Guide To Seattle Real Estate

Batboy who!? No not batboy, your BATNA.  Best Alternative To No Agreement (BATNA.)  The concept was originally created by Roger Fisher and William Ury, Getting to Yes: Negotiating Agreement Without Giving In.  Before you begin the real estate negotiation process you need to know at what point you will walk away, also known as your reservation price or set point.

Basically what it comes down to is this.  How much do you want this house or sale as it may be. What would your next best choice be if not this house.  If you have to have a specific piece of real estate and no other will do, then you really have no business negotiating hardball style. Would you really want to risk losing  the home of your dreams. If it is a toss up between two or more homes then ask yourself ,what price would tip the balancing point between the two homes?  This would be your BATNA.  Let look at an example:

Joe and Jane would like to live near the Alaska Junction in West Seattle.  They have found a great town house for 430k and a rambler for 475k.  The town home is brand new, granite and stainless everywhere. While the rambler was built in 1950, linoleum and wall to wall carpet but a nice yard.  Joe and Jane would like to have a yard for their future children to play in, so the rambler is their first choice.  But money doesn’t grow on trees, how much is that yard really worth?  They decide that having a yard is worth 70k.  So their BATNA is: The town home + 70k = 500k.

So, at what price would the town home  be a better deal? They figure that they will have to pay for about 45k in remodeling to raise the rambler to a level in which they would want to live in it.  That brings the total price to 520k. So if they can negotiate the purchase of the rambler with the additions for under 500k they are a go. 

That means that their reservation price is 455k.  If they aren’t able to talk the sellers down to 455k, then they will buy the town home and enjoy the granite and stainless while taking the children to the park:)

Stay tuned for more as we discuss what this looks like from the Sellers point of view.