Download pdf - Negotiation case - Selling House

7/28/2019 Negotiation case - Selling House

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IDENTFYING&IMPROVINGOURBATNA

SYNDICATE2

29111311HaidirAfesina(fezi)

29111328HendraWinata

29111329MitaListyatri

29111338AndekPrabowo29111344AprianEkaRahadi

29111384ChairunnisaMirhelina

29111387FranciscusXaveriusKresnaPaska

29111393AgungIndriPramantyo

MM5010StrategicDecisionMakingandNego\a\on


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SELLER

29111328HendraWinata 29111329MitaListyatri

29111393AgungIndriPramantyo

BUYER

29111311HaidirAfesina(fezi) 29111338AndekPrabowp

29111384ChairunnisaMirhelina

29111387FranciscusXaveriusKresnaPaska

Near Hastings & Centennial parks


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Casesynopsis

SELLER

Lis\ng#9013878:$240,000

Directselling(NOAGENT)

Onemonthonthemarket

OneofthenicesthouseintheCentennalParkarea

Originallypurchased$155,000

Descrip\on

Builtin1947 1846squarefeetofspace

InsideAmeni\es

Largeeatinkitchenwithallappliances Newlydecorated

OutsideAmeni\es

Detachedgarage(2.5cars) Restaurants&transporta\onwithinwalking

distance

NearHas\ngs&Centennialparks

BUYER

Submiedoffer:$220,000

Rentforfewyearsandthenresellataprofit

LookingforsinglefamilyhomeinCenterville

Priceofneighboringhomeswithsimilar

characteris\c:

Lis\ng# SellingPrice SquareFeet

8906898 $213,300 1715

8904725 $233,600 1875

8908614 $239,600 1920


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BARGAININGZONE

BuyersReserva\onPrice

$235,000

BuyersAspira\onPrice

$220,000

BUYER

Sellers Reservation Price$225,000

SELLER

Sellers Aspiration Price$240,000

Z O P A

$225,000$$235,000

BATNABUYER=Willingnesstobuyi.e.theonlybuyerwhocomeina

month

BATNASELLER=Futureprospectoftheareai.e.strategicloca\on


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Lis\ng# SellingPrice SquareFeet Price/Squarefeet

8906898 $213,300 1715 124.4

8904725 $233,600 1875 124.6

8908614 $239,600 1920 124.8

AVERAGE $228,900 1837 124.6

Remark SellingPrice/squarefeet Sellingprice@1846square

feet

Average 124.6 $230,000

Seller#9013878 130.01 $240,000

#1.Priceofneighboringhomeswithsimilarcharacteris\c:

BUYERPERSPECTIVE


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#1.5ALTERNATIVESIFNOAGREEMENT

BUYER

1.Renttoown/Leaseop\on

2.rentotherhousessurroundit

3.Askinghelpfromanexper\seorcommunitytoiden\fytheseller`sauthority/decisionmaker

4.Sharedownershipwithfamilyorfriendi.e.5050

5.Alliancewithpowerful&influencedpeopleororganiza\on


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http://public.rpl.herorentals.com/RPL/search/USA.index.mvc?page=results

Bedrooms: 1 Bathrooms:1 Monthly Rent: $ 500Date Available: June 8th, 2009

Lease Info: 6 months/12 monthsApplication Fee (Standard): $ 38Pets: No PetsParking: 1 car carportFireplace: No fireplace

Approx Square Feet: 600 Dwelling Type: Single family

Near Hastings & Centennial parksStrategic locationBigger house

MarketResearch

Based in Hostede, the Americanpeople are individualism, means theneed of individual treatment forpersonal approach in order to

convince to sell to us


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#3.2BUYERIMPROVINGBATNA

Arrangementwithsupplier,partnersorcustomer

1.Cer\fiedhomeinspector2.Buildrela\onship(personalemo\onal)withsellerandcommunitysurroundthe

areai.e.toiden\fytheseller`sauthority/decisionmaker

3.Offerreleaseclausetotheseller

RemoveanyconstrainsthatweakenBATNAOfferreleaseclausetothesellerBycheckingpoten:allyrelevantbusinessfutureandnego:atedwiththesellerthe

percentageofsharedprofit

Changetermsofnego\a\onGethomeinspectedandappraised

Regardlessofitsnewameni:esandfurnished,thebuildingisold.Theinspector

wouldcheckifthereisanytermites,anytermitedamage,houseelectricalsystem,

plumbingandalsohealingandcoolingsystem.Thusthepricewilldependonthe

report.


