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PARKER-GIBSON NEGOTIATION Confidential Instructions for the Parkers The Parkers own a house at 43 Willow Street. Fifteen years ago, they paid $20,000 for a 10,000-square foot parcel that sits between their home and the home of the Gibsons, who live at 39 Willow Street. That specific parcel is slightly less than half of the one-half acre minimum building lot size required by the local zoning. The Parkers purchased the half-lot thinking that they might someday use it for a tennis court, but they never got around to building one. They have used some of the land for a vegetable garden from time to time. Now the Parkers have decided to move out of state, having elected to take a generous early retirement package. They were lucky enough to find a private buyer for their house at 43 Willow. Because they got a good price and did not have to pay a broker fee, they are netting more than they expected. The only drawback is that the buyer is not interested in purchasing the extra parcel, seeing no real use for it. At the most, the buyer will be willing to pay an additional $15,000 (over and above the negotiated price for the house and the house lot) for the half-lot. This is less, of course, than the price the Parkers themselves paid over a decade ago (which was $20,000), but lacking other bidders, they would accept this $15,000 offer. It would make no sense to hang on to this land once they live thousands of miles away. Before swallowing this loss, however, the Parkers have tried to see if they could do better by approaching their neighbors whose houses abut the half-lot and who might have some use for it. Neither the people to the north nor to the south have any interest, so their last hope is the Gibsons, who live immediately to the west. As it happens, when the Parkers first acquired the parcel, they had asked the Gibsons if they wanted to buy it jointly, but the Gibsons declined. There is no animosity between the families, but they have had little contact over the years. The Gibsons may not be any more interested in the land now than they were fifteen years ago, but the Parkers feel there is no harm in asking. Perhaps they might be persuaded of the value in adding yard space or getting a bit of a buffer between them and their new neighbors. 1. In this negotiation, you are to assume the role of one of the Parkers – or, if you are more comfortable, that of a representative fully authorized to act on their behalf (like a realtor). 2. Your goal is to sell the vacant parcel for as much as possible. Any deal you make with the Gibsons must be more than the $15,000 offer that you already have. You should regard the $15,000 as an absolute minimum. Try hard to do much better. Remember that you paid $5,000 more for it, and have had upkeep and taxes through the years. 3. It is true that real estate values fell generally over the last decade (at the time this case was written), but have rebounded somewhat in recent years. That fact provides little help here, however, as this is a unique piece of property. There really is no fair market value for it. 4. You are only interested in a straight cash deal. Do not complicate matters by arranging seller financing, reserving special easements, or introducing other issues or options. 5. Here’s what the properties look like (forgive my bad drawing!): Parker Gibson Half-Lot