The Pricing Mistake I See Every Month

Almost every seller I sit down with has the same instinct: price a little high, leave room for negotiation, see what happens. I understand the instinct. I disagree with the strategy. Here's why.

The first two weeks do most of the work

When a listing hits the MLS, it pushes out to a few hundred saved searches, a few thousand alerts, and onto the home page of every major listing site for that price band. That burst of attention happens once, and it happens fast. If your price is wrong for the house, the people who see it in that first window scroll past, and the algorithm starts deprioritizing the listing on day eight.

By the time you cut the price three weeks later, the audience that mattered has already moved on. You're now showing the house to the second-tier audience at the right price instead of the first-tier audience at the right price. That's the cost of "leaving room."

What overpricing actually looks like

Median time on market for correctly-priced listings in our area right now: 18 to 24 days. Median time on market for listings that started 8% over comp: 71 days, with an average price cut of $32,000 along the way. They don't end up at the original "high" price. They end up below where they would have if they'd just priced right the first time.

What to do instead

Price at the comp. Not above it. If you're confident the market will pay above the comp, price at the comp and let the multiple-offer dynamic do its job. The houses that get bid up are the ones that look like obvious deals at first glance — and "obvious deal" is a function of price relative to the rest of the listings on the page that morning.

I know it's counterintuitive. Trust the data, or at least ask me to show you the actual report for your zip code before you decide.