Question

Why defining the Target point (aspiration) point; Walk away (Resistant) point; and Asking price (initial offer) point are important in negotiation?

Answer 1

Target point: this is the desired aim of the buyer and the seller. Suppose a buyer is searching a house at $220,000 or below; a seller offers to sell house at $250,000. This is important to know because it gives an idea whether a negotiation bargain is possible or not. If the difference of target is low, the bargain is possible.

Resistant point: this is the bottom-line up to which the target points can move; beyond which bargain is not possible. This is also important to understand whether the bargain is possible or not. If the resistant rage is high, the bargain is possible. Suppose in the above example, if the buyer can pay at most (the resistant point) $235,000, then the bargain is possible if the seller is not rigid at $250,000.

Asking price: This is the initial price that may come from the buyer or the seller. This price is very important in order to stay in the negotiation, since it shows real interest. In the above example, if the seller offer price very near to its target point then it is implied that he wants to sell the house really. In some cases, the asking price of seller may be very high in order to avoid the dealing or selling.