An Ohio resident is trying to sell her house for which she had paid $540,000 two years
ago. Though she is ready to sell it at the original price, research into the market value
tells her that a house of similar size in Ohio is worth $580,000 at this time. The house is
in unrepaired condition and the estimated repair charge is $125,000. She has tried
unsuccessfully to sell the house five times over and is moving for good to St. John’s to
live with her ailing mother at the end of the month, where she plans to buy a
comparable property for $ 385,000. She wants to pay for the property at St. John’s
immediately and does not have any other sources of finance. There are a few buyers
who have shown interest in the Ohio home. Which of the following options can solve
her problem and can lead to a win-win agreement between the parties?
A) Buyer A agrees to pay $580,000. However, as the amount is large, he agrees to pay
the amount over three years in installments.
B) Buyer B is willing to pay $ 540,000, which is the market price rather than the
original price, in installments over two years.
C) Buyer C agrees to pay $ 500,000 but says he will deduct the repair charges from the
amount.
D) Buyer D says that he can’t pay more than $ 400,000, as he has limited funds, but is
ready to close the deal quickly.
The final settlement of a negotiation will fall somewhere ________.
A) above the buyer’s target point and below the seller’s reservation point