How to price your home in an extreme market

Key takeaways:

• The most common pricing mistake sellers make is setting a list price based on emotional value rather than recent comparable sales.
• Buyers search by price bracket, and a home listed above the range they can afford will not appear in their results.
• In a seller's market, competitive pricing can generate multiple offers.

The housing market in 2026 is not one market. It is many. In some areas, homes are still selling in days with multiple offers. In others, inventory is rising, buyers are cautious and listings are sitting longer than sellers expected.

According to the National Association of Realtors' 2025 Profile of Home Buyers and Sellers, the market continued to show extremely limited housing inventory between mid-2024 and mid-2025, and homes that were priced well moved quickly. In that environment, how you price your home from day one can determine whether it sells above, at or below asking price.

Whether your home falls into one group or the other depends largely on how you price it from day one.

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Every agent and investor interviewed for this article named overpricing as the single biggest mistake sellers make. The reasons vary, but the outcome is the same: The home sits, buyers move on and the seller ends up accepting less than they would have if the home had been priced correctly from the start.

"The classic mistakes sellers make in any market are overpricing and passing on good offers because they think a better offer will come along," said Christina Rordam, an agent with Florida Realty Investments who has worked in the greater Orlando market for 21 years.

Rordam said the first offer is often the strongest.

"The housing market in Orlando right now is such that often the first offer to come in is the best offer, and if sellers reject it because they wanted more money, often the subsequent offers are lower," Rordam said. "It's like the old saying: A bird in the hand is worth two in the bush."

In South Florida, broker associate Lilli Schipper of LoKation Real Estate, who has 22 years in the business, said the issue often starts with how sellers think about their home's worth.

"Sellers get too caught up in the emotional value over the market value," Schipper said. "They often ignore recent comparable sales and/or they focus on one random outlier. As agents, it is important to educate our sellers on market and appraisal value. Because even if they can get their magical number, if the property does not appraise, most likely the buyer will not want to pay their price."

Veronica Peter, an agent at Compass in the San Francisco Bay Area, said the mistake is often about timing, not just numbers.

"The biggest mistake homeowners make in today's market is pricing their home based on what comparables sold for three months ago," Peter said. "In my market, the San Francisco Bay Area, our trends move fast. Homeowners should be looking at what has been happening in their neighborhood today and really focus on what has traded in the last three to six weeks. The May market was quite different from the August market."

Ken Corsini, a former HGTV host and co-founder of Red Barn Homebuyers in Woodstock, Georgia, has bought, sold and renovated more than 1,000 homes with his wife, Anita, over the past two decades. He said one of the most common mistakes sellers make is anchoring their expectations to the wrong reference point.

"One of the biggest mistakes that I often see is pricing based on what a neighbor's house sold for," said Corsini. "Each home is different, and a neighbor's home may have been seen as more desirable."

He said small upgrades are another source of inflated expectations.

"Sellers also shouldn't overvalue their home based on minor renovations," Corsini said. "The first weeks when a property is initially listed is important, and many buyers will be put off once they see the original price of your house."

Many homeowners view a higher list price as a strategic starting point for negotiations, but Thomas Sommers, a real estate agent with Coldwell Banker Realty in Minneapolis, Minnesota, said that approach can backfire by pushing buyers to look elsewhere.

"The single biggest mistake I see homeowners make is thinking they need to price higher than the market supports so they have 'room to negotiate down,'" Sommers said. "That instinct is almost always wrong. Look at the actual data. Most homes selling within a couple of weeks in the Minneapolis-St. Paul metro are closing at around 99% of list price. Buyers aren't leaving room to talk you down. They're simply not looking at homes priced above what they're willing to spend."

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Overpricing does not just slow down a sale. It makes the home invisible to the buyers most likely to purchase it. Buyers set price filters when searching online, and a home listed above their range will never appear in their results.

Sommers said the dynamic is simpler than most sellers realize.

"If you're a buyer with a $400,000 budget, you're not browsing $425,000 listings hoping to negotiate $25,000 off," Sommers said. "It's the same as shopping for a suit. If you need a 42 regular and you spot a 44 long on the rack, you don't stop and consider it. You just keep scrolling past it. That's exactly what happens to an overpriced home. Buyers who can afford more simply pass it by, because it doesn't have the size, condition or features of the homes actually competing at that higher price point."

The margin can be surprisingly small. Schipper described a recent listing where a price adjustment of $4,000 changed the outcome entirely.

"I had a property listed at $629,000 getting one to two showings a week for two months," Schipper said. "However, as soon as we adjusted the asking price to $625,000, we had one to two showings a day and went under contract in a week for $620,000."

