Effects of Factors Influencing Residential Property Negotiation Process on Market Outcome in Akure, Nigeria

Rasidat Adejoke Oladapo

doi:10.7176/jesd/12-8-08

Abstract

This study determined the effect of factors influencing residential property negotiation process on the final market outcome in Akure, Nigeria. The research design was field survey in which the target population were the property buyers within the three selected residential densities of the city. Data was elicited from the self administered structured questionnaire to the 400 property buyers sampled. Data analysis was performed using logistic regression model where the dependent variable was market outcome and the independent variables were eleven dichotomous variables. The findings revealed that some variables showed significant values at p-value ≥ 0.05 influences on market outcome. These variables were agents’ commission, owners’ reservation prices, communication channel, property titled, duration of transaction, owners’ negotiators behaviours and neighbourhood characteristics. The variables that showed insignificant values of influence on market outcome were number of negotiators in each transaction, buyers’ reservation price, strategy employed, buyers’ negotiation behaviour; and cultural differences. There was information asymmetry between the owners’ negotiators and buyers as most of the buyers did not have an independent negotiators to strike a fair outcome (final price) The study therefore recommended two independent and skilled negotiators who had the detailed knowledge of information on the previous market condition and range upon which to strike a fair deal. Equally there should be parallel market price regulatory agencies that must keep and regularly display past records of transactions. Such must be used to negotiate present transactions. No doubt this will break the information advantage that often make owners to have an edge over the buyers. Keywords: Akure, Market Outcome, Negotiation Process, Property, Residential DOI: 10.7176/JESD/12-8-08 Publication date: April 30 th 2021

Highlights

Real property negotiations usually serve as means to settle buyer and seller interaction concerning final price, date of delivery, and service contracts (Sabine, Markus and Uta, 2009)
4.0 FINDINGS AND DISCUSSION OF RESULTS data collected for the analysis were obtained through the structured questionnaire administered to the 400 property buyers within the three selected residential densities, out of which 369 were retrieved representing 92 percent response rate being used for the analysis needed
5.0 CONCLUSION AND RECOMMENDATION The study build on the established factors that could mostly influenced negotiation process of residential properties within a medium sized Akure city in Nigeria towards the final price of transaction known as market outcome

Summary

INTRODUCTION

Real property negotiations usually serve as means to settle buyer and seller interaction concerning final price, date of delivery, and service contracts (Sabine, Markus and Uta, 2009). Gatzlaff and Liu (2012) examined list price information in the negotiation of commercial real estate transactions, Using a two-stage selection correction model, the study showed that office properties which provide list (asking) price information are (on average) associated with lower price outcomes signifying that both parties are well informed about negotiation outcome. This study considered the influence of those factors that have been established from literature (agents commission, owners and buyers reservation prices, communication skill; channel strategy employed, owners’ and buyers’ negotiators behaviour, cultural differences, duration of transaction, property titled and neighbourhood characteristics) as the factors influencing negotiation process on the market outcome. Its findings would be of immense benefit to potential buyers and tenants in real property transactions and the possibility of employing the services of skilled negotiators (Estate Surveyors and Valuers) in order to achieve fair outcome in property transaction. Www.iiste.org neighbourhood characteristics with their scale of measurement in table 1 below

Neighbourhood Characteristics

Plot Size

Overall Percentage

Nagelkerke R Square