The House on Elm Street

Confidential Information for Tracy

You (Tracy) have an 87-year-old uncle who lives in a beautiful, old Victorian house with a
wooden exterior (called siding). The house sits on a large lot that is very longalmost 150
feet (46 meters) deep. The back yard alone is almost 75 feet (23 meters) deep. He purchased
the house and lot in 1964 and has lived there ever since. Your uncle has no other relatives.

Your uncle has decided to sell the house for two reasons: (1) The house has been poorly
maintained over the years and needs expensive work that he cannot afford. There are
also signs that the basement might have a leak. (2) Your uncle has health problems and
has decided to purchase an apartment in a building designed for the elderly. Your uncle
has asked you to help him find a buyer.

The house is located on Elm Street, which is west of Main Street. See Lot A on the attached
diagram, which is not drawn to scale. The law allows areas east and west of Main Street to be
used for both business and residential purposes. But the area west of Main Street is entirely
residential, with no businesses. Several years ago, your uncle formed a homeowners'
association that has fought to keep businesses out of the residential area west of Main Street.

Your uncle must sell the house for at least 150,000 to buy an apartment in the building for
the elderly. Several weeks ago, a young couple was interested in buying the house for
150,000, but they bought another house instead after they discovered that your uncles house
needs major repairs. Before today, no one else has been interested in the house.

Your uncle recently learned that the owner of Lot B signed a contract to sell his house. This
house is almost identical in size to your uncles house. Because the transfer has not yet been
finalized, no public information is available. When you attempted to obtain further information,
the owner of Lot B refused to discuss the sale. You wonder whether he is selling to a business.
You also heard rumors that the owner of Lot C is considering selling her house. These rumors
concern you because a fast food restaurant or a convenience store on Lot B or Lot C would
greatly reduce the value of your uncle's house.

Despite these rumors, you would love to buy the house. You fondly remember attending family
parties in the house and playing in the large backyard when you were young. But you have
many debts and cannot afford to buy the house.
 Your uncle just told you that a person named Pat called today to ask whether the house might
be for sale. You remember Pat from high school. Pat is two years older than you and married
one of your classmates. You have heard that Pat has a growing family (with the recent addition
of a fourth child) and works at a local bank. Pat currently lives in a small house in another part
of town. You immediately schedule a meeting with Pat to discuss the possible sale of uncles
house.

Your uncle asked you to discuss with Pat a few issues in addition to price:

Flexible 1

1. The possession date. Your uncle prefers to transfer possession three months after the
contract is signed. This would give him time to sort through his possessions in the house. You
dont think this will be a problem because Pat will probably need at least three months to sell
the small house where the family currently lives.

2. The exterior siding. Because he loves the house and the neighborhood, your uncle
wants the contract to include a clause stating that Pat promises never to cover the wood
exterior (siding) with plastic or metal siding.

3. Down payment. When contracts are signed in this area, buyers give sellers a down
payment. Your uncle wants a large down payment (sometimes called earnest money). Down
payments in your area are normally 10% of the purchase price and buyers who fail to perform
the contract forfeit this amount. Your uncle wants Pat to agree to a payment of at least 15%
(and hopefully much higher) of the purchase price.

4. Tile artwork. Your uncles wife, who died several years ago, installed a beautiful piece
of glazed tile artwork (twelve inches by twelve inches) in the plaster of the kitchen wall. Your
uncle wants to remove this tile artwork and take it with himwhen he leaves the house.

Your uncle will not compromise on issues 2, 3, and 4. If you do not get what your uncle
wants, you have no deal. He is flexible on issue 1.

The neighborhood is very stable. Apart from the upcoming transfer of Lot B, the most recent
sale was six years ago, when Lot D (across the street from Lot A) sold for 135,000. Lot D is
very similar to your uncle's property except that the house is in much better condition than your
uncles house. Property values in this area have increased considerably since the sale of Lot
D. Your uncles property is assessed for tax purposes at 140,000, but tax assessments are well
below market value.

Prepare for your negotiation with Pat. Given your uncles poor health, you hope that a contract
will be signed as soon as possible.
 Self-Assessment and Feedback for the Other Side

Complete the following assessment after negotiating House on Elm Street. Do not read the
instructions below before completing your negotiation!

Self-Assessment

1. What did you do well?

2. How can you improve?

Feedback for the Other Side

1. What did the other side do well?

2. How can the other side improve?

Prepare numbered lists when answering these four questions. Please try to provide feedback
to the other side during a meeting. If a meeting is not possible, written feedback is acceptable.

Be as honest and candid as possible. This is a rare opportunity to share information about your
negotiation strategy and skills. Please make the most of this opportunity. Use the results to
prepare a plan for improving your negotiation skills in the future.

Here is a list of possible factors, among others, to consider when you complete your self-
assessment and provide feedback to the other side. The list below includes references to
chapters in the course reading, Negotiating for Success.

Acted in an ethical manner? (Chapter 4)

Established a relationship? (Chapter 5)

Asked questions and listened carefully to the answers? (Chapter 5)

Developed and used power (BATNA strategy) during the negotiation?

(Chapter 5)

Found out whether the other side had authority? (Chapter 6)

Searched for underlying interests and identified interests that are not in
conflict in an attempt to build a larger pie that benefits both sides? (Chapter 7)

Used an effective first price strategy? (Chapter 7)

 Looked at negotiation from the other side? (Chapter 7)

Kept a big picture perspective? (Chapter 7)

Considered the legal requirements for a contract? (Chapter 8)