You and your spouse each work full-time and are saving for a down payment to purchase your first house. After five years you have saved $80,000. In your state, a down payment of 20-percent is normally required, as banks are unwilling to offer a loan greater than 80-percent of the sales price of a home. You and your spouse have almost agreed on your shared priorities. You each want a three-bedroom home with a one-car garage. You would like a home within 20 km of the CBD, while this is not as important to your spouse who would like to live in a neighbourhood with trees. You think trees are nice but you prefer a veranda with an attractive view. After months and months of searching (and three purchase offers that were simply rejected) you have finally found a couple of houses that interest you, and that meet most of your shared priories as follows:

1) Asking price: $510,000. 3-bedroom house in very good condition (with a garage), 18 km from the CBD, no trees but a veranda that has distant views of tall mature trees.

2) Asking price: $420,000. 3-bedroom house in need a bit of exterior paint (with a garage). It does have a functional bathroom (but your spouse thinks the bathroom needs renovating) and no veranda. It is 25 km from the CBD on an attractive tree-lined street.

The first house just came on the market and the second house has been on the market for at least four months. Interesting, the same real estate agent is representing each seller. You have a proof of funds (PoF) letter from your bank for a standard loan, while your spouse thinks that you should present this letter to the real estate agent to demonstrate that you are, in fact, serious buyers.

Use Chapter Two (Lewicki) "Strategy and Tactics of Distributive Bargaining" to build a plan to engage in these negotiations.