Ethics and trust in negotiations in this case study.

drawing on relevant theory of ethics discuss what strategies and tactics of negotiatons where used

e.g.

Ethical standards are typically based on

• Consequences e.g.is it okay to lie if the good minimizes harm
• Duties - focuses on means e.g. It is never ok to lie
• Community expectations - determined by social/cultural/organisationsorms/acceptability

You and your partner are in the market to purchase your first home. Together you have saved $150,000 and have successfully applied for a $600,000 loan, bringing your total budget to $750,000. Of course, you would like to spend less than this to minimise your debt, and to allow money for additional expenses associated with moving into a new property (e.g. potentially new furniture, potentially redecorating elements such as curtains, paint, rugs, plants, and anything unforeseen). You have identified an area that best meets your requirements: there is good public transport access with a train line (40 minute express service into the city, where you work) and bus routes, proximity to nature in the form of a state park, government schools with reasonable reputations (you plan to have children in the next few years), and current sale prices that could sit within your budget. You have researched recent sales in the area and, although house prices have been around $900,000, some townhouses have sold for closer to $700,000. Sections of the suburb are known as the 'old town'; with houses mostly built between the 1920s-1960s and on quarter-acre blocks, while the 'new town' consists of farmland rezoned for residential development and built up in the last 15 years. These houses are on much smaller lots of land, are further from the train station, and are more affordable and numerous. You attended the auction for one townhouse that was perfect for your needs. It was just 2 years old, had 4 bedrooms, was in an excellent location close to the old town, and the courtyard was bigger than most. Unfortunately, it told for $850,000; well above your budget. A few weeks later and you inspected another townhouse. It was not as well-positioned but still acceptable, had 3 bedrooms (adequate for your needs and plans) and was 5 years old. You spent a week discussing the property with your partner and eventually decided to make a private offer of $740,000. Unfortunately, however, the sellers had in the meantime received and accepted another offer of $748,000. You were upset about being outbid by an offer that you could have matched. You are now looking at a third property: Another townhouse, and again for private sale. The ad lists the property as follows: 3 bedroom, 2 bathroom, 2 story townhouse. Double lock up garage plus storage. All bedrooms complete with built-in wardrobes and ceiling fans. Generous master bedroom with ensuite, includes rain-head shower, bath, vanity and floor-to-ceiling tiles. Light filled open plan living and dining, spilling onto a private courtyard with desirable north facing orientation. Timber floors and air conditioning throughout. Kitchen offering stainless steel appliances, including dishwasher, timber fronted cabinetry/pantry and breakfast bar. Walking distance to buses, childcare and primary school, and convenient access to local shopping precincts. Short drive to train station (40-minute express service to city), secondary college, and stunning state park ideal for hiking and relaxation. It is a Saturday morning and you and your partner have just inspected the property. You looked everything over very carefully and overall you are pleased with what you see. The house features listed in the advertisement leave something to be desired, but for this price range and in these new estates, all of this is all to be expected. For example, the quality of the timber used in the kitchen cabinetry is far from high-end. Likewise with the fixtures throughout (door handles, taps, window latches, etc.). You've noticed some swelling in one section of the skirting boards; which could be moisture damage, and would like to ask the agent about this, just to confirm that it isn't anything major. The third bedroom would struggle to fit a double bed, but could comfortably accommodate a single bed. The courtyard has been somewhat neglected and it would probably be best to remove the existing garden and start again. The 'short drive to the train station is somewhat redundant as, with a large commuter population, the parking spaces are likely filled by 6:30am each weekday morning. Realistically you would therefore have to walk 15 minutes to the station to commute to the city for work, but you're fine with the walk. Overall, you would definitely consider purchasing the house if you can get it at the right price. You are keen to make an offer sooner rather than later; you want to avoid being outbid, like with the previous property. Of course, you want to ask some questions of the real estate agent to try to gather all relevant information that might influence your valuation of the house, and also to get an idea of how much competition you might have and what alternatives the seller currently has available. You are about to begin discussing and negotiating with the real estate agent