Why Listing Your Home for a High Price Won’t Always Lead to a Higher Sale

When selling a home, it’s natural to want to maximize your return. After all, who wouldn’t want to get top dollar for their property? But there’s a common misconception among sellers: listing a home at a higher price will result in a higher sale price. While this might seem logical, the reality is far more nuanced, and pricing your home too high can backfire.

Understanding the Market

Let’s start with the basics of supply and demand. In a balanced market, where there are an equal number of buyers and sellers, properties are typically priced based on comparable sales, or “comps.” These are similar homes in the same area that have recently sold. Buyers do their research and are usually well aware of these comps, especially in a specific building or neighbourhood.

For example, let’s look at two condos in the same building: one is 800 square feet and listed for $788,000, while another slightly larger unit is priced at $899,000 and has been on the market for over 24 days. Why the difference? Well, buyers are savvy. They know that size alone doesn’t determine price—it’s also about the condition, location, and amenities. As size increases, the price per square foot typically decreases, and buyers have expectations around what their dollar should get them. Pricing your home too high relative to these comps can lead to one major issue: buyers won’t bite.

Perceived Value Matters

It’s a common belief that buyers will negotiate. Sellers often think that if they price their home high, there’s room for buyers to come down. But here’s the catch: buyers tend to negotiate only when they feel valued. If a home is priced far above what they perceive as its worth, many won’t even bother putting in an offer.

Think about it from a buyer's perspective. If a home is priced significantly higher than similar properties, it can give off the impression that the seller is either unrealistic or not serious about selling. This can cause buyers to avoid the listing altogether, leading them to believe the seller is desperate if the price drops later. And once a property has been on the market for an extended period, buyers may wonder, “What’s wrong with it?”'

The Importance of the First Impression

The first few weeks on the market are crucial. This is when a listing gets the most attention, especially in a competitive market. If the price is too high during this initial period, you miss out on serious buyers. Once a home sits unsold for a while, it starts to develop what’s known as “market wear.” In other words, it becomes stale. Buyers start to wonder why it hasn’t sold and may assume there are hidden problems.

This is even more pronounced in a condo market. With plenty of inventory available, buyers are only willing to invest in a property if it feels like a “steal.” They’re not interested in overpaying, especially if multiple units are available in the same building or nearby. If your home doesn’t offer perceived value immediately, it can get lost in the shuffle.

Dropping the Price Later: A Risky Strategy

Many sellers think, “If it doesn’t sell at a higher price, I can always lower it later.” But this strategy can hurt you in the long run. When buyers see a price drop, they often interpret it as a sign that the seller is desperate or that there’s something wrong with the property. Instead of generating more interest, it can make buyers wonder if they can push the price down even further, weakening your negotiation position.

Furthermore, lowering the price after weeks or months on the market makes the property appear less desirable to agents. Realtors representing buyers may perceive the seller as inexperienced or out of touch with the market, making negotiations tougher.

What About Your Home?

Now, let’s talk specifics. If your property has a few unique challenges—like lacking major upgrades, or needing some TLC—these factors already set a certain expectation for buyers. The key is to price the home in a way that reflects both its current state and the reality of the market. Listing it too high will only highlight these shortcomings to potential buyers.

Buyers today want turnkey properties with all the upgrades, and they’re not interested in paying extra for the privilege of doing renovations themselves. In fact, most would rather pay less upfront and invest in a home they can make their own. If your home doesn’t meet these expectations, it’s even more important to price it competitively to attract attention.

The Bottom Line: Price It Right From the Start

In today’s market, especially when it comes to condos, pricing your home correctly from the get-go is key to getting the most money in the shortest amount of time. Buyers are well-informed, and they have plenty of options. If your home is priced too high, it’s likely to sit on the market, lose momentum, and ultimately sell for less than it could have if priced appropriately from the beginning.

By listing at or slightly below market value, you create a sense of urgency and competition among buyers. This can lead to multiple offers, and in some cases, a bidding war that drives the price up. The goal is to get buyers emotionally invested in your property—not to scare them away with a price tag that doesn’t match the market.

In short, it’s not about leaving money on the table; it’s about playing the game wisely. Price it right, and you’ll likely end up with the result you’re hoping for—a successful sale and more money in your pocket.