Pricing your home too high is one of the most tempting mistakes sellers make.

The thinking is understandable. You can always lower the price later, right?

The problem is that pricing high rarely protects your upside. More often, it quietly erodes it.

Why overpricing works against you

Most buyers begin their search online weeks or months before they ever book a showing. By the time your home appears in their feed, they already have a strong sense of value in your neighbourhood and price range. Many are also working with an experienced REALTOR® who is actively comparing your home to recent sales, not just current listings.

If your home doesn’t stack up well against similar properties buyers are seeing, one of two things happens. They skip it entirely, or they mentally file it away as overpriced and move on.

You might expect buyers to simply make a lower offer if they like the home. In reality, that rarely happens.

 

Here’s why buyers usually don’t “just make an offer”:

 

1. They don’t want to offend the seller

Most buyers feel uncomfortable starting negotiations with what they believe could be taken as an insulting offer. Even sellers who say low offers don’t bother them are often surprised by how emotional it feels when one actually comes in. Add a healthy dose of Canadian politeness to the mix, and many buyers would rather keep scrolling than risk an awkward exchange. When emotions run high on either side, deals tend to stall before they really begin.

2. They’re worried about being rejected or overpaying

Buyers pay close attention to how homes compare within a neighbourhood. When a price feels out of step with similar listings and recent sales, many buyers decide it isn’t worth the effort to bridge that gap. Making an offer is stressful. Buyers often get their hopes up despite their best intentions, and sit on pins and needles while waiting for a response. If the gap between price and perceived value feels too wide, the risk of rejection often feels bigger than the reward, and they move on.

3. They don’t want to waste time

In addition to the risk of rejection, there’s a loss of momentum on the buyer side when they stop to make an offer.  They pause their search and viewings to go through the process. There’s back-and-forth, paperwork, financing discussions, and inspections to think about. Buyers are far more willing to invest that time in homes that feel realistically priced from the outset, especially when other options are available.

 

What typically happens next

Once a home sits on the market longer than expected, two common issues start to show up.

The listing becomes stale
New listings naturally attract the most attention. When a home lingers, buyers begin to wonder why. Even if nothing is actually wrong, perception plays a big role. Many buyers assume there must be an issue and stop booking showings altogether.

At that point, sellers face a tough decision. Hold the price and wait, or adjust it.

Price reductions can help, but they rarely reset the clock completely. Buyers who passed on the home the first time may not come back, even if they can’t quite remember why they moved on. New interest often comes from buyers who are either just entering the market or looking for a deal, which can lead to more pressure during negotiations.

The appraisal comes in low
Sometimes an overpriced home still sells, often because one buyer was willing to stretch the budget. That doesn’t mean the deal is secure.

If the buyer’s lender orders an appraisal and it comes in below the agreed-upon price, the buyer has to make up the difference in cash. Many buyers can’t do that. When they can’t, the deal can fall apart and the home ends up back on the market with the added baggage of a failed conditional sale in its history.

 

Proof from real market behaviour

It feels logical to price higher to leave room for negotiation. On paper, that approach makes sense. In practice, buyer behaviour tells a different story.

We saw this clearly in the 2021–2022 market. Almost every property was listed at a starting bid price, sometimes far below what the home was expected to sell for. Those homes didn’t sell because they were underpriced. They sold because buyers perceived value, urgency, and alignment with the market, which encouraged strong participation and competitive offers. The final prices often ended up well above list.

At the same time, even in the most competitive years, overpriced homes still sat. That contrast is telling. When buyers felt a price was out of step with reality, they disengaged, regardless of how hot the market was.

That strategy of intentionally setting up bidding wars no longer works in most cases, and frankly, most buyers are relieved to see it go. But it revealed something important that still holds true today. Buyers don’t respond well to prices that feel inflated. They respond to pricing that feels reasonable, credible, and worth the emotional investment of making an offer.

 

Why Proper Pricing Works

Pricing your home properly from the start puts you in a stronger position.

Sellers who price at market value typically see:

• Faster sales because buyers recognize value right away

• Stronger offers, sometimes with fewer conditions

• Better exposure since the home appears in more relevant searches

• Less disruption to daily life from extended showings

• More control over key terms like closing dates and inclusions

• Fewer frustrating negotiations that feel reactive or defensive

The goal isn’t to underprice your home. It’s to position it so buyers engage confidently while the listing is still fresh.

That’s where real leverage is created.

Click Here To Learn About More Common Seller Mistakes

Updated December 2025