Senators reach bipartisan deal on auto industry bailoutA group of U.S. senators have reached a bipartisan agreement on a bill to support the auto industry. Details of the possible bailout for automakers is expected to be announced today, according to a representative of U.S. Sen. George Voinovich, R-Ohio. (GM) (F) Dow Jones falls 444 pointsThe Dow Jones Industrial average remained below 8,000 Thursday and dropped another 444.99 points before closing at 7,552.29. (FLR) (CTX) (DF) (LUV) (THC) (GME) (ETP) (ETE) (CE) (IAR) (CMA) (SBH) (ESV) (PIR) Prime Outlets lands 20 tenantsPrime Retail, the parent company of the Prime Outlets portfolio of outlet shopping centers, announced Thursday that 20 outlet merchants have signed leases at the developer's latest creation: Prime Outlets - Grand Prairie outlet center. Omni preferred choice for Dallas convention center hotelThe Dallas City Council voted Thursday 5-to-1 in favor of naming Omni Hotels the preferred operator of Dallas’ future publicly financed convention center hotel, a spokeswoman with the city confirmed Thursday. Main Event to open new store, add 146 jobsFamily entertainment provider Main Event Entertainment is running against the grain of the nation’s economic woes by opening a new family entertainment center in Frisco. Former TX AG Jim Mattox diesTexas Gov. Rick Perry has ordered all flags to be flown at half-staff in honor of former Texas Attorney General Jim Mattox, who has passed away. Southwest Airlines appoints two to boardThe Southwest Airlines board of directors has appointed two new directors: Daniel D. Villanueva and John Denison. Sally Beauty Holdings maintains Q3 profitDespite a sluggish economy, Sally Beauty Holdings Inc. posted a higher profit during the fourth quarter of 2008. (SBH) Dave & Buster's adds 250 jobs at new storeRestaurant and entertainment complex operator Dave & Buster’s is celebrating its 25th anniversary by bringing 250 new jobs to Arlington with the opening of a new location. XTO approves billions for developmentThe board of natural gas producer XTO Energy Inc. has approved $3.3 billion to cover development and exploration initiatives, the company says. (XTO)
negotiation off course.
2) Do not respond emotionally. An angry or defensive response will escalate the negotiation into a no-win battle.
3) Do not accept or reject their arguments. Listen and show that you understand their points.
4) Accept the fact that strong emotions are present. Strong emotions arouse fear and anger in others. They may be a negotiation tactic.
5) Avoid an "us-against-them" strategy. Attach cover memos to your responses in order to communicate with the seller and break down barriers.
6) Show that your proposals were not been made unreasonably. Firmly anchor pricing, repair requests and other points to outside data.
7) Be careful not to allow hazy proposals to stand. Put everything in writing. An emotional negotiator will often produce an unclear agreement.
8) Make your offer as attractive to the seller as possible. Look for ways to meet their underlying interests.
9) Offer some wins on some of the terms. Face saving is important. Do not try to win every point.
10) Keep your long term goals in mind. The seller may have a beautiful home that meets your needs.
Is every point in the contact negotiable?
Yes. However, one of the most effective ways to come to an agreement is to rely on accepted norms when possible. For example, it is common practice in our area for the seller to pay for the title policy, and buyer to purchase the survey. Using consistent standards reduces the need to haggle over every point. However, every term in a contract can be used to help structure the deal. By trading off, both parties can come closer to getting what they need. How do you move in the direction of “trust”?
Keep in mind that contract negotiation is a sensitive area, and anxiety can be high. All parties are under pressure, with future plans at stake. It is possible that the buyer or seller may have had a previous bad experience. Acting with integrity does not mean that all cards have to be put on the table. It is not proper to discuss your personal strategy or needs. A high level of trust raises the level of cooperation between the parties and forwards the negotiation. The seller will be much more cooperative if the he feels that the buyer and agent are acting with integrity. Here are ways to develop trust:
1) Listen and understand what the seller has to say.
2) Express appreciation for the seller's home, gardens, decorating.
3) Respond within a reasonable time to counter offers.
4) Reassure the seller of your ability to close.
5) Reveal some personal information about yourselves.
Finding common ground with the seller can be a very powerful tool in the event of multiple offers. Sellers often choose their contract for personal reasons. For example, the buyers reminded them of their own family when they moved in with young children. Or, they were of the same religion. Or, the new owners would care for their gardens or feed the birds.
How much leverage do you have?
A crucial part of your strategy in a negotiation is an accurate perception of the real estate market. You must know the underlying market condition. If you are in a sellers' market you must act quickly, and be willing to present an offer at the top of the range. This is most important if the home is in a hot area and has strong appeal. If the seller has multiple offers, you must make your very best offer up front.
In a buyers' market your prospective home may have been on the market for months. There may be a small buyer pool for the home because of economic conditions or due to repair or updating needs. In this case you have a lot more leverage than you would with a new listing. Some knowledge of the sellers' needs may help you improve your leverage. If you can meet some of their needs you have gained leverage for a lower price.
It is important to make your offer as straightforward as possible. Contingencies will reduce your leverage for a lower price in a buyer's market, or for any consideration in a seller's market. Be proactive about showing the seller your desire and ability to close. Here are some possible contract contingencies: 1) Contingent on sale of your home: Usually, the seller will not accept a contingency to find a buyer for your home. It is more likely to be accepted if your home is under contract. Attach a copy of the contract and status report. 2) Contingent on inspections: In our area this is covered by an option period. Keep the option time within accepted norms. This contingency can be removed to strengthen your offer, if you are already knowledgeable about the property condition.
3) Contingent on financing: Strengthen your offer by obtaining credit approval. An approval letter with your offer improves your leverage, and is crucial in multiple offers. If you are making a cash offer, get a letter from your banker stating that the resources are available.
How much under list price should you offer?
Unless there is a strong seller's market, buyers usually offer less than list price. Establish your price by a market analysis. It is usually counter-productive to offer so low that the seller will automatically reject the offer. This will set a negative tone from the beginning. In a recent deal the seller responded to a low offer with an above-list-price counter.
How are multiple offers handled?
The listing agent and seller will decide how they will handle multiple offers. They may disclose to all parties, or disclose to none, that multiple offers have been received. By informing the parties that there are multiple offers, the seller is not "shopping your contract." Shopping occurs when the seller discloses the terms of an offer to induce a buyer to submit a better offer. This can have a negative result by creating distrust of the process by all parties, and possible loss of the buyers. The standard procedure is to notify each potential buyer that there are multiple offers, and give each a chance to raise his offer by a certain time. When all are received, the seller will review the offers and choose one to work with. -----------
Roselind Hejl, CRS, is a Realtor with Coldwell Banker United in Austin, Texas. Her website: Roselind Hejl's Austin Texas Real Estate Guide - http://www.weloveaustin.com - offers a wealth of knowledge about the City of Austin, homes for sale, market trends and the buying and selling process.
