Instructions (Tracy)

1. Read the confidential information for only one of the two roles. Do not read the
other role until after you have completed the negotiation.
2. Do not discuss your role with anyone and do not disclose any confidential
information in the Discussion Forums.
3. If you are negotiating with someone you met online during the course, exchange
email addresses so that you can provide feedback after watching the final videos.
See ## 10 and 11 below.
4. Read your role carefully so that you understand the facts before you begin
negotiating.
5. Act out your role. Do not say that "The role says that I am supposed to do this."
Just do it!
6. You can add facts, if they do not change any facts in your role.
7. There is a 30-minute time limit for the negotiation. This does not include time spent
at the beginning getting to know the other side. Stop negotiating after 30 minutes,
even if you are not successful.
8. [Optional] After you reach agreement, you can disclose the confidential information
from your roles to each other. Given this information, try to improve the results in a
way that benefits both sides. Do not post these improved results in the Survey (#9).
9. Both you and the other side should now post your results separately using the
Negotiation Exercise Results Survey under Exercises. You must post these results
and successfully complete the final examination to receive a course Certificate.
PLEASE NOTE: When you finish the survey you will receive a Feedback page.
Ignore this page.
10. After you post your results, watch the final (Unit 5) videos, which last one hour.
11. After you watch the videos, provide feedback to the other side and complete your
own self-assessment, using the document Self-Assessment and Feedback for the
Other Side, which is posted under Exercises. Do not read this document before
you negotiate. Use this information to prepare a plan for improving your negotiation
skills.
12. After you provide feedback, you are ready to complete the course by taking the final
examination before midnight on November 30. Good luck!

Copyright 2014 by George J. Siedel. All rights reserved.

Common Information

This is a negotiation between Tracy and Pat for the sale of a beautiful, old
Victorian house with wood siding on a large lot in a residential neighborhood.

The house needs expensive repairs.

The seller and neighbors have a strong interest in preserving the house and the
neighborhood.

The last sale in the neighborhood was 6 years ago when a similar house (but
well-maintained) sold for 135,000. Property values have increased considerably
since then.

The property has a tax assessment of 140,000, but tax assessments are usually
well below actual market value.

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
wood 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:
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 or
replace the wood 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 him
when 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.

Residential

Elm Street

Oak Street
A

Main Street

Commercial

C
Best Tacos