may not be accepted. That will help their time frame for making a counteroffer
that sellers will like.
“Split The Difference” Theology- The American way!

3 Reasons Buyers May Want a Counteroffer
To spark negotiations. A buyer might make an opening offer just to get the
negotiations going.
To reach compromise. If the seller has an unrealistically high asking price, the
buyer might make a low offer to try and strike a compromise.
To find affordability. A buyer who can't afford what the seller is asking might
offer something close to his or her maximum, hoping the seller will make a
viable counteroffer.

11 Body Language Essentials for Your
Next Negotiation
If you aren't in control of your body language, it doesn't matter how much you've prepared for a
negotiation. Here are some top tips.
1. Mirror Their Actions
Mirroring is when one person adopts another person's
body language, vocal tone, and behavior, which builds
rapport. For example, if the prospect is engaged, he or
she will lean forward and follow your movements. If
that's not the case and the person is leaning far back
and crossing his or her arms, be sure to find a way to
bring the person back in and ask what isn't right.
Taken from: www.inc.com/11-body-language-essentials-for-your-next-negotiation.html

2. Nod Your Head
Lightly nod your head and maintain
eye contact. Doing this in
negotiations defuses tension and
builds alignment, even during
contentious conversations.

3. Pay Attention to Your Hands
When people are nervous or stressed, it often shows in their hands. When you're
negotiating, make sure your hands project confidence and poise. Fidgeting or clasping
your hands tightly together reveals that you're nervous. The other party can take
advantage of that. Try putting your hands just below your chest and put your fingers
together when you want to confidently make a point.

4. Plant Your Feet
Your face, head, and hands are obvious body parts to control when negotiating. But your feet?
Not so much. Keep them firmly planted on the ground to show your resolve. It also ensures that
you avoid coming off as ambivalent or stubborn. This helps you stay confident, too.

5. Relax Your Body
Negotiations can be intense, so
assume a relaxed body position to
help ease the tension. Complement
that body language with soft-spoken
or non-aggressive commentary. This
can help build trust and lead to more
effective negotiations.

6. Remember to Smile
It's important that the
environment doesn't get too
intense. For the deal to be
successful, it will most likely be
a long-lasting relationship, and
that can't happen if it's not
friendly between both sides.

7. Keep an Open Posture
Be Open!
Keep yourself pleasant and appealing.
Lean in and act engaged, and keep your
stance open. People want to feel like the
deal is about (or at least includes) them,
even if it's not in their best interest. So
they may not get exactly what they want,
but they do want to know that you're
interested in their thoughts or feelings
about a topic in the negotiation.
Otherwise, they shut down.

8. Hide Your Nerves
Do not fidget during a negotiation. Any signs of
being nervous or anxious can be a red flag.
Don't bounce your legs, tap your feet, or touch
your face. You want to appear calm and
confident to the person with whom you are
negotiating.

9. Keep a Poker Face
A good poker face is essential. I once heard
someone say, "Don't negotiate like you're
Tony Soprano unless you have a gun in your
hand." That's true. People think they have to
talk like a mobster in a negotiation. The best
do their homework, come with really strong
data and facts, and don't show their hand.

10. Show Your Patience
When negotiating, pretend that you are sitting with your
grandmother. You need to focus because she might speak softly, and
you certainly need to be patient explaining things because topics
that are obvious to you (Facebook and mobile apps) may be foreign
to her. Make sure to smile a lot, too. And focus on your partner; be
empathetic to his needs.

11. Hold Eye Contact
Although there are other body language factors
that can detract from your negotiation skills,
faltering eye contact is the most detrimental.
The saying that eyes are the windows to the soul
also applies to effective communication. Not
maintaining eye contact gives off a perception of
uneasiness, as well as a lack of confidence and
conviction--characteristics that no strong
negotiator embodies.

Remember We Deal With Humans
Above all, remember we are dealing with people.
Our end goal should be building the relationship with the client, to become their
trusted advisor for today and in the future as well.

Pet Friendly Listing
Be glad you don’t have to sell this house!
http://www.stuff.co.nz/life-style/home-property/65667806/Californian-house-designed-for-15-
cats

Negotiations Part 4

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