The likely explanation: $625,000 fell into a different search bracket than $629,000, exposing the listing to a larger pool of buyers.

The foundation of any pricing strategy is a comparative market analysis, or CMA. This is a report, typically prepared by a listing agent, that compares your home to recently sold, pending and active listings in your area. It accounts for square footage, condition, upgrades, lot size, location and current market trends.

Schipper said the quality of the comparables matters as much as the analysis itself.

"I recommend only looking back six months and ideally looking within a mile," Schipper said. "In our market, being on one side of the street versus the other could be a huge difference in value. So it is important to find the most 'like kind' properties to use as comparables. Using a six-bedroom pool home to compare to a four-bedroom non-pool home is not a good comparable."

Peter said sellers should pay particular attention to pending sales, not just closed ones.

"A homeowner should be paying close attention to pending sales in their neighborhood," Peter said. "Pending home sales give you a real-time pulse for what inventory is trading for. Active listings are just that, active and available for purchase. Sold listings are in the past and not necessarily indicative of the market today."

She said in fast-moving markets, the gap between pending and closed data can be significant.

"For homeowners determining an asking price, especially if their market is changing rapidly, keep a close eye on pending sales," Peter said. "If you are fortunate to learn what the pending sales are in contract for before they close, even better. You'll know how to price the home and meet the buyers where they are at."

Sommers said automated estimates are a starting point, but not a substitute for professional analysis.

"An automated estimate is a starting point at best," Sommers said. "It doesn't account for updates, repairs or the details that make a home stand out from its competition. Getting the price right means studying sold homes, pending and active listings, days on market and price per square foot together, not any single number in isolation."

Homes.com offers a Home Valuation Report that provides an estimated value based on several automated valuation models. Many agents also provide a CMA at no cost before recommending a listing price.

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Recent comparable sales are the anchor of any pricing analysis. But they are not the only factor, and in a shifting market, they can be misleading if used in isolation.

Peter said comparable sales have clear limits in a declining market, and that sellers should be looking at a category of data most overlook entirely.

"Comparable sales are a good measure for what happened in the past," Peter said. "While it can provide a baseline to reference in a stable market, it is not always helpful if you are experiencing a market that is declining. In a market that is experiencing a decline or softening, sellers should be putting more weight into how many homes are currently on the market, which ones are pending and the category that most sellers overlook completely: homes that don't sell at all and are simply withdrawn from the market. Those will be more helpful in giving context on the current market than looking at comparable sales that occurred when market conditions were different."

Rordam agreed that the direction of the market matters more than the last data point.

"Recent past sales should be weighed heavily when considering a listing price for a home, but they aren't more important than what the market is trending toward right now," Rordam said. "Several markets are softening, so as they say, yesterday's price may not be today's price. If more homes are coming up for sale and taking longer to sell, a homeowner may need to be more aggressive with their price."

She said competition from nearby listings can shift the math quickly.

"All it takes is one neighbor to be desperate and slash their price to force a seller to sell lower than they would have been able to, had they been the first home on the block to sell," Rordam said.

Corsini said sellers should track multiple data points at the same time.

"I would watch recent comparable sales, current similar listings, inventory levels and buyer interest," Corsini said. "Sellers should also pay attention to how quickly comparable homes are selling."

He added that mortgage rates are a factor sellers often overlook.

"Sellers should also keep an eye on mortgage rates," Corsini said. "They directly affect what buyers can afford each month, and many buyers will wait to buy a home once the average mortgage rate drops."

National Association of Realtors data provides broader context. The typical seller in 2025 owned their home for a record 11 years before selling, meaning many are entering a market that looks nothing like the one in which they bought. Inventory remains limited nationally but is rising in some regions, and mortgage rates averaged 6.69% in September 2026. These conditions create a market where buyers have more choices than they did two or three years ago but still face affordability constraints that limit how much they will pay.

Rordam listed the key questions sellers should ask themselves:

• How many similar homes are for sale nearby?
• What are interest rates projected to do?
• What is the average days on market for homes like theirs?
• What condition is their home in?

The market will tell you, usually within the first few weeks. The question is whether you are listening.

Schipper said she sets clear benchmarks with her sellers before listing.

"When I meet with my sellers, I always tell them that the goal is one to two showings a week," Schipper said. "In addition, you will get the most activity in the first two to three weeks, if it is priced well. But if your property has been listed for three weeks and you have only had one showing, you may have overpriced it."

She said showing feedback is equally important.

