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Negotiation

By Peter P follow Peter P   2007 Mar 22, 2:02pm 16,781 views   288 comments   watch   nsfw   quote   share    


Let's talk about negotiation. When it is time to make your home-buying offer, how will you approach the game? What techniques will you use? What will you do to close the deal in your favor?

Some say that win-win is not only possible, it is preferable. However, when it comes to a financial transaction, it is hard for everyone to be happy realistically. Someone must lose something. Or that someone must not have full information. Or that someone is self-delusional. What is your take on this?

What are the best ways to breakdown your opponents within the bounds of law? What mind games are the best?

Be creative! But please respect the law.

Peter P

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249   astrid   ignore (0)   2007 Mar 24, 3:52am     ↓ dislike (0)   quote   flag        

Malcolm, I've been trying to tell my boyfriend that for the last five years.

Well, now he's no longer employed, maybe I'll finally get my point across.

250   DaBoss   ignore (0)   2007 Mar 24, 3:53am     ↓ dislike (1)   quote   flag        

sorry astrid.. never saw one and I have been around.

251   Malcolm   ignore (1)   2007 Mar 24, 3:54am     ↓ dislike (0)   quote   flag        

I had an excellent female boss at my last job, but even she was overly emotional and didn't want to hear that things could run smoother. I do think she had fallen into that security trap but she was in my opinion confident enough that she would get a new job if she wasn't happy.

252   astrid   ignore (0)   2007 Mar 24, 3:56am     ↓ dislike (0)   quote   flag        

Space Ace,

I don't trust the kindness of others, especially when the others are a multinational corporation and an ever changing cast of supervisors with their own agendas. It really helps to make decisions knowing what else is out there, just to balance things.

253   astrid   ignore (0)   2007 Mar 24, 3:58am     ↓ dislike (1)   quote   flag        

My current boss is a woman and she is fantastic - forward thinking, able to deal with the big picture and still pay attention to details, not overly emotional, able to play office politics but not mired in it.

254   Malcolm   ignore (1)   2007 Mar 24, 3:59am     ↓ dislike (1)   quote   flag        

He is a part of a growing trend also. I heard a stat somewhere that 1 in 6 men don't work by choice. I consider myself self employed since I make more than I ever did working for someone else, but more and more guys (I'd include myself here) look at their horrible daily corporate job, then look into the future by reflecting on one of those old timers there, and we literally feel our life dreams vanishing. That's why I went and got my master's in entrepreneurship. Now I have the security of being in demand, but the flexibility of probing different areas to find my true calling.

255   Malcolm   ignore (1)   2007 Mar 24, 4:00am     ↓ dislike (0)   quote   flag        

I would also give my last female boss and solid A for professionalism.

256   astrid   ignore (0)   2007 Mar 24, 4:04am     ↓ dislike (1)   quote   flag        

Nah, he could get another job easily enough, though right now he doesn't know what he wants to do.

He really liked his old job and that's why he stuck around despite subpar pay for his responsibilities. Then all of a sudden he was let go - bah bye, don't let the door hit you on your way out. He was a fool to think his company would be there for him and not keep an eye out for other possibilities.

257   astrid   ignore (0)   2007 Mar 24, 4:09am     ↓ dislike (0)   quote   flag        

help,

DUDE! u r entitled 2 post but u r not entitled to an on point response

PS - I'm really glad you're not my boss.

258   DaBoss   ignore (0)   2007 Mar 24, 4:27am     ↓ dislike (0)   quote   flag        

Always get an attorney

259   DaBoss   ignore (0)   2007 Mar 24, 4:32am     ↓ dislike (0)   quote   flag        

my former head of department and co founders were ex military. One was a vietnam vet. Politics in the workplace? Hah! He carve you up with one glare and not a single word, sometimes he would say ... You have your orders and walked wasy. He kept people straigth focused and moving forward. We all respected this guy. We need more of his kind.

260   Malcolm   ignore (1)   2007 Mar 24, 4:39am     ↓ dislike (1)   quote   flag        

Help:
Ask if they will lower the price more if you DIY.
If there is no benefit get a good agent. Ask your friends if they know a good one.

