Condo Negotiation: Buyers' Perspective

Questions and Answers

What is Sofia's resistance point when negotiating for the condo?

$150,000

$145,000 (correct)

$130,000

$140,000

Jackson's resistance point is $140,000.

False

What is the bargaining interval (spread) in this negotiation?

$10,000

Sofia's asking price is __________.

$145,000 Signup and view all the answers

Match the following terms with their definitions:

Resistance Point = The highest or lowest price a negotiator is willing to accept. Bargaining Interval = The spread between the buyer's and seller's resistance points. Negative Bargaining Range = A situation where the negotiators' resistance points do not overlap. Positive Bargaining Range = A situation where there is potential for agreement. Signup and view all the answers

Why is the spread between resistance points important?

A smaller spread increases the likelihood of reaching a deal. Signup and view all the answers

Both parties should accept offers below their resistance points to maintain negotiation morale.

False Signup and view all the answers

What does negotiation resistance refer to?

The challenges faced when negotiators are unwilling to accept offers below their resistance points. Signup and view all the answers

Study Notes

Buyers' and Sellers' Negotiation Dynamics

Resistance Points: Defined as non-negotiable limits; they indicate the highest price a seller will accept and the lowest price a buyer is willing to pay.
Sofia's resistance point is $130,000, the maximum she can spend on Jackson's condo.
Jackson's resistance point is $150,000, the minimum price he will sell the condo for.
The bargaining interval is established between these resistance points, in this case, $10,000.

Key Pricing Strategies

Sofia’s asking price is $145,000, positioned strategically above her resistance point but below Jackson's.
Jackson's target price, inferred, is $140,000, indicating the ideal price he hopes to negotiate towards.

Importance of Spread

A smaller spread in resistance points generally increases the likelihood of reaching an agreement.
The bargaining interval impacts negotiation dynamics; a narrow gap lessens the potential for contentious negotiations.
If Jackson seeks $140,000 for the condo, he might benefit from pricing it slightly higher, encouraging Sofia to accept a closer offer.

Negative Bargaining Consequences

Accepting offers significantly below the opposing negotiator's resistance point can lead to negative bargaining, where both parties feel undersold.
This strategy can diminish morale and satisfaction in the negotiation process.
It is essential for negotiators to respect the resistance points to foster positive outcomes and maintain goodwill.

Description

Explore the dynamics of condo negotiations through the lens of Sofia and Jackson's bargaining ranges. This quiz will test your understanding of resistance points and target points in negotiation scenarios. Hone your negotiation skills by analyzing the buyers' strategy in real estate.