Pricing strategy in a buyer's market

In a seller's market, the list price is really just bait for an auction. In a buyer's market it does something different: it decides whether your home gets seen at all. Most of the pricing mistakes I watch sellers make come from running the hot-market playbook after the market has gone cold. The market doesn't care what you meant to do.

Buyers search by price range

Buyers don't wander through listings, they filter. Every search on a listing site has a price range on it, up to $800,000, or $800,000 to $900,000, and your list price decides which of those searches you show up in. Price a home that's really worth $780,000 at $829,000 and you disappear from every search under $800,000, while you go up against genuinely nicer homes in the range above you. You've picked the one crowd least likely to want your house.

In a slow market it's worse, because there's so much for sale. Buyers in your price range have ten other homes to look at, not two, and their agents line them up by value. A home priced above where it belongs doesn't get a lowball offer. It just gets passed over. You get silence, not an insult.

What "testing the market" actually costs

The instinct makes sense: list high, leave yourself room to negotiate, you can always come down later. Here's what that actually costs you.

• The days-on-market count is public, and it keeps climbing.Every buyer's agent can see how long you've been listed. Once you're past the average for the neighbourhood, the question at showings quietly turns from "what's it worth?" to "what's wrong with it?", and the offers start reflecting that.
• Your best buyers see it first, and only once. The keenest buyers in any price range watch for new listings in the first week. Overpriced the day you launch, and that strongest group writes you off while the number is wrong. They almost never circle back to check on you.
• When you finally cut the price, it confirms what they suspected.A reduction after five slow weeks doesn't read as "fairly priced now" to the market. It reads as "the market already said no to this once." And buyers treat the new lower price as their starting point and push down from there.

You see the same thing every soft market. Homes priced right from day one sell faster, and closer to asking, than homes that started high and walked down to the same number. Same house, same price at the end, and thousands of dollars apart in what the seller actually got. The difference was the first two weeks.

Pricing it right on day one

The honest conversation about comparable sales happens before you list, and it runs on soldprices, what buyers actually paid over the last 60–90 days. Those are the sold and days-on-market numbers TRREB's monthly Market Watch reports for your area. It doesn't run on the active listings, which in a buyer's market are mostly wishful thinking. Your neighbour's asking price isn't a comparable. It's your neighbour's mistake.

From there, price at or a little under the strongest sold comparable. In a buyer's market that's the only real leverage you get to create. Be the obvious best value in your price range and you get the showings, and showings are what turn into an offer. Sometimes two, and two changes the whole negotiation. Underpricing to try to start a bidding war, the way people do in a hot market, mostly falls flat when there's this much for sale. You want buyers thinking "that's clearly fair," not "that's suspiciously cheap."

If a drop becomes necessary

Do it once, make it a real cut, and make it big enough to cross into a lower search range. Three separate $10,000 trims are just three little announcements that you're getting nervous, and none of them puts you in front of a new buyer. One move from $849,000 to $799,000 drops you into every search under $800,000 as fresh value. And change something else at the same time, new photos, or a repair you finally made, so the story is "this listing got better," not "this seller is losing his nerve."

And prep still moves the number in any market, the right prep, not the expensive kind. Price and prep aren't the only homework before you list. How the sale gets taxed belongs on the same list. If you want the real sold-comparables conversation for your own street, awkward numbers and all, that's the meeting I like best.