For both you can refer back to the board for advice. If you DIY we can guide you as far as the norms for insurance, escrow and title costs, and who pays for what.

261   Malcolm   ignore (1)   2007 Mar 24, 4:45am     ↓ dislike (1)   quote   flag        

Space, I surprisingly get along well with that type of individual. I'm not surprised you guys respected him.

262   astrid   ignore (0)   2007 Mar 24, 5:02am     ↓ dislike (1)   quote   flag        

"MY WIFE AND I ARE LOOKING AT A SPEC HOME"

What the am I supposed to draw from that?

Once again, I'm very glad you're not my boss or underling or coworker.

263   Malcolm   ignore (1)   2007 Mar 24, 5:17am     ↓ dislike (0)   quote   flag        

Very funny observation Astrid.

264   Malcolm   ignore (1)   2007 Mar 24, 5:36am     ↓ dislike (1)   quote   flag        

1.65 in 2010.
Given your projections someone should wait well beyond 2010 since prices are 2-3x comparatively. The whole bubble point is that the prices are well above the normal growth line.

265   Malcolm   ignore (1)   2007 Mar 24, 5:42am     ↓ dislike (0)   quote   flag        

With all respect, why do non-bubble believers use the historical trend to make the long term argument for safety but then ignore the same trendline when people point out how horribly disconnected the current over the projected trend line is?
Given an individual who has not already purchased, can there be an argument in favor of buying at the present time, verses waiting for the current to fall to or below that trend line?

266   Bruce   ignore (0)   2007 Mar 24, 6:17am     ↓ dislike (0)   quote   flag        

I think TOS just proposed the cost of ownership for someone who purchased in 1999, 2005, 2010 not the baseline value of homes plus inflation for the period.

The costs of a sale early in the life of an amortized loan have been pointed out here before, but that's not a rebuttal to Case-Schiller really. What did I miss here?

267   skibum   ignore (0)   2007 Mar 24, 6:39am     ↓ dislike (1)   quote   flag        

HELP,

Here's some HELP: learn how to turn off CAPS LOCK.

268   Randy H   ignore (0)   2007 Mar 24, 6:42am     ↓ dislike (0)   quote   flag        

Women in managment suck. They are too political and totally clueless.
They way over complicate matters.

sorry astrid.. never saw one and I have been around.

If you are an accountant with a Big-8/6/5/4 background who has not seen any competent women management then the first place to begin exploring this quandary is in your own mirror. Neither sex has a monopoly on good or bad management skills. Equally, there is no shortage of employees for whom all management will always never be good enough.

269   DaBoss   ignore (0)   2007 Mar 24, 7:08am     ↓ dislike (0)   quote   flag        

TOS is on the right track.
My reinvestment back into the stock market
using the same logic also predicted the bottom.
Im sitting pretty! You got my support TOS
Regression to the mean!

270   DaBoss   ignore (0)   2007 Mar 24, 7:11am     ↓ dislike (1)   quote   flag        

Randy -
Discipline is the key. Im talking about some employers in the valley both in F500 and startup. Women are pretty horrible in management.

271   Randy H   ignore (0)   2007 Mar 24, 7:44am     ↓ dislike (0)   quote   flag        

New Thread. Coldwell Banker becomes first Realtor of “Virtual Real Estate”

272   Bruce   ignore (0)   2007 Mar 24, 8:19am     ↓ dislike (0)   quote   flag        

theotherside:

Appreciate your patience. I do see the methodology now.

A question: The salary and home valuation figures for 1999 - what do they represent? Average or median for the country at large? Or some specific location?

Since the results flow from this basis, it would be useful to know what these reflect.

273   Bruce   ignore (0)   2007 Mar 24, 8:25am     ↓ dislike (0)   quote   flag        

Correction - I see it is based on (net?) income of $160,000 and that all is calculated from there. What is this figure?

