Authors:
Ramadas Kandath

Addresses:
Department of FSM Adoption and Services, SAP, Plano, Texas, United States of America.

Abstract:

This study explores how anchoring effects influence property price setting and negotiation strategies in real estate transactions. Anchoring, a well-documented behavioural bias, occurs when initial price information heavily influences subsequent valuation judgments and decision-making. In the context of real estate, both buyers and sellers are often affected by the first price they encounter, which can set expectations for the negotiation process. This research examines how initial listing prices, comparative market analysis, and previous sale prices serve as anchors, shaping the final sale price. It investigates the role of anchoring in both buyer and seller behaviour, focusing on how price expectations influence negotiation tactics, concessions, and closing prices. The findings suggest that understanding anchoring can help real estate professionals better manage pricing strategies and guide clients through negotiations. Ultimately, this research highlights the importance of psychological factors in real estate pricing and provides valuable insights into improving negotiation outcomes in property transactions.

Keywords: Well-Documented Behavioural Bias; Negotiation Tactics; Closing Prices; Property Transactions; Psychological Factors; Real Estate Pricing; Pricing Strategies; Understanding Anchoring.

Received on: 10/09/2024, Revised on: 01/12/2024, Accepted on: 22/02/2025, Published on: 09/09/2025

DOI: 10.69888/FTSML.2025.000443

FMDB Transactions on Sustainable Management Letters, 2025 Vol. 3 No. 3, Pages: 95-103

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