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A Decision Making Process on the Real Estate Market – the Case of Buying a Residential Plot for Building own House

Author

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  • Alina Źróbek-Różańska

    (Uniwersytet Warmińsko-Mazurski w Olsztynie, Wydział Nauk Ekonomicznych, Katedra Polityki Gospodarczej i Regionalnej)

Abstract

A real estate buyer can be both a professional investor, able to conduct an adequate analysis on its own or advised by a counsellor, which leads to the optimal choice, and an ‘ordinary’ person who achieves knowledge about the real estate market from easily accessible sources of information and thus makes a decision on the basis of the basic data or own associations. The aim of the article is to present an individual decision making process. It has been assumed that the buyer of a plot intended for building a residential house makes a decision according to the weighted additive rule, including the possibility of compensation. It leads not to the optimal choice, but the most satisfying one. As a result, even the real estate with the weak value of the most important feature can be selected if it is compensated by very high values of other features. Deliberations based on the relevant literature are illustrated by the example of a potential buyer searching for a residential plot neighbouring Olsztyn.

Suggested Citation

  • Alina Źróbek-Różańska, 2016. "A Decision Making Process on the Real Estate Market – the Case of Buying a Residential Plot for Building own House," World of Real Estate Journal (Swiat Nieruchomosci), Fundacja Uniwersytetu Ekonomicznego w Krakowie, issue 95, pages 11-16, March.
    • Handle: RePEc:kra:journl:y:2016:i:95:p:11-16
    DOI: 10.14659/worej.2016.95.02
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    More about this item

    Keywords

    decision making process; buyer of the residential plot; real estate market;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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