Anchoring
A negotiation tactic where the first number stated frames the entire discussion, pulling the final price toward it.
Anchoring is the psychological pull the first number exerts on a negotiation. Whatever figure lands first — the seller's asking price or the buyer's opening offer — becomes the reference point everything else is judged against, even when it's arbitrary. Setting the anchor shapes the range the deal ultimately settles in.
For investors, anchoring cuts both ways: a seller's inflated asking price anchors high, so a well-justified lower offer, backed by comps and repair numbers, resets the frame. The skill is anchoring assertively without insulting the seller — a number low enough to leave room, grounded enough to keep the conversation alive.
Related terms