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#4.NEWBATNAIFSUCCEEDED

BUYEROfferedreleaseclauseagreementRegardlessofagreeingthepricethatsuitstobuyer,itisbelieved

thatthesellerwouldbeinterestedashewouldgettheshared/

commissionforthenextsalesasbuyerwillsellagainthehouse.However,onlyifthereleaseclausemet.


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#4.BUYERNEWBATNAIFSUCCEEDED

Reserva\onPrice

Aspira\onPrice

NewBATNAValue

BUYER $235,000 $220,000 Avg.HomePrice**

($DecreaseFactorfrom

Nego:a:on)+($commissionforNext

SalestoExis:ngSeller)

($NetProfitfromNext

Sales)

** Buyer: 230,000


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#2.Mathema\cal

(18751846)/(18461715)=(124.6X)/(X124.4)

29/131=(124.6X)/(X124.4)

29X3607.6=16322.6131X

160X=19930.2

X =124.56(Averagesellingpersquarefeet)

SELLINGPRICE=1846x124.56=$229,937

SELLERPERSPECTIVE

Lis\ng# SellingPrice SquareFeet Price/Squarefeet

8906898 $213,300 1715 124.4

#9013878

SellerHouse

? 1846 ?

8904725 $233,600 1875 124.6

8908614 $239,600 1920 124.8


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#1.Mathema\calforHomePriceApprecia\onRate

Assump\on: CentervillelocatednearDC(virginia)

Source:hp://www.forecastchart.com/homepricesdc.html

BaseYear=240,000/(100%+AverageHomePriceApprecia\onRate%)

AssumeSeller&Buyeragreewithprice$240,000,wherethebasepriceis$239,497usinglastyear

data,Sellergetaround$503

ButifSelleragreewithprice$229,937wherethebasepriceis$239,497usinglastyeardata,Seller

lostprofitopportunityaround$9,560

Last10year Last5year LastYear LastQuarter

AverageHomePriceApprecia\onRatein

DCfrom2012

24% 12% 0.21% 1.04%

BasePriceusing1YearForwardUsing

Price(Apprecia\on)

240,000 193,548* 272,727 239,497 237,530

SELLERPERSPECTIVE


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#1.5ALTERNATIVESIFNOAGREEMENT

SELLER

1.Rentedthehousetobuyer

2.Marke\ngstrategyi.e.STP

S:middleclass

T:singlefamilyP:investmentforan\queloversclub

3.Marke\ngtac\ci.e.Adver\sing

ATL:Property&businessmagazine

BTL:Socialmedia&community(WOM)

4.Buyerassistedfinancingfromselleri.e.50%cashdeposits,5%interest,10years(nego\able)

5.Runningbusinessopportunityi.e.guesthouse


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#2.BESTALTERNATIVESIFNOAGREEMENT

SELLERRunbusinessopportunity1. Posi:ve(guesthousenearbyhas:ngandcentennialparks)2. Nega:ve(conspiringwithhisneighborsaroundtoofferhigher

abovenormalrates(1.5:mes)toboostthemarketprice


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#3.SELLERIMPROVINGBATNA

Arrangementwithsupplier,partnersorcustomer

1.Homeinsurance2.Buildrela\onshipwithcommunitysurroundthearea

3.Posi\onedasan\quehistoricalvaluei.e.investment

4.Adver\sement(ATL&BTL)

RemoteanyconstrainsthatweakenBATNA1.Homeinsurance2.Assessbusinessopportunitywithbusinessen\tyarounde.g.ShoppingCenter,

Restaurant

Changetermsofnego\a\on1.Priceexpira\on

2.Askcommissionpercentageifbuyerwanttoresalethehouse


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SELLER

RunbusinessopportunityBased on Seller calcula.on on slide 6, Seller will lost profit opportunity

$9,560 if Agree the sales cost of $229,937 to Buyer or below $239,947

Thereforeweprefertokeepthehouseandrunbusiness

e.g.runningaguesthousetoimproveSellerBATNAwhilewaitforapprecia:onRatefromthehousepricewhichhasincreasedtrendin

DCarea


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Reserva\onPrice

Aspira\onPrice

NewBATNAValue

SELLER $225,000 $240,000 Avg.HomePrice*+

($Rent/year)+($Home

Apprecia:on/year)

Seller: 229,937