Why Overpricing Hurts More Than Underpricing

It feels safer to aim high.

Many sellers believe overpricing leaves room to negotiate, while underpricing risks “giving money away.” In reality, the opposite is usually true.

Overpricing costs sellers more, more often, and more quietly.

Overpricing Kills Momentum

The strongest buyer interest happens at launch. When a home is overpriced, serious buyers skip it immediately. They do not wait for a price drop. They move on to homes that feel aligned with the market.

Once that early window passes, urgency disappears.

Underpricing Creates Competition

When a home is priced just below perceived market value, it feels like an opportunity. Buyers rush in. Showings stack up. Offers compete.

Competition drives prices up naturally. Negotiation rarely does.

Many of the highest sale prices come from homes that felt “well-priced,” not ambitious.

Overpricing Pushes Buyers Into Control

As days on market increase, buyers assume leverage. They expect concessions, credits, or discounts.

Even strong offers become conservative when a listing feels stale.

Price Reductions Signal Weakness

A reduced price does not reset perception. It confirms buyer doubts.

Buyers wonder:

• Why did it not sell?

• What else is wrong?

• How flexible is the seller now?

That skepticism shows up in lower offers.

Underpricing Still Has a Safety Net

Underpricing does not lock you into a low sale. It invites the market to respond.

If demand is strong, buyers push the price up.If demand is weak, you get clear feedback quickly and can adjust.

Overpricing delays feedback until it is costly.

The Psychological Advantage

Buyers stretch for homes they fear losing.They hesitate on homes they think they can wait on.

Pricing determines which emotion you trigger.

Bottom Line

Overpricing asks buyers to justify your number.Underpricing lets buyers justify their offer.

One builds resistance.The other builds momentum.