54% of Recent Home Sellers Had to Reduce Their Prices. Here's Why That's a Move Worth Avoiding

Backtracking on your listing price could make you lose your edge.

There was a point not so long ago where sellers could get away with, well, a lot given the state of the housing market. Not only could they command sky-high prices for their homes, but they could even skimp on things like home staging and basic cosmetic repairs before listing their homes.

Now the reason sellers had such an upper hand last year, and even earlier on this year, is that buyer demand was really strong. Mortgage rates remained very low in 2021, and inventory was even more limited, creating a scenario where buyers were so desperate to find a home they'd stretch their budgets to overpay.

But these days, there's more inventory to choose from, and mortgage rates are no longer as competitive. Quite the contrary -- it's gotten very expensive to take out a mortgage, and that alone has been pushing buyers out of the real estate market.

That's why anyone looking to sell a home today needs to be careful about how they price it. And if you're planning to sell, you should know that overpricing your home could hurt you in a very big way.

Get that number right from the start

In a recent HomeLight survey, 54% of recent home sellers wound up having to reduce their listing prices. And that's a problem.

When you list a home at a price that's too high and buyers don't bite, your home might sit on the market a long time. And that alone gives buyers more negotiating power.

Meanwhile, once you realize you've overpriced your home and are forced to reduce your listing price, you pretty much give up the bulk of your negotiating power. The result? A lower price for your home than what you want.

So, let's say you really want to walk away with $500,000 for your home. If you list it at $530,000, buyers might pass it up. If you then reduce it to $505,000, you might walk away with $490,000 -- whereas had you listed it for $505,000 from the start, you might've wound up with that $500,000 offer.

How to price your home correctly

It's important to list your home for a price that makes you happy without turning buyers off. And that can be a difficult balance to strike.

That's why your best bet may be to partner up with an experienced real estate agent who knows your local market really well. That agent can look at the prices comparable homes have fetched in recent months and help you come up with the ideal listing price based on current market conditions.

A real estate agent can also negotiate with buyers on your behalf. And that could help you walk away with a sale price you're pleased with.

Although there's still not quite enough housing inventory to meet buyer demand, the real estate market isn't nearly as red-hot as it was last year, or even at the start of 2022. And sellers need to recognize that they no longer have such a clear upper hand.

If your goal is to sell your home quickly and for a reasonable price, you should prepare to not only put out a number that's fair, but also, take some steps to present your property in the best possible light. That means decluttering and addressing cosmetic issues that might end up being a deal-breaker for potential buyers.