Case study on Negotiation and Resolution

Topic: Negotiation for the purchase of an apartment in Cluj in Hora zone

Context:
We decided with my parents to buy an apartment in Cluj, I also managed to
persuade them to look for it in the Horea zone even though mom wanted
necessarily to buy an apartment in a new building, but this would have made life
so much harder for me (since it would have been so far away from where I
needed to be whenever I wanted to go out) so this was a mini negotiation I had to
have with mom, since dad was completely supportive of my choice (Horea zone
was the best possible location for me so I could avoid taking the bus as much as
possible because the town center is in walking distance and the Fany bus station
was also in walking distance for when I went home or came to Cluj)
After picking the location I started to look for different apartments in Cluj to
get an idea of the prices.

1. Objective of the negotiation

After the initial negotiation with mom and some minimal research we could
define a SMART objective. Buy an apartment in Cluj, Horea Zone in walking
distance from the city center in the next 4 months (Nov-Feb) at the price limit of
100 000 euro, preferably with 2 separate rooms + kitchen (having a living room is
not a priority) and with payment in cash.
This is a SMART goal because it is:
 Specific, we knew exactly what we wanted and where we wanted it
(Apartment in Cluj, Horea zone, in walking distance from where I had to be
usually) and how we wanted to pay for it (cash), also we preferred separate
rooms instead of having a living room and a room
 Measurable, we had decided on a price cap on it (100 000 euro) + in the
end it was measured by the fact of getting or not an apartment
  Achievable, many people did it before us, and many will form now on as
well.
 Realistic, because dad had the cash reserve for the transaction.
 Time, we set out a time limit of 4 months after we decided on the purchase
(so we had the necessary time to visit at least 25-30 apartments and
compare them as data points for the negotiation process.)

2. Steps of negotiation
a. Preparation
We started the preparation by looking up online all the apartments in this
zone, even if they were above the price, we were willing to pay, so we could get a
clear picture of what changes the price, what has the biggest influence on it. Here
the purpose was to find what was having the biggest value in the eyes of the
seller and the buyers, so when we were getting the apartment, we could “attack”
the biggest weakness it had when the negotiation happened. We found that the
size and the closeness to the town center was far the biggest influence and the
furniture, natural light factor, and the degree of “finish” (how much was done to
make it look pleasant) were all secondary.
Afterwards I made a list of 25+ apartments we were going to visits to get a
good feel for what were they willing to offer for different prices. I called all the
agents and made appointments with each in a way that we would have enough
time to look at the apartment, understand the selling conditions of the owner
(was he/she old? Was it an inheritance? Moving out? Living in a different
country? Health conditions? Or they wanted to make a profit?) and still not waste
time. We made in total 3 trips to Cluj in November 2020 (it was a suitable time for
us because there were lots of uncertainty and it was before people got too used
to the new living conditions, Cluj was on and off lockdown in that period too, so
there was stress, uncertainty and fear underneath all actions people made).
 On each visit we listened very carefully to what the agent was saying about
the apartment and the owner, also dad made targeted questions to find out as
much as possible why was the apartment for sale. I was taking notes on an
agenda of all the considered key details mentioned so we did not forget any
important details since we looked at 8-10 apartments a day. (where I made
previously a map of the apartments, I had the size, price, phone number of the
agent, and other details already written down on separate pages to ease the
process and focus on new details). And we also made sure to mention that we
were going to pay in cash if we picked this apartment, but never talked about the
price (we were lucky enough to have a very kind agent on our first visit and she
warned us before going in the apartment to not mention the negotiability of
price, because if the owner says “no” there are small chances that they will go
against their word, so we should assume form the start that it is negotiable, so we
listened to her and it payed off big time).
One of the visits was a bit different, since by accident I contacted 2 different
agents for the same apartment (we did not sign any official visiting paper with
none of them). And since we ended up picking that one (reasons are mentioned
later) I would like to focus on the process we had.
 First, we came to see the apartment with a lady who was incredibly nice,
and inclusive, she played the game a lot better than us. She made sure to
ask questions about what each of us liked, and found connections with her
own experience, she had a natural talent to connect and to know in which
way to approach each of us (we were a dad, a daughter and a son and it
was not easy). Her verbal and nonverbal behaviors (see below) were
inclusive, inviting, and inspired trust.
 The second parson was a man in his 40’s and from the moment he got out
of his car he had an air of aggression and just unpleasant mood. He also
completely ignored me and my brother, everything he said and
communicated both ways was just aggressive and annoying.
 (More details in the verbal and non-verbal communication section of the
essay)
 After visiting all the apartments and having all the details we could get it was
time to make lists. I put all the apartments on paper, weighed the positives
against the negatives, made a value to price ratio and mentioned all the weak
spots of the seller. Some apartments were on sale to make a profit, those got
crossed out first (since the seller wasn’t willing to lower the price almost at all, so
it was a “door trapped in the nose situation” which was not convenient for us) but
kept in mind the valuable information obtained from there too. Other apartments
we visited were still above the price dad was willing to pay even after considering
the price we would get after the negotiation, so those had to go as well. Then I
made calculations of the actual price of the square meter of the apartment, and
while crossing out objectively and subjectively the potential apartments (I was
going to live there so also took in consideration how I felt when entering the
space) so we were left with 2 apartments with an inclination toward the one we
visited with 2 different agents.
I found something very interesting when doing the calculations, that I was
going to use, there was an apartment higher up on the street (had a more
convenient location) but had a smaller price/square meter) it was literally
underground and had extraordinarily little natural light, the furniture was new but
cheap and ugly, low ceiling, and arrangement of it was plain awful, but the other
party did not know that. (Strong point no1: We found a better price in a more
convenient location, even before negotiating on it.)
Second, we knew that the sellers of the apartment, a couple wanted to sell
the apartment because they owned 3 and the stress was too much with them
since they were in their 60’s. I didn’t use this as a point, but it helped to approach
the conversation with confidence since it was in their best interest to sell, and
since it was a cash payment it was very convenient for them. (Strong point no2:
Cash payment and fast transaction. No struggle with banks.)
 I also contacted some of our professors from the faculty who I knew dealt
with real-estate before asking what they predicted was going to happen with the
prices and if this was a suitable time to buy. They let me know that nobody knows
what will happen for sure, but it was a time of uncertainty, and I could use that to
my advantage. (Strong point no3: Uncertain economy and real estate market, due
to the virus and lockdowns nobody knows when students will return and what will
happen in the future with the prices.)
Strong point no4: We had many options to choose from.

