The Situation: I am trying to sell my 1998 Volkswagen Jetta GL so that I can put a down payment on a new Subaru I have already agreed to buy. In fact, I am supposed to go and pick up the new Subaru tomorrow morning. If I am unable to sell my Jetta by tomorrow, I will have to borrow the money for my down payment at prime plus 5% interest. Needless to say, I would like to sell the Jetta today for no less than $4,700, which is what I need to put a down payment on the Subaru. If I am unable to sell to the party I am negotiating with, the Subaru dealer said he would buy it for $4,400, but I think I can get more than that.
Negotiation Arrangements: The buyer I am negotiating with is Carole Meriwether. We have agreed to negotiate at 6:30 pm in BAH because it is neutral territory. We both felt that it would be in our best interest to negotiate somewhere where we both felt equally comfortable.
Strategy: I am going to pursue a strategy of active-engagement. I will be as competitive as possible because I see this as a distributive bargaining situation where the more I win, the more she looses.
Planning and Preparation: I am going into the negotiation with an idea that I am going to drive a hard bargain. After researching more about the car on Consumer Reports and reading reviews, I believe that the car is worth more that $4,700, and I plan on obtaining more than that. My strategy will be to start out higher than one might expect at $7,800. After all, studies show that negotiators who have an exaggerated first offer tend to get better results. I am planning on Carole thinking this value is way to high, so I will be prepared to argue why I priced the car at that price point. Things I will mention will be the low mileage compared to age of the car, that fact that there is still 30,000 good miles left on the tires, the great fuel economy, that fact that it is mechanically perfect at this point in time, the fact that it has been locally owned (by me only) and driven, and of course that all reports point out that it is a reliable vehicle. Because of today's marketplace, I will stress the fuel economy and the reliability the most. Throughout this process, however, I will be asking Carole leading questions like, what will she be using the car for, will she be the only driver (if she has kids I will highlight the dual airbags). I expect I will have to make concessions, but I would like to get $5,400 and my resistance point will be $4,700.
Target Setting: My asking price...