If you have a house that rents for $2000 a month, this is going to take a bigger hit on margin during a downturn than say a $600/month unit. the further your price is from the market average, the more you'll have to concede. what's the likelihood we have a correction worse than 2008 though?

She is making the rules so you either play hard ball at her level or concede now.  

I know you already conceded you were not going to try this and that is the RIGHT decision, but I want to make a simple observation here.

Real estate is about relationships and when I do something as you are by proposing a new venture with someone new, I am willing to concede a little bit more if they are someone I think I want to be able to go back to at some point.    

DON'T BE A HATER THOMAS OP - I would take some time to learn credit reporting a bit better. credit scores are a really lousy way to evaluate how a person manages their finances. understanding a score and putting a story to it will help tremendously because as Thomas has said, with the type of property you own you may have to concede (as you've already noticed). maybe it's on pets, maybe it's on credit report, maybe a bit of both.I'll say this, if you don't feel confident about a tenant, you're probably right. don't put someone you know will be a headache in that building.

I told her I didn't want to concede just because we got pushback from the other agent.

Seemed like one bidder just conceded to another if they showed interest. 

I will absolutely concede that by the definitions you used above a duplex would be a single family.  

I don't really see our primary residence as an investment and I will concede that it doesn't produce income (most personal residence don't)...but it dose provide my family a tremendous dividend: a comfortable and enjoyable residence.

In that very rare circumstance you describe, I'll go ahead and concede.