"Another indication that you overpriced it is if every buyer that comes through says it is overpriced or needs too much work," Schipper said. "It is so important that your agent gets you feedback from each showing. If every buyer is saying it needs too much work, that means your property is probably overpriced and you should adjust it. You will know when you are in the right price range when buyers see the value in the property and want to pay you for it."

Rordam said the signals extend to the quality of offers received.

"Lack of activity is a strong indicator that a home is overpriced," Rordam said. "No showings or viable offers indicates something needs adjusting, and it's likely that it's the price. Also, if all a seller is receiving is low-ball offers, that too can be an indicator a home is overpriced and turning the serious buyers off."

Signs your home may be overpriced:

• Fewer than one to two showings per week in the first three weeks
• No offers after two to three weeks on market
• Online views or showings that do not convert into serious follow-up or offers
• Consistent feedback from buyers that the home is overpriced or needs too much work
• Only low-ball offers, with no serious bids near asking price
• Comparable homes in the area are selling while yours sits
• Similar homes in the area being withdrawn from the market without selling

The timing of a price reduction depends on the seller's circumstances and the pace of the local market, but waiting too long is almost always more costly than adjusting early.

Rordam said sellers who need to move quickly should price aggressively from the start.

"If the home has to be sold fast, I'd look at a competitive price right away or adjusting after even a week," Rordam said. "If a home isn't getting showings or offers after a couple of weeks, I think that a price reduction should be considered."

She noted an exception for unusual properties.

"Of course, if the home is highly unique or high-end, in some markets these sales just require time," Rordam said.

Peter said the threshold in a fast-moving market like the Bay Area is roughly three weeks, and that the size of the reduction matters more than most sellers expect.

"If a listing has had showings, open houses, lots of positive feedback and no written offers by day 21 on the market, a seller may want to take the opportunity to reposition the price before the listing becomes stale," Peter said. "It takes a sizable price reduction to re-engage Bay Area buyers. For a price reduction to be effective in bringing new buyers to the table, sellers likely need to reduce a price by 5% or more to get traction."

Sommers said the risk of waiting is not just a slower sale. It can mean less money.

"If a seller still insists on pricing above that compelling range, the risk isn't just a slower sale. It's often ending up with less money than the home was actually worth," Sommers said.

Corsini said the damage from an initial overprice can follow a listing even after a reduction, because buyers who saw the original price may assume the seller is desperate or that something is wrong with the property.

Schipper's example illustrates the math. Her listing at $629,000 sat for two months with minimal activity. After a $4,000 reduction to $625,000, it went under contract in a week at $620,000. The seller ultimately received $9,000 less than the original ask, but the alternative, continuing to sit on the market with the stigma of a stale listing, would likely have produced an even lower result.

In some markets, agents use a strategy of pricing below market value to generate multiple offers and drive the final sale price above what a traditional listing might achieve. The approach is common in competitive markets like the San Francisco Bay Area. In other markets, agents and buyers view it as manipulative.

Peter described a recent example where the strategy produced a strong result for her sellers.

"I recently implemented an 'event pricing strategy' for my listing on 4250 Ruthelma Ave., Palo Alto," Peter said. "The sellers wanted to generate as much interest and demand as possible without leaving any equity on the table. The home was priced strategically against the comparable sales and active listings and was positioned as the best value to buyers in the market."

The approach produced 18 offers. Peter negotiated a final sale price $905,000 above the list price, exceeding the closest comparable sale by $200,000.

Peter said the strategy worked because of specific market conditions.

"The reason this pricing strategy was so successful is because seasoned Palo Alto buyers are familiar with this kind of pricing strategy and there was little immediate competition for this listing," Peter said. "The buyers knew the opportunity to purchase a property with the potential to expand was rare and they came ready to compete."

Not every market works this way. Sommers said the same approach can backfire in markets where buyers are not conditioned to expect it.

"There's another pricing mistake I find just as troubling: agents who deliberately price a home 5% to 10% under actual value to spark a bidding war and sell it for more than it's worth," Sommers said. "It doesn't just distort the market. It creates real anxiety for buyers."

He said the ripple effect changes how buyers approach every listing in that price range.

"If a buyer's ceiling is $400,000, that tactic pushes them to stop even looking at homes listed near $375,000, because they assume they'll need to go $20,000 to $25,000 over asking just to compete," Sommers said. "And afterward, those same agents market themselves as top performers because they 'sold over asking,' when the truth is anyone can do that by underpricing the home from the start."

Rordam said the simplest approach is usually the best one.