274   Randy H   ignore (0)   2007 Mar 24, 9:16am     ↓ dislike (0)   quote   flag        

tOs

We're still misrepresenting the MIT paper, ignoring the other half dozen papers I pointed you too, including those also contributed to by MIT that draw different affordability conclusions? Well, at least we're not properly counting all alternative uses in our opportunity costs either.

There is an affodability crises. Or did you think subprimes resulted from bored bond traders? 'Haps you should spend a bit of time in the middle part of the country, around where I grew up. Many houses still cost barely $100K. People have a tremendously hard time affording payments on traditional loans nonetheless.

275   Bruce   ignore (0)   2007 Mar 24, 9:40am     ↓ dislike (0)   quote   flag        

Thanks, Randy. I see it's one haha.

But I fell for it.

276   DaBoss   ignore (0)   2007 Mar 24, 12:08pm     ↓ dislike (1)   quote   flag        

DogBoy said...
"The reason why the housing market will never crash here? "

But we had crashes before in early 1970s, 80s and 90s. As much as 35-40% by 1991 and then we went flat to 97. It had nothing to do with the an earthquake. It had everything to do with local industries and global competition. There is a reason we can no longer manufacture semiconductors/ PCs or anything else in SV. R&D was a sacred cow back in 1980s but now that is no longer the case.

You can even go out further back when many left SF for the suburbs in the 1950s and 1960s.

277   DaBoss   ignore (0)   2007 Mar 24, 12:20pm     ↓ dislike (1)   quote   flag        

"Bruce question: The salary and home valuation figures for 1999 - what do they represent?"

1999 represented insane salary. Drunken with lots of VC funding many employers burned and hire beyond their means. Many known and unknown companies over hired and overspent on many things. Cisco had this plan of HQ in South San Jose in Gonzales which would house 100,000 employees.

The new economy and growth envisioned was abandoned. As it did back in 1985 bust in SV.

Salaries were corrected by riffs and salary cuts for years down the road.
Facilities were abandoned and future lease payments were expensed in to earnings. Landlords of R&D space was rerented at $1/sq ft vs 3 in 2000.
Many employers went under or were sold.

Many employers were valued on huge specualtive revenues in 1999 that never materialized. It was all a dream between 1998 to 2002. None of the plans for the future came true.

278   Malcolm   ignore (1)   2007 Mar 24, 1:11pm     ↓ dislike (0)   quote   flag        

TOS
Bottom Line:
1- This approach suggests that prices in 2007 should be roughly 10% lower (492,000/ 544,000) than prices in 2005
2- But prices in 2007 should be roughly 39% higher than prices in 1999 (492,000/355,000)
3- i.e. 1 in 1999, 1.53 in 2005, 1.39 in 2007 and 1.65 in 2010
Conclusion: 10% drop corresponds roughly to what has been observed so the methodology is not completely off base…

I will look closely at what you are saying. You may be using national figures which could support your point on a macro level. My reference of course is my own back yard of San Diego Co. The bubble does not just look like a 20% blip, it is a classic hockey stick. To give you an example of a home run, in 1998 I bought a house for 132K. In 2004 I sold it for $440K. It is now a bank owned house that has been for sale for 1 and a half years. In 6 years it tripled. Using 5% compounding the rule of 72 says it should have taken 14 years to double. That house will have to drop to less than 200K to be back on trend now or it can stay for sale til 2018 when prices should catch up to it.

The only part that I don't agree with is your statement that 1999 was a weak year for housing. Housing here anyway recovered in 1996, and stayed very consistent through 2001, and then went absolutely crazy.

279   DaBoss   ignore (0)   2007 Mar 24, 1:22pm     ↓ dislike (1)   quote   flag        

Malcolm- in SD yes you may be right. In southbay SF Bay It would be 50% correction using local numbers Sq Ft... Typical Sq ft in 1997 was 100/sq ft this is backed up with Zillow/Domania numbers. Today we are at 350-400/sq ft if not higher.

