Bargaining and Negotiation: Using Techniques to Get the Best Price for House

Description the Situation and Negotiation Environment 

A real-life bargaining and negotiation situation that is expected to occur soon with the involvement of two parties and multiple issues is the buying of a dream home. In this respect, the negotiation environment is expected to be a real estate business engagement where different homes are sold for different prices based on various conditions and terms of the agreement. In this particular bargaining and negotiating option, one of the issues that are likely to emerge is that of a fair or reasonable price of the house concerning the existing conditions or circumstances in the market. The other issue is whether the features of the home are meeting the expectations of the buyer. 

Identification of the Parties Including the Bargaining Positions 

In this situation of bargaining, the parties involved on the negotiating table would include me, my lawyer, and my real estate advisor on one side and the real estate company and their agents on the other side. As an aspiring buyer of a dream home, I would be contemplating a situation where the position of the real estate company would be to sell the house at a price that is not less than $50,000 which implies the company values the home at $50,000. I would be willing and able to purchase that particular house at $40,000 having considered other available alternatives. The bargaining position of the real estate company would be to lower the selling price to $48,000. On the other hand, by bargaining position would be to increase by offer in burying the house to $45,000. If the company agrees to sell the home to me at$45,000, then I would have succeeded in defending my Best Alternative to a Negotiated Agreement (BATNA). In this bargaining situation, it would not be necessary to have the services of a third party intervention such as mediation or arbitration. 

Derivation of the Best Alternative to a Negotiated Agreement (BATNA) 

In this particular negotiation involving bargaining for a favorable price and the best features while purchasing a dream home, the derivation of the Best Alternative to a Negotiated Agreement (BATNA) would involve specifying at the available alternatives. It this situation, it would be crucial to developing a list of other options of engagements whose negotiations would most likely culminate into the purchase of a house with similar desirable properties and lower price. It is worth noting that the offer to purchase the home being offered would be rejected if the proposed value of the deal goes below the reserved value according to the stated BATNA. However, it would be advisable to agree to take the offer if the final proposal has a higher value compared the one reserved under BATNA ( Crump, 2016). Besides, a stronger BATNA would be desirable since it would play a crucial role in enabling the understanding all the other available alternatives to the deal thus providing the opportunity for the intending buyer to reject a tempting and unfavorable offer. Moreover, the pressure for settlement of a negotiation involving a buyer of a home and the seller may prevent either of the negotiating parties from exuding a certain level of weakness and accepting the terms and conditions do not coincide with their BATNA. In some cases, skilled parties involved in a situation of negotiation such that of selling and buying a home are often placed in a better position to recognize any irrationality associated with trying to agree to terms and conditions that fail to meet the respective BATNAs. In that respect, there is always a higher likelihood for negotiations to stall and may resume at a later date. 

Evaluation and Analysis of the Process 

Theoretical Models 

Strategic Negotiation Theory 

The inspiration behind this theory emanates from the understanding of different approaches may be employed in finding the best alternative in a situation involving the aspects of bargaining and negotiation. The two methods are axiomatic and strategic where the axiomatic method is engaged with the implication of several solutions that are unique and tend to be dominant. The axiomatic approach may be termed as the cooperative theory because the parties involved in a negotiation are usually allowed to engage in agreements that are binding. On the other hands, the focus of the strategic approach is the kind of strategies that the negotiating parties are likely to choose in the process of bargaining that involves non-cooperative game modeling over a given duration. According to Ramsbotham and Schiff (2018), various attempts have been presented with the objective of combining the axiomatic and strategic approaches. One of such presentations involves the design and development of a program meant for guiding the analysis of different sets of bargaining alternatives and solutions which are achievable through striking equilibrium in the process of strategic bargaining. 

Behavioral Negotiation Theory 

Behavioral negotiation theory is firmly rooted in the sociology and organization framework among various other related disciplines and fields. Within the traditional understanding of the behavioral negotiation theory, there seem to a considerable extent of amenable inclusion of different aspects of reconciliation with the ability to employ strategic or game negotiation theories. The analysis by Watkins (2003) indicates that the emphasis of behavioral approach usually involves in the individual characteristics, personalities or the roles played by the different parties involved in a given process of negotiation. These considerations are generally crucial in the process of determination of the outcome as well as the course taken by negotiated agreements. The behavioral negotiation theory may be used in providing a description and an explanation concerning interactions involving different personalities in the course of the process of negotiation. In this regard, the personalities under consideration, often assume dichotomies form such as soft liners, hardliners, worriers, and shopkeepers among others. 

The behavioral negotiation theoretical framework is considerably linked to experimental and psychological traditions as well as the diplomatic treaties that were commonly happening in the old days. Such traditions largely share the points of view that negotiations between different parties happen. Researchers have been able to articulate several forms of personal motivation or orientations formulated by the ability of an individual to navigate across the extent of interest considering interpersonal relationships and the associated outcomes (Tomlinson & Lewicki, 2015). The emerging typologies linked to motivational orientation may be represented in the form of continuums which include the altruistic, the individualistic, the competitive, and the cooperative. Individuals do tend to exhibit individualistic orientation often receive their motivation through concern for the wellbeing of the parties involved in a negotiation. 

