Tom decided to sell his old house, and purchase a new house that is closer to his work. He put his old house on the market, and after eight months he received an offer from Jennifer. After a short negotiating process, Tom agreed on the selling price. However, because he has not purchased a new home yet, he decided to postpone the closing sale for another five months. Jennifer was not happy with Tom's decision because of the inconvenience of having to wait that long, and the challenges of getting a bank to guarantee an interest rate for a loan that is so far in advance. To easer Jennifer's concerns, Tom adjusted the price so Jennifer would agree with the postponement. She agreed on the adjusted price but she would have preferred to close the deal sooner rather than later. Two months later, Tom found a home that met his requirements. The seller of the house, Lisa, set the asking price at $250,000, which was $20,000 above what Tom hoped to pay but $10,000 below the most he would be willing to pay. Tom realized that the more he paid for the house, the less he would have to make some other purchases, such as furniture or bedroom setting.

Using the example above, identify the following:

1. What is the target point?
2. What is resistance point?
3. What is a reservation price?
4. What is the asking price?
5. How does Tom decide on the initial offer?