The Devastating Pricing Mistake Sellers Make When the Market Slows
The Devastating Pricing Mistake Sellers Make When the Market Slows
Chasing the Market Instead of Pricing Appropriately From The Start Can Be a Costly Mistake
When the real estate market slows, one of the biggest mistakes when pricing your home is starting too high and then repeatedly reducing their price as the market moves downward. Overpricing can waste the valuable attention a home receives when it first hits the market, cause a listing to become stale, and eventually lead buyers to question why it hasn’t sold. Smart pricing isn’t about giving a home away—it’s about understanding current competition, buyer demand, market conditions, and positioning the property correctly from the beginning to maximize both interest and the seller’s eventual return.
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The Biggest Pricing Mistake Sellers Make When the Market Slows
When the real estate market begins to slow, sellers often make one very predictable pricing mistake:
They chase the market downward.
It usually starts innocently enough. A seller believes their home is worth $400,000, while the current market suggests something closer to $385,000.
So they decide to “test the market” at $400,000.
If nobody buys it, they figure they can always lower the price later.
That sounds logical.
Unfortunately, real estate markets don’t always cooperate with that strategy.
The Market Doesn’t Care What Pricing You Started At
Imagine a home that probably should have been listed around $385,000.
The seller lists at $400,000.
After several weeks without an offer, they reduce it to $395,000.
A few weeks later, they reduce it again to $389,900.
The seller may feel like they’re becoming more competitive.
But there’s a problem.
During those weeks, competing homes have been listed. Other sellers have adjusted their prices. Buyers have negotiated deals. Interest rates may have changed. And the market itself may now value that property closer to $380,000.
The seller lowered the price—but the market moved too.
They’re still overpriced.
That’s chasing the market downward.
Your Best Marketing Opportunity Is Usually at the Beginning
A new listing gets something that an older listing doesn’t have:
Attention.
Buyers receive alerts when it hits the market. Real estate agents notice it. Buyers who have been waiting for a home in that price range take a look.
That initial exposure is extremely valuable.
Realtor.com research on seller pricing found that the first four weeks of a listing can be a critical window. Its analysis also found a relationship between longer market times and weaker sale-to-list-price results.
That doesn’t mean every home must sell immediately.
It does mean sellers shouldn’t casually waste their strongest marketing period with an unrealistic asking price.
Buyers Start Asking a Different Question
There’s also a psychological component.
When buyers first see a new listing, they tend to ask:
“Could this be the house?”
After the home has been sitting for 45, 60, or 90 days, the question often changes:
“Why hasn’t anyone bought this house?”
That’s a very different mindset.
Now buyers start looking for problems.
Is something wrong with the house?
Is the seller unreasonable?
Will they take significantly less?
Has another buyer already inspected it and walked away?
None of those things necessarily have to be true.
The days on market alone can change the perception of the property.
Realtor.com’s analysis of today’s market describes this same shift in buyer psychology once a property begins to look stale. A listing that initially generated curiosity can eventually generate skepticism instead.
Small Pricing Reductions Can Make the Problem Worse
Another common strategy is the incremental price reduction.
$399,900 becomes $395,000.
Then $392,500.
Then $389,900.
Sellers sometimes prefer this because each reduction feels less painful.
But the goal of a price reduction isn’t to make the seller comfortable.
It’s to change buyer behavior.
If buyers weren’t interested at $400,000, reducing the home to $397,500 probably won’t suddenly create demand.
A meaningful price adjustment should reposition the property against its competition and ideally expose it to a new group of buyers.
Otherwise, you’re simply putting a new price tag on the same problem.
Today’s Buyers Have More Pricing Information Than Ever
The strategy of “starting high because somebody might pay it” worked better when buyers had fewer choices or when demand greatly exceeded supply.
That’s not the environment sellers should automatically assume today.
Buyers today are comparing affordability, mortgage rates, condition and value much more carefully. Realtor.com’s current analysis of seller pricing describes today’s market as considerably more balanced than the pandemic-era market, when extraordinary buyer demand often covered up overly aggressive pricing.
That distinction matters.
More choices plus expensive financing means buyers have a strong incentive to compare homes carefully.
And they do.
Buyers can see competing listings, recent sales, previous asking prices, days on market and price reductions almost instantly.
You aren’t negotiating against uninformed buyers.
You’re competing in a very transparent marketplace.
Pricing Correctly Doesn’t Mean Pricing Cheap
This is an important distinction.
When I advise sellers against overpricing, I’m not suggesting they give their home away.
In fact, the goal is exactly the opposite.
The objective should be to position the property where the market will generate the strongest response.
A properly priced, well-presented home can still attract significant attention even when the overall market is slower.
That’s why the conversation shouldn’t be:
“What’s the highest price we can possibly put on the house?”
It should be:
“What price gives us the best probability of maximizing what the seller actually walks away with?”
Those are very different questions.
Your Competition Matters More Than Your Neighbor’s Sale
Sellers naturally focus on comparable sales.
They’re important.
But comps tell us where the market has been.
Current listings help tell us where the market is now.
If three homes similar to yours are currently available for $375,000, listing yours at $400,000 because a neighbor sold for $400,000 six months ago could be a serious mistake.
Buyers aren’t deciding between your house and the house that sold six months ago.
They’re deciding between your house and the homes they can buy today.
That’s why pricing strategy needs to consider:
- Recent comparable sales
- Current competition
- Pending sales
- Inventory levels
- Days on market
- Price reductions
- Property condition
- Buyer demand within the specific price range
No single number determines market value.
Sometimes the Best Pricing Reduction Is the One You Never Need to Make
There will always be homes that need price adjustments.
Markets change. New competition arrives. Buyer activity shifts. Sometimes the initial analysis simply turns out to be wrong.
There’s nothing inherently bad about reducing a price when the evidence supports it.
The mistake is deliberately starting too high under the assumption that you can always reduce later without consequence.
Research cited by Realtor.com found that homes lingering longer on the market generally achieved weaker results relative to their original asking price, while properly positioned homes tended to perform better earlier in the listing cycle.
You may be able to lower the price later.
What you can’t do is recreate the first day your home hit the market.
And in a slowing market, that opportunity becomes even more valuable.
The sellers who tend to perform best aren’t necessarily the ones who begin with the highest asking price.
They’re the ones who understand where the market is headed and position themselves in front of it instead of chasing it downward.
If you’re considering selling a home in Fort Wayne or Northeast Indiana, I can help you look beyond a single comparable sale and evaluate the actual competition, buyer activity and market conditions affecting your property today.
Visit HoosierHomeListings.com to get started.
Michael J Archbold
Associate Broker, REALTOR, ePro
RE/MAX Results
8101 Coldwater Rd
Fort Wayne, IN 46825
c. 260-579-1516
e. Mike@MikeArchbold.com
w. www.MikeArchbold.com
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The consummate professional, Michael Archbold (Associate Broker, REALTOR, ePro) brings a diversified background to the world of real estate. Born and raised in Fort Wayne, Mike graduated Wayne High School in 1992. He received bachelors degrees in Accounting in 1997 from Indiana University and Information Technology in 2005 from Indiana Wesleyan University. Mike comes to Re/MAX with more than 20 years of experience in sales and accounting. He began his career in real estate in 2000 as an investor.
