Question 28

The licensee should suggest that the seller counteroffer at $152,500.

By suggesting that the seller counteroffer at $152,500, the licensee takes a strategic approach that allows the seller to negotiate effectively while remaining within the buyer's indicated willingness to pay up to $155,000.

A) refuse to present the $150,000 offer.

Refusing to present the $150,000 offer would be unprofessional and contrary to the licensee's duty to act in the best interest of the seller. The licensee is obligated to present all offers received, and refusing to do so could harm the seller's opportunity to negotiate.

B) inform the seller that the buyer will pay $155,000.

This option is misleading as it suggests certainty about the buyer's intentions without any formal offer. The licensee should not present information that has not been formally communicated, as it may create unrealistic expectations for the seller.

C) suggest that the seller counteroffer at $152,500.

This option is effective because it proposes a counteroffer slightly above the initial offer, which could entice the buyer to increase their bid while still being below their maximum willingness to pay. This strategy maintains negotiation momentum and adheres to the licensee’s fiduciary duty to maximize the seller's return.

D) suggest that the buyer make an initial offer of $152,500.

Suggesting that the buyer make an initial offer of $152,500 would not be appropriate since the buyer has already made an offer of $150,000. This option does not utilize the current offer effectively and could confuse the negotiation process.

Conclusion

The rationale for choosing option C lies in its strategic nature, allowing for a counteroffer that is likely to be acceptable to both parties. Options A, B, and D either breach professional conduct, misrepresent buyer intentions, or fail to utilize the existing offer effectively, thereby not serving the seller's best interests in the negotiation process.