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  • August 19, 2016

    Achieving Success with Interest-based Home Buying

    What happens when you apply interest-based bargaining techniques to the typically distributive process of buying a home? Michael Rust shares his experience.

    Michael D. Rust

    Buying a home is a traditionally distributive process. By this, I am referring to the “distributive bargaining” process of exchanging offers on how much money will be exchanged in favor of the transfer of title. But could an interest-based process be used? Speaking from experience, I know that it can be – and to great effect.

    When my wife and I were recently looking to move, we toured many homes. In one home, we were greeted with the typical MLS sheet, the real estate disclosure form, but then there was a third form.

    This third form was a room-by-room walking tour of the house, it was a nice idea. The thing that was remarkable was that it was written in the first person, with the house as the narrator!

    “Hello! My name is 940 (pronounced 'nine-forty'). When you come in, take off your shoes and turn left (you’ll be happy that you did).”

    This tour was remarkable. Not just for the anthropomorphism, but for the detail.

    “In the Southwest corner you’ll notice two screws in my baseboard. These are for tying up your Christmas tree to keep it from being knocked over by small children or pets.”

    Michael Rust Michael Rust, Marquette 2006, is executive director of the Winnebago Conflict Resolution Center, Inc., Oshkosh. He has focused his practice full time for nearly seven years on conflict resolution.

    Neither because of, nor in spite of, the walking tour, we fell in love with the house. It checked off every box on our “must have” list, but also nearly box on our “dream” list. It was perfect. We drafted an offer to purchase that night.

    Before we sent it, my wife (also a trained mediator) and I stopped to ask why this house had an anthropomorphic walking tour. We determined the answer was that the sellers had specific interests that were not being met by the MLS and real estate disclosure forms. But what were they?

    When we looked back through the walking tour and noted how many places referred to family and children and combined this with our research into the sellers – the answer was plain. The sellers had an interest in this home going to a family who would appreciate it.

    The sellers were the children who had grown up in this home. The parents had recently passed and the children/estate were looking to sell, and at least someone in that group was very interested in expressing to potential buyers their historically great feelings about the home – hence the walking tour.

    What did we do? When we submitted the offer to purchase, we included a letter of introduction to our family – addressed to the house. My wife loves the water and she’ll love the water access. Mosquitoes love me and the screen porch will save me a lot of scratching. Our two daughters love music and are in piano lessons, so they were thrilled at the baby grand piano in the living room. The baby on the way will love..., etc.

    Let me say that the negotiations were brief. They accepted our conditions and requests (including throwing in the piano and antique couch) and they volunteered to throw in the antique chair that matched the couch that we hadn’t included in our offer. At that point, the money was easy (and they met us more than halfway).

    Selling our other home proved to be more difficult. As we approached the end of our condition period, the sellers contacted us again – this time offering to reduce the price on the house if we reduced the asking price on the one we were selling. Not an unheard-of action, but surprising to be initiated by the seller. And, it worked.

    We have lived in the house for almost two years now (the baby who was on the way will be 2 in December) and we love it. We still refer to the house as “nine-forty.”

    I am convinced that taking the extra time to think about the sellers’ interests and to directly address them were essential in the positive resolution of that negotiation (for all parties).

    Where’s the strangest place you have successfully used your interest-based techniques?

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