The Pricing Mistake That Could Cost You Your Sale

Most sellers come into the market with one number in mind. And its often the one that costs them the most. That's their asking price.

A survey from Realtor.com shows about 8 in 10 (80%) of sellers expect to sell at or above their asking price today. But heres where things get interesting.

In reality, only about 4 out of every 10 (roughly 40%) actually do.

Thats a big gap. And its where a lot of sellers get caught off guard. So, why the disconnect? And how can you set yourself up to be one of the 4 in 10 that get top dollar?

Lets break it down.

What Should You Really Expect To Get for Your House?

That 40% may sound low at first, but its not.

If you look back to the last typical year for the housing market (2019), what we're really seeing is a return to whats normal (see chart below). If anything, slightly more homeowners are able to sell above list price today compared to 2019:

It only feels low because the past few years were anything but typical. Between 2020 and mid-2022, buyer demand was sky-high and the number of homes for sale was at record lows. Almost everything sold over asking.

Now, the market has shifted.

There are more homes for sale. Buyers have more options. And that means theyre more selective about how they spend their money.

In other words, the rules have changed and pricing like its still 2021 is where sellers run into trouble. You have to meet the market where it is if you really want to cash in big.

What Happens When a Home Is Priced Too High

Heres the reality. Its easy to think pricing high gives you room to negotiate. But it usually does the opposite.

When your home is priced above what buyers expect, in this market, they dont negotiate. They move on.

Because buyers notice price first. And if your home doesnt line up with similar options in your area, it may not even get a showing. And thats when things start to snowball:

• A high price gets less interest from buyers.

• Less interest means fewer offers.

• And fewer offers usually means more time on the market.

Take a look at this table from the Indiana Association of Realtors. While this data is from one state, the general trend is going to hold true across many markets in the country. It shows that homes listed at or under market value sell fast. But homes priced high? They linger. And that delay comes at a very real cost.

The Price Cut Trap (And How To Avoid It)

When a home sits that long without offers, a lot of sellers will do a price reduction. According to Realtor.com, 16.7% of sellers are going that route today.

But heres the real problem. Even a price cut doesnt guarantee a sale.

In fact, some buyers will see a reduction as a sign somethings wrong with the house even when nothing is.

Thats why data from the National Association of Realtors (NAR) shows the longer a home sits, the bigger that price cut tends to be to attract buyers back:

So, what starts as a strategy to leave room for negotiate can end up costing you more in the long run.

Why Pricing Right from Day One Matters

Even though listing at or even just shy of market value may sound counter intuitive if youre looking to get as much money for your house as possible, a lot of the time it really is the best strategy.

Because the goal isnt just to list your house to see what price sticks. Its to price it in a way that creates demand from day one.

NAR puts it best:

While some sellers are pricing their homes higher than ever, a more goldilocks frame of mind is a better approach to avoid price cuts and lingering time on the market.

In other words, theres a sweet spot. Too high, and buyers disappear. Too low, and they question the value.

But right in the middle? Thats where the magic happens.

And thats where the right agent comes in.

They help you understand what buyers are actually paying right now, how your home compares, and how to price it so it stands out immediately. And in todays market, that strategy is the difference between:

1. Listing high, watching it sit, and selling for less later.

2. Or, pricing it right, creating competition, and putting yourself in a position to win from the start.

Bottom Line

A lot of homeowners think they can list high now and negotiate later, but thats a mistake that costs them. And its the reason only 4 out of every 10 sellers are getting their asking price or more.

If you want to be in that group, it starts with getting the price right from day one.

Connect with a local agent to make sure you are.