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Negotiation

By Peter P follow Peter P   2007 Mar 22, 2:02pm 16,926 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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241   e   ignore (0)   2007 Mar 24, 3:37am     ↓ dislike (1)   quote   flag        

>You should see what FosterCity looked liked before its development.

Um, what did Foster City look like? I thought it simply didn't exist.

So where are the safe places to live? Other than.... Belmont I guess.

242   astrid   ignore (0)   2007 Mar 24, 3:39am     ↓ dislike (1)   quote   flag        

Malcolm,

Yeah, we're in agreement.

I think there are intelligent and able baby boomers out there, it's just that most of them are running their own businesses, doing consulting, (worst case scenario) working on their 6th frustrating dead end job in 10 years, or drop out of the workplace altogether.

243   DaBoss   ignore (0)   2007 Mar 24, 3:39am     ↓ dislike (0)   quote   flag        

Astraid

I did work for a well funded start up that was run very conservatively.
We did well 100% year over year growth. The youngest was 35 yo.
Lots of experience never hurts. When managment were to turn over every 3 years that would cause chaos an low morale.

244   DaBoss   ignore (0)   2007 Mar 24, 3:42am     ↓ dislike (0)   quote   flag        

eburbed-
You "guess" ? Dont you know?

245   astrid   ignore (0)   2007 Mar 24, 3:44am     ↓ dislike (0)   quote   flag        

Space Ace,

I agree that experience (as opposed to time punching) is critical for a company's wellbeing. I was just trying to say that staying in a well runned company for the long haul is so exceptional now, that people who do so almost appear as aberrants.

246   DaBoss   ignore (0)   2007 Mar 24, 3:46am     ↓ dislike (1)   quote   flag        

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

247   Malcolm   ignore (1)   2007 Mar 24, 3:49am     ↓ dislike (1)   quote   flag        

if their current job is suitable (since job change is a high risk, high cost activity for everyone involved) but regular job changes is becoming the norm.

One of my favorite bosses told me a smart employee is always passively looking at career options because it is an unpredictable world. Since I believe this to be true, for fun I'll challenge your point although I do recognize that is a very general unencompassing good rule of thumb. The reason I think at all levels job change is healthy for the individual and the general economy is that a great deal of knowledge transfers around. (I'm not referring to IP) I think when an individual changes a job it is a reality check on changing times, and often he/she will add skillsets to get a new job. It basically forces people to update instead of just sitting around hoping for a promotion with even less responsibility. The longer someone becomes idle in a job the more a change is detrimental and they can't control changes like disruptive technologies which can obsolete entire industries. Like I said on a prior thread, look at engineers, software engineers, realtors, lawyers, accountants, typesetters all of these were very good professions which are/have been severely impacted by economic and technological change. Blue collar guys are now making more than these white collar glamor type jobs because the market has correctly revalued their services mainly with the internet, and software innovations.

248   astrid   ignore (0)   2007 Mar 24, 3:51am     ↓ dislike (0)   quote   flag        

Space Ace,

I think that can be the case, but plenty of men in management are clueless, petty assholes. They just show their color more slowly. But good women bosses do exist, just like good women professors...they just tend to be rarer.

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.

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