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please read the attachment and answer the questions below. I am the buyer in this negotiation.  What strategies will you be using in the negotiation? Do you want to make the opening offer?  Why or why not? What strategies do you expect to see from your counterparty? How will you prepare to meet those strategies? Given your scenario, what other information is important for you to keep in mind while negotiating?

please read the attachment and answer the questions below. I am the buyer in this negotiation.  What strategies will you be using in the negotiation? Do you want to make the opening offer?  Why or why not? What strategies do you expect to see from your counterparty? How will you prepare to meet those strategies? Given your scenario, what other information is important for you to keep in mind while negotiating?

Principles Of Marketing
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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Hi, please read the attachment and answer the questions below. I am the buyer in this negotiation. 

  1. What strategies will you be using in the negotiation? Do you want to make the opening offer?  Why or why not?
  2. What strategies do you expect to see from your counterparty? How will you prepare to meet those strategies?
  3. Given your scenario, what other information is important for you to keep in mind while negotiating?
You have recently accepted a job in a major metropolitan area, and you want to buy a house near your new job. You have selected the suburb of Sunnyvale as the best area for you and your spouse. Ideally, you would like to find a house in the $235,000 to $255,000 range. You have hired a local agent in Sunnyvale to help you identify likely prospects. Your agent has shown you and your spouse 12 properties over the past 2 months. You have also driven by several dozen additional properties with your agent. You subscribe to the local newspaper's Sunday section to keep apprised of ads for homes for sale. Many of the homes you saw with your agent had major structural wear and would be classified as "fixer-uppers." You realize that no home will be exactly what you want, and you will inevitably have to do some remodeling. However, you and your spouse have very busy work schedules and you know you will not have time to manage any major renovations, so you want to buy a house that is not going to require a lot of work from the start. On your last visit, you and your agent found one house that seemed like a reasonable prospect-1490 Maple Drive. You did not look at this house before because you insisted that your agent show you only properties listed below $250,000. You just raised this threshold, with the idea that you might negotiate a lower price. The property was by far the most suitable you have seen. The house appears to be in good condition, and it has the Victorian flavor that your spouse adores. Although the house is not as large as you had hoped, it has a great yard that will be perfect for when you have children. The house is near a good local elementary school, and a playground and tennis courts are within walking distance. There is a corner market within walking distance. A large shopping mall and supermarket are within a 10-minute drive. The problem is the price--the house is listed at $270,000. The alternative property you have in mind lists for $242,000. That property has the extra square footage you want plus an extra half bath. It has a smaller yard than the Maple Drive property and an unfinished basement, but the location is not as good and the house needs quite a bit of work. You think you could probably get this alternative for $235,000. You have decided that you would like to buy the house at 1490 Maple Drive, but you remain concerned about the price. According to your own careful calculations, your household income will allow you to obtain a loan for $230,000. You and your spouse have $30,000 in cash. However, you must factor "closing costs" into your overall budget (loan fees, costs of appraisals or inspections, etc.). These expenses routinely amount to about 3% of the sales price. If you can get another party to "share" the closing costs, you could afford to pay more for the house. Overall, your maximum outlay for the house including closing costs is $260,000. Therefore, unless you negotiate a price of $260,000 or less, you will settle on the alternative property listed at $242,000. You will use the money you will save to make the repairs needed on the alternative house and get a good start on refinishing the basement. You want your agent to bid on the house at 1490 Maple Drive. You plan to email your agent shortly to begin strategizing about this bid. Although you like your agent, to date you have not shared information regarding your financial situation and capabilities, you've simply stated that you desire a "cap" of $250,000. You must decide how much information to share with your agent with regard to your reservation price and your desire to reach a deal. Since time is getting short and the listing price is high, you have decided that you will not spend more than 2 week negotiating for the Maple Drive house. If you are not able to make a deal for the Maple Drive house in 2 weeks, you will begin negotiating the alternative property.
Transcribed Image Text:You have recently accepted a job in a major metropolitan area, and you want to buy a house near your new job. You have selected the suburb of Sunnyvale as the best area for you and your spouse. Ideally, you would like to find a house in the $235,000 to $255,000 range. You have hired a local agent in Sunnyvale to help you identify likely prospects. Your agent has shown you and your spouse 12 properties over the past 2 months. You have also driven by several dozen additional properties with your agent. You subscribe to the local newspaper's Sunday section to keep apprised of ads for homes for sale. Many of the homes you saw with your agent had major structural wear and would be classified as "fixer-uppers." You realize that no home will be exactly what you want, and you will inevitably have to do some remodeling. However, you and your spouse have very busy work schedules and you know you will not have time to manage any major renovations, so you want to buy a house that is not going to require a lot of work from the start. On your last visit, you and your agent found one house that seemed like a reasonable prospect-1490 Maple Drive. You did not look at this house before because you insisted that your agent show you only properties listed below $250,000. You just raised this threshold, with the idea that you might negotiate a lower price. The property was by far the most suitable you have seen. The house appears to be in good condition, and it has the Victorian flavor that your spouse adores. Although the house is not as large as you had hoped, it has a great yard that will be perfect for when you have children. The house is near a good local elementary school, and a playground and tennis courts are within walking distance. There is a corner market within walking distance. A large shopping mall and supermarket are within a 10-minute drive. The problem is the price--the house is listed at $270,000. The alternative property you have in mind lists for $242,000. That property has the extra square footage you want plus an extra half bath. It has a smaller yard than the Maple Drive property and an unfinished basement, but the location is not as good and the house needs quite a bit of work. You think you could probably get this alternative for $235,000. You have decided that you would like to buy the house at 1490 Maple Drive, but you remain concerned about the price. According to your own careful calculations, your household income will allow you to obtain a loan for $230,000. You and your spouse have $30,000 in cash. However, you must factor "closing costs" into your overall budget (loan fees, costs of appraisals or inspections, etc.). These expenses routinely amount to about 3% of the sales price. If you can get another party to "share" the closing costs, you could afford to pay more for the house. Overall, your maximum outlay for the house including closing costs is $260,000. Therefore, unless you negotiate a price of $260,000 or less, you will settle on the alternative property listed at $242,000. You will use the money you will save to make the repairs needed on the alternative house and get a good start on refinishing the basement. You want your agent to bid on the house at 1490 Maple Drive. You plan to email your agent shortly to begin strategizing about this bid. Although you like your agent, to date you have not shared information regarding your financial situation and capabilities, you've simply stated that you desire a "cap" of $250,000. You must decide how much information to share with your agent with regard to your reservation price and your desire to reach a deal. Since time is getting short and the listing price is high, you have decided that you will not spend more than 2 week negotiating for the Maple Drive house. If you are not able to make a deal for the Maple Drive house in 2 weeks, you will begin negotiating the alternative property.
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