NAR Negotiation & Closing Techniques 3 — Questions and Answers
Question 1: A buyer loves a home but is hesitant about the price. Which technique would an agent use when saying 'Shall we write the offer with a 30-day or 45-day closing?'
- Trial close
- Assumptive close
- Either/or close (Correct answer)
- Hard close
Correct answer: Either/or close
The either/or (alternative) close offers two choices, both of which move the transaction forward, sidestepping the yes/no decision entirely.
Question 2: In a multiple-offer situation, which non-price strategy can make a buyer's offer most competitive?
- Requesting the maximum number of contingencies
- Offering a larger earnest money deposit with a shorter inspection period (Correct answer)
- Extending the closing date to give the seller more time
- Including a personal letter criticizing the home's decor
Correct answer: Offering a larger earnest money deposit with a shorter inspection period
A large earnest money deposit demonstrates financial commitment, and a shorter inspection period reduces seller uncertainty in a multiple-offer scenario.
Question 3: What is an escalation clause, and when is it most appropriately used?
- A clause allowing the seller to raise the price after acceptance; used in slow markets
- A buyer's offer to beat competing bids by a set increment up to a maximum; used in competitive markets (Correct answer)
- A lender requirement to increase the interest rate at closing; used in refinancing
- A clause requiring price reduction after 30 days on market; used in buyer's markets
Correct answer: A buyer's offer to beat competing bids by a set increment up to a maximum; used in competitive markets
An escalation clause automatically increases a buyer's offer above competing bids by a specified amount up to a stated cap, commonly used in hot seller's markets.
Question 4: A seller rejects an offer but does not provide a counteroffer. What is the buyer's agent's best next step?
- Advise the buyer the deal is dead
- Contact the listing agent to understand the seller's objections (Correct answer)
- Immediately submit a higher offer without additional information
- File a complaint with the local board of REALTORS
Correct answer: Contact the listing agent to understand the seller's objections
Communicating with the listing agent to understand what fell short gives the buyer's agent information to craft a more acceptable offer.
Question 5: The 'feel, felt, found' technique is best described as:
- A home inspection methodology
- An empathy-based objection handling approach that validates concern then redirects (Correct answer)
- A pricing strategy based on comparable sales
- A closing technique that pressures buyers to decide quickly
Correct answer: An empathy-based objection handling approach that validates concern then redirects
'I understand how you feel, others have felt the same way, and what they found was...' validates the client's concern before presenting a resolution.
Question 6: When is it appropriate for a REALTOR to use a 'lowball' offer strategy for their buyer client?
- Always, to maximize savings regardless of market conditions
- When comparable data supports a lower value or the property has been sitting on market (Correct answer)
- Only when the listing agent is also a REALTOR
- Never, as it violates NAR ethics
Correct answer: When comparable data supports a lower value or the property has been sitting on market
A below-list offer is justified by market data or extended days-on-market but should always be grounded in comparable sales analysis.
Question 7: Which negotiation principle does NAR's Code of Ethics most directly support when an agent has confidential information about the other party?
- Use all information to maximize your client's advantage at all costs
- Protect client confidences while avoiding misrepresentation to all parties (Correct answer)
- Share information only if asked directly by the other agent
- Disclose all information to ensure both parties are equally informed
Correct answer: Protect client confidences while avoiding misrepresentation to all parties
NAR's Code requires agents to protect client confidentiality (Article 1) while also prohibiting misrepresentation to any party (Article 2).
NAR Negotiation & Closing Techniques 3
A buyer loves a home but is hesitant about the price.
Which technique would an agent use when saying 'Shall we write the offer with a 30-day or 45-day closing?'