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Wednesday, April 6, 2016

How Will BATNA Help You Negotiate?


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This week, I’m talking to you about negotiations. When you follow the King marketing plan, you gain an aggressive strategy. You might be asking yourself, “What is the best way to handle offers to earn the highest and best sales price?”

I’d like to break down an important component of negotiation called BATNA. The acronym stands for the Best Alternative To a Negotiated Agreement. Understanding your strengths and weaknesses prior to entering a negotiation can significantly better your strategy. The party with the best alternative will almost always have the strongest foothold in the negotiation.

If you’re the buyer, find another, similar house you like just as much as the other or maybe even more. This will be your backup if your first option doesn’t work out. It gives you freedom in a transaction to walk away, which increases your negotiating power.
 


If you’re a seller, find the better buyer who will pay what you want or more. If the seller only has one buyer, and they find another home they like better, the buyer will ask for a discount, request extensive repairs, and even beat down the appraisal. The seller’s best defense includes additional buyers, even if it’s just one, within a single transaction.

The seller then can explain to a more demanding buyer that they have other offers to explore. You have more negotiating power if you can walk away from an offer. When social influence plays a role with other buyers wanting to buy your home, this will keep your current buyer more committed to the transaction within closing time and budget. Always have several buyers and back-up offers to score the best deal. If a current deal in escrow falls apart, you have other options to explore already.

Understanding your BATNA before negotiating can help you build your strategy and give you an advantage in the San Diego marketplace. If you’re thinking about buying or selling a home locally, contact me by phone or email. I am happy to serve your local real estate needs!

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