12 Goats, 2 Chickens and A Camel

Many years ago, as my older sister was preparing to be married, a friend of hers and I negotiated her wedding contract.

Her husband to be was Jewish, and traditionally, jewish weddings come with a Ketubah, or contract. Ketubahs were actually the first contracts that spelled out a woman's rights in a marriage. A fairly profound idea at the time, that women had rights.

So these contracts were originally typically negotiated in livestock. After some haggling, we came up with the right price - 12 goats, 2 chickens, and a camel.

I'm fairly glad I never had to pay up. I'm still not sure where exactly one finds a camel in the Boston area. Stealing from circuses was never my style, and after that I ran out of ideas.

What drove the negotiations was the perception of value - and to be honest, lots of liquor on the negotiators part - of the commodity that was being contracted for. In this case, I think my sister is well worth quite a bit of livestock. I'm sure I'll get hit for that later.

But regardless, we negotiated not based on what other brides had traded for, but what the perceived worth of THIS bride was.

And I believe that it's a good approach to carry forward in your life. For example, we're in a slightly fuzzy housing market now. Prices are down, but loans are harder to come by. Sellers are afraid to lose money, buyers don't want to buy too high.

So they look at 'comps' or comparable prices. I think that's a great idea. Fabulous. Good to know what your market is. But it isn't all the picture, and perhaps it's not even most of the picture. There is this ephemereal thing in negotiations that is much more emotion than it is fact or deliberation. And that is where the room to wiggle comes in.

When we bought our house, the market was slowing. We signed our purchase and sale agreement in January of 2007. Things were coming down, but sellers still expected a spring boom, not unlike they hope for now.

We offered not quite 20% below asking. And the price had been reduced once already.

When we did this, we knew the seller had several options:

• Walk away from our offer
• Counter
• Accept

She could have gotten offended, and walked. It was an awfully low offer.
But she countered, we countered back, and we ended up with a significantly reduced price.

Before we started the offer process, we set our 'walking away amount'. As in: if this house won't go to less than x, we're walking away.

We love the house. We're thrilled to live there. But we were willing to turn our backs. Because ultimately, this wasn't about her feelings or ours. It was a business deal. She wanted out, as the house had become too much for her to maintain. We wanted in. The house had been on the market for a while. It would sell, that was sure - the question was when.

And when was important to our seller.

We didn't know that, but we thought it might be. We took a risk, and negotiated based on what we thought the house was worth to us, rather than what the comps told us. And we came out with a deal that made everyone happy.

Now, I think it's important to be realistic. We had a strong sense of our market.
But we gambled - because we were willing to lose. And I think that is important when plunking down money.

You have to know what your walking away point is. You have to know what you are willing to do to get what you want. And you just might want to look at perceived value as well as the 'comps' on what you are buying. Because I guarantee you, the deal is out there. You just have to be willing to be dissapointed.

And you have to try to find the set point that makes everyone feel like they won. There's a little wiggle room in business deals, all kinds of business deals. You just have to look for an opening, and know your hand. And belive in what you are doing.

Look for the opening, the negotiating point. And make a plan.

Oh, and if you come across a camel, let me know. I still haven't paid up.