Bullard Houses - Negotiation

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pay (on the lower side). But since the future use was not disclosed, it was way lower than what a commercial developer would have paid. The seller set he anchor at around $35 million, which was way above our reservation price.

I discussed about the nature of other offers that the seller had, and at that point they said they had offers in the order of $35 million. I later found out that that was a not the sellers real BATNA! I took up the aspect of how the money would be paid for other deal, as I my client was ready to pay cash.

This got them to lower the offer and come down to $25 million and I had come up to $20 million. I could see that we are converging towards a point, though I wasn’t sure what the reservation point of the seller is.

At this point the seller brought up a clause of having one house available for the owner. This was sort of regression on the progress we had made. We went back on the conditions above and I raise my offer to $22 million and no constraints attached.

We finally settled on $22.5 million and had a deal, with no constraints on future use.

I think the important aspects that came out of this negotiation were:

1. We should avoid deceiving the other party. This is illegal and can null and void the contract in the future.

2. When either party makes an offer, it gives some information about where the limits are.

3. If there is an obligation from one party to conceal information it is OK to say that, instead of lying or coming up with a false story.

4. Never lie about your BATNA

5. You do not need to reveal your reservation price.

6. For the first offer: The bigger offer, the better you do when selling and vice versa. Make your first offer.

7. We need to actively listen in the negotiation and understand what the other party rally wants.