Bargaining Theory 

The theoretical bargaining model is a representation of game theory that focuses on the analysis and evaluation of bargaining problems where different parties are involved in negotiations regarding the division of a given set of goods. Solutions to bargaining circumstances and challenges usually imply the presence of the level of determination accorded to a division by the parties involved. The application of the bargaining theory may include social, political, and economic situations among others. Mainly, it may be acceptable for one to pursue the implementation of axiomatic technique or approach to bargaining situations which involves the consideration of bargaining as an engagement that requires a strategic or dynamic approach. According to Watkins (2003), negotiation aspects may be examined in a different perspective. To that extent, this particular theoretical framework involves the objective of providing advice to the parties involved in a given negotiation. 

Methods 

According to Tomlinson and Lewicki (2015), the methods of bargaining may be classified in four different categories namely conjunctive bargaining, co-operative bargaining, composite bargaining, and productivity bargaining. The conjunctive method of bargaining is usually appropriate where the parties involved in a negotiation are employees and employers. In that regard, both the parties often use this method while attempting to bargain and negotiate for the maximization of their different respective benefits and gains such as hours of work, bonuses, and wages among others. Besides the kind of principle that is commonly practiced in this bargaining method is that of "my loss is your gain, and your loss is my gain." The bargaining parties are often interested in yielding the lowest possible amount of benefits while focusing on acquiring the highest reasonable amount of profits from the other bargaining party. The co-operative method of bargaining is usually characterized by the involvement of both sides of the bargaining parties in the realization of the significance of the survival aspect especially in times of difficulties such as harsh economic situations. 

The kind of negotiations involved in this kind of bargaining tends to be flexible in many aspects. For instance, the workers in a given organization may agree to a recommendation to have their salaries slashed whereas the management may accept the requirement by the employees to modernize their workstations. In the productivity method of bargaining, the benefits offered are usually associated with the level of productivity offered by the other party. For instance, if one of the bargaining parties agrees to go beyond certain set standards, then they will be liable for substantial gains from the other party. In this regard, negotiations are expected to play a critical role in the finalization of standard productivity. Ramsbotham and Schiff (2018) maintain that the agreements made in the course of productivity bargaining are usually crucial in increasing the number of benefits or gains received by either of the parties involved. In the composite method of bargaining, the kind of negotiations conducted often focus on the achievement of equity especially in matters concerning standards of manning, levels of employment, and work norms among others. 

Sources of Power 

Power in bargaining and negotiations emanates from the major sources. One of such sources is represented by a more appropriate and stronger BATNA (best alternative to a negotiated agreement). For a negotiating party, the BATNA often acts as the most significant source of power that he or she uses to negotiate for his or her desired benefits. Ensuring the cultivation of a strong alternative outside the boundaries of bargaining plays a vital role in equipping a party with the required power to decide to move out of a bargaining situation is the deal becomes unappealing (Watkins, 2003). For example, a person who is interested in purchasing a dream home could enhance his or her bargaining power by attempting to fund a different house with similar desirable properties or features. The second source of power is the role and responsibility, or the role played by either of the parties participating in a bargaining situation. 

Useful bargaining power may emanate from a stronger role, position or title assumed or occupied by either of the bargaining parties. For instance, a higher rank occupied by an individual in an organization may give him or her more bargaining or negotiating powers over the other parties who hold lower ranks. An employee will most likely cede some grounds concerning the preferences of his or her employer owing to the power of influence associated with a higher status. The third source of power used by parties in bargaining and negotiations is the psychological state. In this respect, parties in a negotiation situation may opt to employ the influence of psychological power with the objective of creating a feeling that they are more capable and powerful even when that is not the actual case (Ramsbotham & Schiff, 2018). An individual who considers himself or herself more powerful while participating in a bargaining or negotiation process is likely to acquire more confidence which enhances the outcomes to his or her advantage. 

Evaluation of Analytical Procedures 

One of the aspects of the analytical procedures that play a critical role in the analysis of the process of negotiation is the structural analysis. The basis of this particular analytical aspect is the distribution and positioning of different elements such as sources of power for negotiations, possession of resources, and the prevailing options among others. Structural analysis may be regarded as one of the most common approaches to analytical procedures used on the process of negotiation. The application of this particular analytical aspect often assists the negotiating parties to make clear distinctions between power structures and deterministic identities in a manner that involves the use of independent levels of power through places more emphasis on the abilities of different sides of the negotiation to result in the achievement of favorable or desirable outcomes. There is a certain situation of negotiation that is characterized by circumstances of asymmetry (Crump, 2016). In this case, the desirable performance displayed by the weaker side of the negotiating receives empowerment to face negotiation challenges. Different tactics have a critical role to play in the provision of various prescriptions that are necessary for overcoming asymmetry. 

