A few years back, homes were selling incredibly fast, with multiple offers often surpassing their asking prices. It seemed like you could set any price you wanted and still have plenty of buyers ready to make a deal.

Today's housing market has shifted. Buyers are becoming choosier as there's more inventory available. Homes are also staying on the market for a longer period, and we're seeing more sellers having to lower their prices.

To come out on top, it all begins with pricing your house correctly from the get-go. This is crucial now more than ever, as it can really determine the success of your sale.

There’s a Real Price Disconnect Between Buyers and Sellers

A recent survey by Realtor.com found that 81% of home sellers think they'll receive their asking price or possibly more. However, sales data indicates there’s an increasing disconnect between sellers' expectations and what buyers are really prepared to pay.

An annual report from the National Association of Realtors reveals that 44% of homes recently sold for less than their asking price. Additionally, about one in three sellers had to lower their price at least once before making a sale. This indicates that some expectations might not align with the current market reality.

Take a look at the graph below. It shows data from Redfin indicating that the asking prices (the blue line) are increasingly higher than the actual sales prices (the green line).

Not every buyer is ready to meet the asking prices that many sellers have in mind. This doesn't mean you can't achieve a good sale price, but it does indicate that you should begin with a price that aligns with what buyers are willing to pay in the current market conditions.

What Happens When You Overprice Your House?

Pricing your house high at first might seem like a good idea, giving you some wiggle room for negotiations. However, the truth is that an overpriced home can linger on the market and discourage potential buyers.

Buyers are pretty savvy. When they notice a house that’s been on the market for a while, they can’t help but question what might be wrong with it. This often results in fewer showings, reduced interest, and, eventually, a need to lower the price to attract attention again. As noted by Realtor.com, this is a common scenario.

““By getting the right price early on, you can increase the odds buyers will be interested in the home. In turn, this decreases the chances the home will sit on the market for a lengthier timeline, also reducing the odds you’ll need to lower the listing price.”
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— Realtor.com

You Still Have a Great Opportunity – If You Price Your House Right

To steer clear of this mistake, it's crucial to rely on an agent who understands the local market when you're deciding on your asking price.

Your agent will examine recent sales in your area, current buyer trends, and available properties to pinpoint the ideal price range for your neighborhood since it varies depending on where you are.

Home prices have gone up by more than 57% in the past five years. This means that even if you set your price a little lower than what you originally planned, you’ll probably still come out ahead financially.

Working with a local real estate agent can help you draw more interest in your property, prevent it from lingering on the market, and boost your chances of receiving a solid offer.

In today’s market, pricing your property correctly really makes a difference. Mike Simonsen, the Founder of Altos Research, puts it simply:

““. . . the best properties, well priced are selling quickly in most of the country.”
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— Mike Simonsen, Founder of Altos Research

Bottom Line

The market may have shifted, but your chance to sell is still strong. You just need a solid pricing strategy. Let’s take a look at what’s going on with home prices around here and figure out the best price to ensure your house sells quickly and for the best possible return.