Teach Real Estate Negotiation

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Negotiation examples

Teach Real Estate Negotiation

Real estate negotiation can be difficult for both the buyer and the seller. Teaching real estate negotiation can involve value creation, distributive bargaining, as well as issue linkages. The Teaching Negotiation Resource Center (TNRC) has developed a wide variety of negotiation simulations designed to teach real estate negotiation. Three of the TNRC’s best simulations for negotiating real estate are Bullard Houses, Bradford Development, and Hong Kong Property Deal.

You can also discover step-by-step techniques for avoiding common business negotiation pitfalls when you download a copy of the FREE special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School.

Bullard Houses

This two hour, two-party, multi-issue real estate negotiation is between representatives of Downtown Realty, Inc. and Absentia, Ltd. Downtown Realty, Inc. owns the historic Bullard Houses, a set of 51 attached brownstones in the city of Gotham. The Houses, occupied for decades by the city’s wealthy elite, have fallen into disrepair and are currently occupied only by a few low-income families. Downtown Realty is eager to sell this property, and Absentia is confident it has an appealing offer. Watch this free video of the simulation in action:

Major lessons include:

  • Appraising your BATNA.
  • Confidentiality: under what circumstances, if any, can the attorney reveal information, and what other ways are there to avoid suspicion?
  • Information assessment: during the negotiations, while much information cannot be revealed, what can has important, probably unforeseen, but not obvious implications for the other side.

Download a Teacher’s Package today.

Bradford Development

This two hour, two-party, single-issue distributive negotiation is over a linkage payment that a developer must make to a city government. Bradford, an old New England industrial city, is experiencing an economic boom. The city has recently adopted a ‘linkage agreement’ policy, requiring developers to make once-off payments to the city to offset infrastructure and housing costs. Curry Corporation (‘Curry’) is the first developer to propose a major project under the new administration. After meeting with all the appropriate municipal agencies and citizen groups, the only major issue left unresolved in the proposed project is the appropriate size of the linkage payment that Curry should make to the city. Major lessons include:

  • Pre-negotiation analysis should include a realistic appraisal of one’s BATNA.
  • Distributive bargaining divides up a fixed pie, and is therefore inherently constant-sum. One party’s gain is another party’s loss.
  • Each party should explore the interests of the other side before making an offer. Making an offer before exploring the other side’s interests could anchor the bidding too high or too low, thereby minimizing one’s own potential gains.
  • When the negotiating parties are involved in an ongoing relationship, it is rarely (if ever) prudent to lie or misrepresent one’s interests.

Download a Teacher’s Package today.

Hong Kong Property Deal

This one hour, two-party, integrative negotiation is between a property owner and a neighboring business over the sale of two real estate parcels. The simulation is set in Hong Kong in 1996, just before the British returned Hong Kong to the People’s Republic of China. The Hong Kong Property Deal is a simple two-party negotiation that appears to have a single distributive issue (price), but contains several hidden issues that offer integrative opportunities. Major lessons include:

  • Bargaining range (both positive and negative bargaining range); (ZOPA).
  • First offers in a distributive negotiation: how and when to present a first offer.
  • Gathering information to determine the other party’s intentions and goals.
  • Managing information about our own intentions and goals.
  • Introduction to integrative strategy.

Download a Teacher’s Package today.

Take your training to the next level with the TNRC

The Teaching Negotiation Resource Center (TNRC) offers a wide range of effective teaching materials, including

Most TNRC materials are designed for educational purposes— for use in college classrooms or corporate training settings. TNRC cases and exercises help mediators and facilitators introduce their clients to a process or issue and help individuals who want to enhance their negotiation skills and knowledge.

Role-play simulations introduce participants to new negotiation and dispute resolution tools, techniques and strategies. Videos are also a helpful way of introducing viewers to key concepts, and TNRC books, case studies, and periodicals address the theory and practice of negotiation and conflict management.

Check out all that the TNRC has in store >> 

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