Hawaii Randy's Real Estate Opinions: March 2010

I recently took a course to become certified to teach continuing education in Hawaii.  For the final project, I was given an assignment to make a presentation to the class which was made up of real estate instructors and some of the members of our real estate commission.  I selected the title from a short list that was supplied to me.  It was "The 3 P's of Negotiation". They gave me the title but did not mention what the 3 P's were.  I was left on my own to be creative.

Here is a rough overview of my presentation. 

There are three steps to a successful negotiation, known as the 3 P's of Negotiation.

      - PREPARATION

      - PRESENTATION

      - PAUSE

I am sure that many of you have your own idea of what makes for quality preparation and presentation.  For this example we will be looking from the eyes of a real estate agent who is representing a buyer for the purchase of a residential property and has already identified a property they wish to make an offer on.

PREPARATION:  The agent needs to do research.  Check public records, do a comparable market analysis, view the property and interview the seller's agent.

1. Identify any potential issues like zoning, building permits.
2. Look for red flags on the property that may affect the value to the buyer.
3. Try to get a read on the seller's motivation.
4. Determine market value of the home.
5. Meet with the buyer to determine their motivation.

PRESENTATION:  Prepare an offer to the seller that will give the buyer their best chance at getting the best deal at the best terms for them possible.  Present that offer to the sellers via their agent.  Here are some of the elements to that offer.

1. A clean executable purchase contract. A contract with no unusual special requests that a seller may object to.  A complete contract that has every signature, correct math and all needed attachments and addendums.
2. A price that is reasonable, close to what we believe is the lowest the seller is willing to go, possibly a little below that.
3. A strong loan approval letter from the funding letter, not a broker.  A letter from Central pacific Bank who approves and funds the loan is much stronger than a letter from Bob's Mortgage and Hair Cutting Emporium.
4. A nice cover letter that explains and part of the contract that there may be questions and introduces your clients and yourself to the sellers.
5. A reasonable period of time to make a decision. (No game playing).
6. Nothing too creative, nothing that will make them nervous.

Your offer needs to be so clean that if they sign it you are in escrow.  An offer that has mistakes and missing elements is a big disservice to your client.  If you create an environment that they are forced to counter for housekeeping you open the door for price and terms to be back on the table.  You eliminate your shot at getting your first offer accepted.  You want that offer so attractive that they are afraid to chance losing the buyer, even if the price is a little less than they really wanted to accept.

PAUSE:  This is the most important part.  Once you have presented your offer, stop talking.  He who speaks first usually loses in a negotiation.  Give the seller enough time to stew it over.  Let them get used to the idea of maybe accepting a little less money to get a stress free sale.  If their agent calls and tries to extract information that may help their clients in the negotiation, keep your cards close to your vest.  Give them no hint, leave the doubt as to what would happen if they counter.  Leave them having to decide whether they want to risk losing such a solid offer or whether they will just sign it.  Remember, he who speaks first usually loses.

l looked up at the meter this morning a realized that I would be passing the half million point mark on Active Rain with this post. 

I haven't checked yet.  What do you win with 500,000 points?  Do you get a gold watch or a trip to Las Vegas?  I would even settle for shooting lessons from TLW or a hula class with Blogging Bertha.

When I joined Active Rain there were not many regular writers.  I believe I could name almost all of them.  Now there are many thousands and growing.  Not bad for an idea drawn up on a napkin.

The Active Rain members have been a huge influence on me and my business.  The sharing of knowledge here is like no other place I know of.  Active Rain is incredible.  You can connect with many more industry professionals than you could in almost any other forum.   You also have the public participating in the process.

Several of my clients were able to do a silent interview of me.  They came to my blog and read my posts.  They were able to get a good idea of what type of agent and person I am.  Agents from other states and counties are able to do the same when looking for someone to refer their clients to.  In this regards Active Rain has been a wonderful added dimension to my business.

I guess what I am building up to is:  THANK YOU ACTIVE RAIN!!!

Good luck to all and happy blogging. 

Stephen L. J. Mau from Mililani High School goes undefeated to finish as the State High School Chess Champion!  Stephen stepped in this year to fill the big shoes of 2-time National Champ Robert Lau who graduated from Mililani High School last year.  Under Stephen’s leadership, Mililani High School finished tied with Kamehameha Schools as the team champs.  This is the third straight year the Mililani High School team has finished at the top of the heap at the State Championships.  Teammate Ryan Jose` Palomares finished tied for the top 11^th grade spot.

Evan Zheng from Mililani Middle School tied for the top State Middle School spot, becoming the Co-Champion.  The Mililani Middle School team was short a player, yet won the silver medals.  The mighty three came within a ½ point of taking the team title.  In the elementary school division, Kevin Zheng from Mililani Ike finished as the state’s top 5^th grader. 

The 2010 State Scholastic Chess Championships were held Saturday, March 13, 2010 at Washington Middle School in town.  It was organized and directed by former state representative Guy P. Ontai, who is the Mililani Chess Club president and the State Scholastic Director for the Hawaii Chess Federation.  Guy was assisted at both events by area REALTOR®, Randy Prothero who serves as a director/ instructor for the Mililani Chess Club and is the President of the Hawaii Chess Federation.

The duo held the State Scholastic Blitz Chess Championships (5-Minute Chess) the previous Saturday at the same location.  Blitz chess is high speed and exciting.  In that event Evan Zheng tied for the top spot for the Middle School Division and led his Mililani Middle School team to the gold medals.  Other notable, Jacob Prothero from Hanalani School tied as the state’s top 3^rd grader for blitz chess.

Detailed results from both events listed above can be found at: www.HawaiiChess.org/tournaments.html   A list of state champions current and past can be found at: www.hawaiichess.org/Champions.html

The Mililani Chess Club is open to the public and meets on Thursday’s from 6pm to 9pm at Rec. Center 6.  Mililani Chess Club offers lessons for beginners and has trained both state and national champions. The website for the Mililani Chess Club is: www.MililaniChess.org