The Ethics of Bargaining

Some people will insist that you should never pay the asking price for anything; if the seller won't negotiate with you that's fine, do what you want, but you should always try to bargain. In some cultures haggling is considered an art, and people will be most disappointed in you (if not offended outright) if you don't at least try to cut a better deal. In the U.S. most people will expect that the seller will add to the price, to make more profit, and that the buyer will offer less than the asking price, to save money. No harm is done, and no one's feelings are hurt, either way. But what happens when you know this isn't the case?

Take the case of someone who is selling a house after a messy divorce. If they have bad memories of the place, they may have set the price too low; do you have a duty to tell them they have done so and suggest that they raise the asking price? Or do you have an obligation to your family to create as much wealth as possible, in which case you should just take the deal?

On the other case, suppose someone has done badly in the settlement, and is pricing the house too high in an attempt to raise more money. Should you offer a price you feel is reasonable, even though you know the seller needs the money more than you need this house? Or should you just reject the deal as too expensive and move on? Does it matter if the seller is distraught over the breakup and is not thinking well?

Most people will tell you that both the buyer and the seller have a legal (and in the case of an agent or representative, a fiduciary) responsibility to determine what a fair price actually is; they can each offer value or concessions as needed to close the deal. Offering less money in a weak market or charging more in a strong one is just a matter of adapting to changing conditions, and should not carry any emotional freighting. But that is definitely harder than it looks...

People develop very strong feelings about their homes, and may have emotional reactions to the haggling that have nothing to do with the actual merits of the deal. Sometimes this will also extend to buyers who have decided that a given structure is their "dream house" and are willing to pay far too much for it. If the person with whom you are doing business is making decisions based on emotion rather than finance, do you have any responsibility to deal fairly with them? Or should you just assume that they are adults and let them do what they're going to do?

It's worth thinking about...