b. Running Negotiation

After having a conversation with dad and listing everything I wanted to say
we decided to call the agent. It was a negotiation through the phone, so the only
aspect I had to control was my voice, which made it a lot easier since I was doing
this for the first time.
The apartment was listed at the price of 81 000 euro, and we agreed with
dad to offer 70 500 euro, which in my mind seemed as a ridiculously low price,
but he convinced me and told me that they will probably come back with a price
correction to 75 000 euro which was our agreed maximum that we would accept
to pay for this apartment, anything above that had to be refused. (This was
already including 2 negotiation techniques, forecasting, and saying “no” if it was
the case)
When I called first, I asked how she was doing and how did that weekend
trip go that she told us about (using the accommodation technique). She told me
that it was grate and then she proceeded to tell us that the husband of the seller
had a heart attack recently, which was bad news but did put us in a better
position, I expressed that I was sorry to hear this.
 Then in a pleasant tonality continued to tell her that we came up with a
price offer for the apartment and that we have 3 that we liked, but this is the first
one we want to place an offer on. I told her that the offer was 70 500 euro, she
said that there is a significant difference compared to the listed price. This was
exactly what I was waiting for to “pick up my guns” than I went in with a front
attack/Russian front with all my arguments of why I consider this to be the right
price.
I told her that actually we did find an apartment in a better location which
was bigger and had a lower price/square meter without even negotiating on it,
and this is what the apartment values according to that. She did want to say
something, but I did not let her start and continued with an accommodating
argument which probably would inspire safety for the owners and told her that
since we consider that we want to pay in cash I feel like they would be willing to
compromise on the price. Then used the fear inspiring argument that the
economy was very volatile and there was no certainty that in the future they
would get even this amount for it.
Finished by letting her know that if we don’t get to an agreement, it’s
absolutely fine, we’ll proceed to put offers for the other 2 apartments as well, and
that we are grateful that she showed us the apartment in the first place. Then I
stopped and waited for a few moments for her to process the best response. She
was very diplomatic and told me again that there is a very big difference between
the 2 prices, but she will talk with the seller and come back with what they would
accept. I thanked her for her effort and told her that I’m waiting for the response.
(This has nothing to do with the project but dad who was there and was listening
to the conversation had such a proud expression, never saw that before 😊)
 c. Closing
In 2 days, she called back and told me that she talked with the seller and
that she is willing to accept 71 000 euro, just so it’s a round amount, and she can
stay calm and focus on the health condition of her husband. In that moment I was
extremely shocked, forgot all the plans to say I will have to discuss with my dad
and the rest, and I just said YES! It is grate, we accept!
Then we talked about the arrangements to sign the contract and what would be
the next steps to finalize the purchase.

