Contract and Procurement Management – PROJ 598 online
DeVry University, Keller Graduate School of Management
November 30, 2013
Negotiation is the process of making amicable decisions between individuals or groups. In this assignment, I will discuss a negotiation that did not result in the best possible solution for all parties. This negotiation was related to my work experience where I was a realtor who was representing a buyer in negotiation of the property’s price, mortgage loan rate and terms. I am a real estate licensee and also a member of National Association of Realtors. I have been practicing my license for seven years now. Seven years of experiences in real estate industry and two years of experience as an escrow assistant have prepared me to establish concrete foundation in today’s real estate market.
Two years ago, a buyer who was a mutual friend of mine hired me as a realtor to represent for purchasing a property. Since I was representing the buyer, my best interest is to get the best deal for the property. In real estate business, negotiation is critical to gaining a contract. Regardless of representing the buyer or seller, my main goal is to win the game and sustain a quality agreement between the buyer and seller. Whether I represent the buyer or seller, I always do research valuable information prior to presenting them. For instance, most clients are interested to know a little information other party motivation, tax records, history of property, how many days on the market, how many offers are already placed on the table, why the seller is moving out, what type of buyer (cash or finance), and what type of sale (standard, bank-owned, short sale, probate, trust or auction). When I have all or some of this information in hand, it helps meeting my clients’ expectation at first glance. Also, these types of information provide most buyers to get a brief understanding of the current condition of the property.
Likewise, I helped my client by conducting all necessary procedures that most typical agents carry out their fiduciary duties as a realtor. After we went through for a house hunting for a couple of months, then, the buyer found a property, which was listed for $429,000. It was a foreclosure property. The buyer acknowledged that the property needed some minor repairs. After I ran this property for Comparative Market Analysis (CMA), then, I submitted an offer in the amount of $410,000 based on fair market value. The seller had counter offered $10,000 more than what I initially offered. The counter offer consisted other terms and conditions. This was the situation where my negotiation had begun. I was advised that my client was willing to increase another $5000. Therefore, I informed the other agent who represented the seller/bank in regard to the buyer couldn’t be able to accept the counter offer but the buyer was willing to willing to increase $5000. I asked the seller’s agent if this were acceptable number, I would draft a counter offer to the seller based on our oral agreement. The seller’s agent asked me to give him 24 hours to get an answer back from the seller.
By next morning, the seller’s agent telephoned me that the seller was willing to accept my counter offer of $425,000 under the additional terms and conditions. The additional terms and conditions comprised that the property would be sold “As Is”. This means the seller won’t imply for any warranty and fix any repairs. The escrow period should be 30 days or less. The buyer should conduct the property inspection within 7 days after the acceptance. The buyer must remove the appraisal contingency within 10 days after the acceptance. I made sure that the buyer understood the seller’s request for the additional terms and conditions on the counter offer.
Based upon both parties’ agreement, I drew another counter offer and sent back to the seller with the increased...
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