"In my opinion, nothing beats a competitively priced home in any market," Rordam said. "Gimmicks like severely underpricing a home and forcing unnecessary bidding wars are kind of ridiculous. Just price it right and actually push the home with real targeted marketing and it will sell."

The takeaway for sellers: Event pricing or below-market pricing can work in specific conditions, particularly in high-demand markets where buyers expect it, inventory is low and the property has unusual appeal. In most other markets, pricing at or near market value is the safer and more predictable approach.

A home that is priced correctly but presented poorly will still underperform. Rordam said preparation is one of the most overlooked factors in how much a home sells for.

"Sellers can really leave a tremendous amount of money on the table by not properly prepping a home to market," Rordam said. "Think deep cleaning, fixing broken items, landscaping, painting. Small fixes can create a better first impression of a home for buyers. And buyers often view unkempt homes as having deep maintenance issues not visible to the naked eye."

She said the agent's effort matters, too.

"Agents need to stop placing homes for sale with iPhone photos and no professional marketing and hoping for the best," Rordam said.

Rordam described a recent example in her market.

"Recently, I listed two homes in neighboring communities," Rordam said. "I got them both under contract at list price in less than a week. Another home nearby with more upgrades than one of my listings sat on the market for several months before also going under contract. Unfortunately, that seller did not do what was needed to present the home in the best light maintenance-wise, and the agent listing the other home did the bare minimum for marketing."

Corsini, who has renovated more than 1,000 homes, said the disconnect between what sellers invest in a renovation and what buyers will pay for it is a recurring problem. Minor updates may improve livability, but they do not always translate dollar-for-dollar into a higher sale price. Sellers who factor renovation costs into their asking price without confirming that the market supports those numbers risk the same overpricing trap.

The National Association of Realtors' data supports the value of professional representation. According to the 2025 Profile, 91% of sellers used a real estate agent, matching the highest percentage on record. Homes sold with an agent had a median price of $425,000, compared with $360,000 for homes sold by owner, a difference of $65,000.

Rordam said sellers also need to be available for showings.

"Another easily fixable error sellers make is not allowing showings or being unwilling to be inconvenienced for a short period of time to allow buyers to actually view the home," Rordam said. "When we list a home, we need to reach the right buyer, and the more buyers that view the home, the more likely we are to find the ideal purchaser."

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Sellers who reject reasonable early offers in hopes of a higher number later should calculate what that waiting period actually costs.

Rordam said the math often works against them.

"Sellers are wise to consider how much money they will lose in carrying costs if they reject a good but not great offer in the home's initial days on market in hopes of a really great offer coming in later," Rordam said.

Carrying costs include mortgage payments, property taxes, insurance, utilities and maintenance. For a home with a $2,500 monthly mortgage payment, $500 in taxes and insurance and $200 in utilities, every month on the market costs roughly $3,200. Two months of waiting costs $6,400, which may exceed the difference between the offer a seller rejected and the one they eventually accept.

For most sellers, a home is more than a financial asset. It is where they raised children, hosted holidays and built routines. That attachment can distort how they evaluate what the market will pay.

Rordam said the best approach is to shift perspective.

"Do your best to emotionally detach," Rordam said. "Try to put yourself in the buyer's shoes. What would you think of a home that wasn't yours with the same features and pricing? The buyer's offer is not about you and it is not personal."

Schipper said education is the most effective tool.

"It is very important that they review and understand a handful of comparable sales when pricing their home for sale," Schipper said.

Corsini's point about neighbor sales reinforces this. What a nearby home sold for can feel like a direct benchmark, but differences in condition, layout, lot position and upgrades mean that number may not apply. An agent who walks through the comparable sales one by one, explaining what each home had and what it sold for, gives the seller a framework grounded in data rather than emotion.

• Review comparable sales from the past six months within one mile of your home.
• Focus on "like kind" properties: similar size, features, condition and lot.
• Pay attention to pending sales for a real-time read on what buyers are willing to pay.
• Track homes that were withdrawn from the market without selling.
• Get a professional comparative market analysis from a local agent.
• Check how many similar homes are currently listed nearby.
• Look at average days on market for homes like yours.
• Monitor current mortgage rates and how they affect buyer purchasing power.
• Track how quickly comparable homes are going under contract.
• Look at whether competing listings are reducing prices or offering concessions.
• Assess your home's condition honestly: What would a buyer see?
• Complete repairs, cleaning and staging before listing.
• Do not assume minor renovations add their full cost to your home's value.
• Set a timeline: How quickly do you need to sell?
• Agree with your agent on a price reduction plan if there is no activity in two to three weeks.
• Calculate your carrying costs so you understand the cost of waiting.