280   Malcolm   ignore (1)   2007 Mar 24, 1:38pm     ↓ dislike (0)   quote   flag        

Space, for both areas that sounds about right to me. I think nationally 10-20% is realistic and I think that is TOS's point. That kind of correction is still going to be really detrimental, but here in CA I think we can literally expect to see decimation of current owners. My gut has always said 40% drop in San Diego I just don't know how steep or shallow that adjustment in present dollars will translate out.

Nationally or locally why would someone buy when even the opposing point of view concedes at least a 10% drop. Why not wait for it, verses jumping in just to be behind the ball. Save the money by renting now, put the difference away and you will be ahead of the game when it is time to buy.

281   DaBoss   ignore (0)   2007 Mar 24, 2:03pm     ↓ dislike (1)   quote   flag        

Malcolm, I think you will be much safer in SD then many in the BA.
SD may have less of a correction than BA, not as deep as the north.

There are people that dont believe in the bubble and they never saw downturns and dont understand how or why they happen.
They are not stupid people, infact very educated, just jaded!
Many are from other parts of the nation so they expect to pay higher
prices. They are so brainwashed by realtors... they are beyond reasonable repair. A deep correction will be nice 'shock treatment' for them.

282   Malcolm   ignore (1)   2007 Mar 24, 3:33pm     ↓ dislike (1)   quote   flag        

if rates in 1998 were in the 10% …

For your future reference, the rate was 7% pretty much standard. 30 year fixed rate.

Your timing of 2009/10 is right in line with my thinking.

283   Malcolm   ignore (1)   2007 Mar 24, 3:42pm     ↓ dislike (1)   quote   flag        

Space, that's an interesting notion, but I see the opposite. San Fransisco has consistently been more expensive than San Diego, and you guys up there have a severe space shortage. As depressing as all the development has been we still have lots of space to build.

284   DaBoss   ignore (0)   2007 Mar 24, 4:11pm     ↓ dislike (0)   quote   flag        

SF yes... but the city has had more construction over the past few years now..
Lots of towers going up and new develpment in many pockets of the city., I t was surpising to me as well.

South Bay - not the same story since there is plenty of land and rezoning very easy since we have so many vacant commerical land since 2000. Where you had Anti-Growth city ordiances now development is welcomed.

As I recall Socal is the one with more expensive homes... infact I recall reading how NoCal cities surpassing prices in 2001-02 from CAR web site.

I must say San Diego would be much nicer than Palo Alto... or even Santa Barbara better than places here .... yet prices did surpass without much real reason.... I mean were do I park my yaht??? We dont even have a Ferrari store around here...

285   ozajh   ignore (0)   2007 Mar 24, 9:56pm     ↓ dislike (1)   quote   flag        

Malcolm,

In case you didn't know, 'the city' in Different Sean's case is Sydney, Australia.

286   Malcolm   ignore (1)   2007 Mar 25, 12:59pm     ↓ dislike (1)   quote   flag        

I was in Tijuana a few weeks ago, and I can tell you, that is a city on the verge of a famine if there is any disruption to their water. That is absolutely a disaster waiting to happen. Their infrastructure is literally at the breaking point.

Thanks for the update on Pt Loma, nice to talk to someone who knows of what they speak. The EPA had given San Diego a waiver on the untreated sewage because it goes quite far out but I guess you have done some current research on the issue. I don't share your concern on the aquaduct. I don't really know how you can do more than disrupt it with anything smaller than a nuke. I would think no terrorist damage could do more than a week's worth of work to one of those. They are actually pretty amazing structures. Miramar, Lake Hodges, and San Vicente can easily sustain us for months on their own with drastic rationing.

I do agree on a desal plant. I'm surprised we don't just build one next to San Onofre but I suspect there already is one there for the base. In any case, it is the logical way to go, and when it is all done it would shut a lot of people up. I'm a little tired of constantly living with some political crisis like we are going to run out of water.

287   astrid   ignore (0)   2007 Mar 25, 5:23pm     ↓ dislike (1)   quote   flag        

Everybody in CA is stealing water from the ocean.

288   DaBoss   ignore (0)   2007 Mar 27, 9:49am     ↓ dislike (0)   quote   flag        

What percentage of asking price qualifies an offer as a “lowball?”

=

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