In some cases, the structural analysis used in the analysis of negotiation procedures tends to place more emphasis on dealing with sources of bargaining power that may be regarded as in incidental, responsive or situational. The analysis by Tomlinson and Lewicki (2015) indicate that four different analytical procedures may be useful in a negotiation process namely perspective, symmetrical, symmetrically perspective, symmetrically descriptive, and externally descriptive. The analysis of negotiation procedures also considers the aspect of framing where parties of a negotiation tend to have a feeling of the existence of a disconnection between the situation of bargaining and the decision made. The strategies may be utilized in the process of reaching settlements regarding negotiations and bargaining is largely based on analytical and framing aspects. Various sources of information may also be widely adopted settling negotiation problems that revolve around the options available for all parties. 

Mechanics of the Procedures Concerning Framing, Packaging, use of Questions, and Types of Proposals 

One of the most critical considerations in the examination and evaluation of the procedures used in bargaining and negotiations in various situations include the concept of framing. The role of this particular concept involves the presentation of a comprehensive description of the different position held by the parties to a negotiation process. Watkins (2003) explains that the utilization of the concept of a frame in negotiations assists in the provision of a perspective of issues or problems as they relate with each other. A more appropriate understanding of the concept of framing by the different parties involved in a negotiation is critical in the determination of the possible outcomes as well as the consideration the contingency steps that may be used in solving different negotiation problems. The existing of the concept of framing also allows parties to consider different potential losses and gains and the options that may be available in any given situation. In a traditional form of negotiation, different parties were expected to come to the negotiating table with their various positions before attempting to obtain the best option from each other. 

This kind of negotiation used to involve the tendency of focusing on one particular issue and ensuring that it is settled to completion before proceeding to the next one. Such a method of bargaining involves a package that utilizes item-by-item or linear bargaining. The observation by Ramsbotham and Schiff (2018) indicates that this particular form of bargaining has a higher likelihood of being frustrating, exhausting as well as involving a lengthy process. Studies have been able to demonstrate the existence of an alternative package in the process of bargaining that focuses on attempting to highlight different issues and challenges at the same time. The idea of collecting and gathering different items in the process of bargaining plays a crucial role in ensuring the balancing off concessions with the objective of maximizing the values that may be available on every side of the bargain. Using questions in the process of bargaining and negotiation may involve probing which attempts to ensure the engagement of all parties in a candid discussion regarding different issues and outcome that may be considered. Crump (2016) clarifies that using probing questions in a bargaining process has a greater impact compared to the using off-hand questions. Besides, master bargainers and negotiators tend to probe artfully and prolifically in a manner that ensures that all parties are beneficiaries in one way or the other by the completion of the negotiation process. 

Some of the reasons that are considered for using questions such as probing in the process of negotiation include the need to test assumptions and building a rapport among the negotiating parties, getting desired information as well as isolating concerns and actual areas of interest. Different types of proposals may be regarded as useful in the process of negotiation or bargaining. In a distributive process of negotiation, the discussions are usually characterized by an escalating exchange of views and perspectives as we well as a considerable number of proposals over a certain duration ( McKersie & Walton, 2015). Such proposals are often considered before the deadline for negotiations and sealing of the deal reach between the parties involved in that particular process. In an integrative form of negotiation, there is often the consideration of a peak discussion and exchange of focusing on finding reliable solutions during the problem-solving stage. 

Strategies Utilized and the Results Anticipated in the Settlement 

Considering the settlement involved in the bargaining situation described in this paper, several strategies would be utilized. One of these strategies would involve increments in concession with the aim of a price of the home that will be within the BATNA or a point of reservation. In this particular bargaining, there is the anticipation that the other party would focus on making extreme offers at the beginning of the negotiation process with most of the bargaining placing significant emphasis on the final price of the home (McKersie & Walton, 2015). In this regard, the strategic consideration of the increment of concession implies the selection of a pattern with a higher likelihood of leading the other side of negotiation to keep guessing the possible BATNA present on the side of the buyer of the home. The other strategy that would be adopted in this particular bargaining is that of principled negotiation. 

This strategy is likely to make significant sense if the bargaining situation is characterized by valued relationships between the two different sides involved in the negotiation. In the event, this particular process prefers the adoption of integrative bargaining; the principled bargaining strategy would be most suitable. To that extent, the entire process would be expected to represent the involvement of different parties in the presentation and defense of their respective positions. Considering that this process of bargaining and negotiation is concerned with the selling parties that are interested in selling and buying a house, the other strategy that would be adopted is that of Multiple Equivalent Simultaneous Offers (MESOs) ( Tomlinson & Lewicki, 2015). This strategy would be expected to provide a versatile environment that would play a crucial role in allowing the negotiating parties to develop a reliable and robust system used in the creation of a scoring system capable of performing a qualitative analysis of different issues of consideration. The anticipated result is that the company would agree to sell the house at$45,000, would imply success in defending the buyer’s BATNA. 

References 

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85-102. doi: 10.1111/nejo.12149 

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Education: A Robust Record and New Opportunities. Negotiation Journal , 31 (4), 

491-499. doi: 10.1111/nejo.12132 

Ramsbotham, O., & Schiff, A. (2018). When Formal Negotiations Fail: Strategic Negotiation, 

Ripeness Theory, and the Kerry Initiative. Negotiation And Conflict Management 

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Tomlinson, E., & Lewicki, R. (2015). The negotiation of contractual agreements. Journal Of 

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