3. Elements of communication
a. Verbal
Above there is a very detailed description of the verbal communication that
went on. An important part to mention is that from the very beginning there was
a very important element of active listening on our part of everything we heard.
We focused on the message, kept in mind the information, adjusted our behavior,
and took notes. We did not permit ourselves to pseudo listen or non-listen,
because every bit of extra information was of very high value for us.
In the case of the more experienced agents, I also saw this happening, they
tailored the conversation to accommodate/validate what we had to say, about
our experiences and opinions. In the case of very young agents this was missing,
even I had a default sympathy for them because we were close in age, they were
very self-absorbed and concentrated only on the benefit they could have from the
sell and created a distance.
We also asked questions whenever they didn’t mention a piece of
information we were interested in, in particular “why is the apartment being
sold?” “For how long is it on sale?”
After every encounter we had a short reflection time, where we talked
about how it went while heading to the next place and agreed on what we
wanted to change in order to improve the interactions and also went through the
important details of the next apartment we were going to visit.
At the apartment we ended up choosing:
♦ The lady was talking in a clam way, was very interested in what we had to
say and made real efforts to listen and talk to everyone present.
♦ She was listening to what each of us had to say and tailored her message to
fit all of us, if she repeated information or was asked a question, she said it
every time in a different way to suit the person she was talking to at the
moment.
♦ She did not insist on anything but planted seeds about the fact that she
personally knows the sellers and they have a very good relationship, thus
she could negotiate the price more easily. Also made it clear that no matter
the buying price, she is Ok with a fixed minimum commission of 1 000 euro
(which according to the selling price should have been 1 620/1 420 euro)
♦ When we first got there, she mentioned that she is the only one
“supervised” with the selling of the apartment TO HER BEST KNOWLEDGE.
(That was a particularly important detail she added, because she was not
the only one, but this way it was not a lie)

♦ The man has form the very first moment almost completely ignore me and
my brother with everything and choose to talk only to my dad.
♦ He insisted on the simple message that he could bargen us the apartment
for a very good price and repeated this endlessly.
♦ He also said that he was the only one “supervised” with selling the
apartment, but in a very certain way. And I said that no, we were already
here once today to visit it. He got angry, aggressive, and defensive about it,
and directly asked if we were with a lady, so the was completely aware of
the fact that he was lying. That was a major red flag. And then proceeded
to threaten us that he will let the owner know that we were here with the
lady. (That was comic, he looked very foolish)
 b. Non-verbal
 The lady had very inviting body language from the start. She positioned
herself in a way that she was never turning her back to none of us (we
made that hard to execute I might add)
 Her voice tonality was always pleasant and inspired trust
 She looked the person she was talking to in the eye all the time
 She had her shoulders back and her arms near her body, which signaled
openness
 She was smiling often, but not the entire time, she did it when it was the
right moment to do so
 When she was explaining technical details about the apartment, she was
playing with the keys, which signaled that she needed to remember and
focus on the information and that it was not necessarily her strong point.

♦ The man, had an aggressive and arrogant air as soon as he got out of the
car, so much so that he considered that it is oke to simply great us verbally
and not even look to us (me and my brother)
♦ He almost never looked at me, besides when he was forced to because I
intervened in the conversation, or my dad expected the answer from me.
♦ He had his hands sometimes in front of him, forming a barrier, but more
often in his pockets, which was a signal that he was hiding either
information or insecurity form us, he also had a foot forward and putted
pressure on that one which again was just an aggressive position.
♦ When we were talking in the apartment, he was facing only dad and he was
with his side to me and with his back to my brother.
♦ His tone carried a lot of aggression as well and talked in a very loud way
(which is a sing of insecurity usually)
 4. Negotiation technique
a. Forecast
b. Accommodation
c. Front attack/Russian front
d. Playing on weaknesses
e. “I want it, but I have options...”
f. “You want to sell it more, than I want to buy... “- at least that’s how I
wanted to make it seem

5. The result of negotiation (win-win)

I would consider the negotiation and the transaction a win-win situation,
since we got the apartment at a very convenient price (which appreciated a lot
since) and they sold it and got rid of the stress it came with owning it, probably
the husband is better now, and they did not have to stress about the procedure
with the back.