Our home purchase was by far the
most difficult negotiating experience of my life. For the last five years my wife and I had
been planning the purchase of our first home.
We weighed the pros and cons of buying an existing home versus purchasing
a new construction. We ultimately
decided to buy a new construction home.
The first thing I did was research.
Then, I researched some more. And
after that, I researched again! Being
that this would be one the biggest (and one of the most important) decisions we
would make in our lives, I wanted us to be as prepared as possible. I am a big fan of Clark Howard’s financial
advice. I went to his website (and many
more) for advice. Next, I hopped into my
car along with my bike and I went to all of the different neighborhoods we were
interested in. I talked to the
neighbors. I asked them what their
experiences were like in these neighborhoods, how they liked their builder, and
how they enjoyed living in those communities.
I looked at the quality of the neighboring school districts and took
into account the locations based on where my wife and I worked. After about a year of researching builders
and communities we settled on one. That’s
is when the fun (insert sarcastic tone) began.
Mike was our sales
representative. He was as lively as they
come, with over 20 years of experience in new construction sales. When I first met him he was very
charismatic. He was confident they could
build our dream home and assured me we had the right builder. We set up a first meeting and my wife and I
came in, gave him our budget, and looked at models. Things actually moved really fast and before
long we were under contract. This is
when things took a bad turn. We had
already been to the design studio and picked our finishes, chose our
landscaping package, and exterior colors.
The only thing we were waiting on was the building permit to be
approved. Two weeks went by and we
touched base with Mike. “It will be next
week”, then another week went by “I haven’t heard yet but we should have it
soon” Mike said. I stopped by the office
and confronted Mike. While we were
waiting this whole time two other properties which were sold after ours, began
construction. “Your home is too big to
fit on the lot by inches” Mike conceded.
A home must fit inside of a “building envelope” on a property. Ours did not.
He explained that they had applied for a variance through the city and
that was the hold up. Mike had deceived us
this whole time. Why would he lie to
us? Hoch & Kunreuther (2001) wrote “While
the benefits of deception are often apparent, assessing the expected costs of
deception is more complicated. First, a
negotiator must estimate the probability that the deception will be detected”
(p. 191). This was Mike’s gamble. He figured if he could continue to string us
along maybe the variance would be issued and he would save his sale. In the meantime, I thought it would be best
for us to have a plan B just in case the city denied our variance. Mike said no need but I insisted. We came the following weekend and looked at a
new lot on a cul-de-sac. It came with a
premium but I was not going to pay it because they sold us a lot that our house
did not fit on. The song and dance
continued with Mike saying they were waiting to hear from the city. I confronted him again. It had been a month with no word and we were
not happy at the level of service we were getting. I noticed this time that Mike was very
defensive, he avoided eye contact with me, and his voice was shaky. He said the city would not be granting a
variance because if they did it for us they would have to do for everyone. I was beyond mad for being lied to but we
really wanted to live in this neighborhood.
He offered me a pick of three other lots that we were not interested
in. Each came with a premium of $5000
which they were willing to waive. The
cul-de-sac which we wanted came with a $7000 premium and they were not willing
to waive the fee on that lot. I
countered and said if they were willing to give us $5K towards a lot we didn’t
want why not apply that amount to the lot we did want and we would pay the
balance of $2K. I felt this was a fair
compromise. Mike said he had to talk to
his manager. So we waited. A week went by and so did our deadline to
hear from Mike. I called and finally reached
Mike. I told him how disappointed we
were with our experience and that it had taken such a bad turn. I pointed out that he never called us like he
said he would. He then tried to tell me
that he was wrong about the premium price for the lot we wanted and that it
would be an extra $20,000 if we wanted the lot.
I told him flat out no and we would be cancelling our contract. I was ready to walk. We had had enough. This was a very difficult decision to come to
because my wife was now emotionally invested in this home. She already saw us raising our family
there. If I didn’t do something we would
be taken advantage of. “Understanding
the impact of reputation on future negotiations can help managers select the
appropriate trade-offs between choosing tactics this time and developing their
reputations in the future” (Hoch & Kunreuther, 2001, p. 186). I marched into the office on the following
business day with a typed letter of cancellation and requested our deposit back. The other sales person was in the office
(Mike’s mother passed and he left for TX).
She apologized for what was happening and understood why we were so
upset. Miraculously, now that I had a
letter of cancellation in my hand, she was able to reach her manager (which
Mike said he was unable to do, the manager had to approve the terms). She said they needed one more day. We would have a decision by 3PM the next
day. The manager honored the original $7K
premium price, applied the $5K to our new lot and we paid the difference. Everybody was happy.
What this experience taught me was to have everything in writing. After we started to have difficulties with Mike I refused to speak with him over the phone. I explained that I preferred to have all our communications in writing moving forward. Liddle (2013) wrote “You’ll never know when or if you will need to dig in those files, but just to be sure, secure these documents. Words uttered can never be taken back, but what is in writing will always be something to look back on if needed” (para. 4). We still had to work with Mike so we kept everything professional. Things sort of fell into place once we learned his mom had passed. It turns out she had been in failing health and the stress was affecting his work. We did not hold this against him. You never know what is happening in people’s lives, so another take away from this experience was not to pass judgment so soon on others. You never know what they might be going through. It all worked out in the end and we got our dream home. Negotiating can be difficult but if you are willing to do the work, be prepared, and not afraid to walk away, you can be successful and gain valuable experience in negotiating.
Hoch, S. J., & Kunreuther, H.
C. (2005). Wharton on making decisions. Hoboken, NJ: John Wiley &
Sons Inc.
Liddle, J. (2013). Always get
EVERYTHING in Writing! - Startup Daily. Retrieved from http://www.startupdaily.net/2013/01/always-get-everything-in-writing/
No comments:
Post a Comment