When Should You Lower the Price of Your House?

We Listed at $269,900

The house was in Imperial.

My sellers were good friends of mine and had been for a couple of decades. They trusted me, and at the time I was still relatively early in developing the pricing theory I use today.

We listed their house for $269,900.

That first weekend we had an open house and private showings. Then we started getting feedback.

Two different buyers essentially told us the same thing: “This house is our number two.”

That’s not bad feedback. Actually, it’s incredibly useful feedback.

Because those buyers had just answered one of the biggest questions sellers have: are buyers actually comparing my house with the other homes they’re seeing?

Absolutely.

These buyers weren’t evaluating our house in isolation. They had seen their options. They liked our house. They were seriously considering it. But when they compared everything available to them, another house was winning.

We were close. But close doesn’t produce a contract.

By Tuesday, Those Buyers Were Leaving

After the weekend, I followed up with the agents. That’s when I learned both buyers were moving forward with their number-one choices.

Now we had a decision to make.

We could wait. Give it another weekend. Give it two weeks. Hope another buyer came along. And eventually, if nothing happened, reduce the price.

That’s how price reductions are usually treated. Wait until you’re sure there’s a problem. Then react to it.

I didn’t want to do that.

Because we already had evidence. We weren’t wildly overpriced. Buyers weren’t rejecting the house completely. Two serious buyers had effectively told us: you’re almost there.

And those same buyers were about to disappear.

So I told my clients: we’re missing the market by very little. But we have nothing in hand. And probability says if these buyers move on, we may end up waiting for a completely different buyer to arrive.

My advice was to reduce the price $5,000 immediately, from $269,900 to $264,900, before the market ever had the chance to consider us stale.

They trusted me. We did it.

Both Buyers Came Back

This is why the story matters if you’re considering reducing the price of your house today.

We weren’t reducing the price hoping some unknown buyer might eventually notice us. We knew exactly who we wanted back.

The buyers who had already compared our house against the market. The buyers who had already decided they liked it. The buyers who were close enough to choosing it that they ranked it number two.

We changed the equation while they were still buyers.

And both came back.

Now something completely different was happening. Instead of one buyer reconsidering a stale listing three weeks later, two motivated buyers were reconsidering the house at the same time.

They competed.

That’s why I don’t think the purpose of a price reduction is simply to make your house cheaper.

The purpose of a price reduction is to change a buyer’s decision.

And if you’re going to do that, timing matters.

The Buyer You Want Isn’t Waiting for You

This is the problem with the standard advice to wait 14 days, 21 days or 30 days before reducing.

It assumes the buyer pool is standing still. It isn’t.

The buyer who toured your house Saturday might write an offer on another house Tuesday. The buyer who has already lost three multiple-offer situations might decide to sit out for a while. A brand-new buyer enters the market who hasn’t toured enough houses yet to understand what their money buys. Another buyer starts specifically looking for listings that have been sitting because they don’t want competition.

The buyer pool changes while your listing sits.

That’s why waiting has a cost that isn’t immediately visible on your listing sheet. You aren’t just accumulating days on market. You’re potentially losing the buyers who were most prepared to buy your house.

The Buyer I Want on Day 1

There are three broad buyer groups I think about when I’m selling a house.

First-entry buyers are still learning the market. They’re figuring out neighborhoods, financing, inspections and what their budget actually buys.

Actively writing buyers already know. They’ve toured houses. They’ve compared them. They may have already lost an offer. They know what $300,000 buys. They know what $400,000 buys. And when the right house appears, they’re prepared to act.

Then there are benched buyers. They’re still potential buyers, but they’re less motivated to compete. Some are exhausted. Some have lost several houses. Some are waiting for a listing to sit long enough that they believe they can negotiate.

When your house first hits the market, I want the actively writing buyers. Those are the buyers I don’t want to lose while we wait two weeks to admit we missed the price.

Related

Showings but No Offers? What St. Louis Buyers Are Really Telling You →

Your First Weekend Is Giving You an Answer

This is why I care so much about what happens during the first weekend.

Your listing is brand new. The buyers already watching that market see it. Their agents see it. They look at the photos. They compare the price. They compare the condition. They compare it with the houses they toured last weekend.

Then they make a decision: Is this house worth my time?

If they schedule a showing, they’ve already passed your house through one filter. Now we get to see what happens when they actually experience it.

Do they come back? Does their agent ask whether you have offers? Do they ask what’s important to the seller? Do they start talking about terms? Do they tell us they’re writing? Or do they tell us: “It’s our number two.”

All of that is evidence. And that’s why Monday and Tuesday matter.

Not because every house needs a price reduction after its first weekend. It doesn’t. But because I don’t want to waste the best information we’re going to receive while the buyers who gave it to us are still available.

Stop Waiting for the Calendar to Tell You You’re Overpriced

One of the most common approaches to price reductions is essentially: “Let’s give it two weeks.”

Why two weeks? What information are we expecting Day 14 to give us that our actual buyers couldn’t give us on Day 4?

Sometimes waiting makes sense. Maybe activity is strong. Maybe we have second showings. Maybe buyers are asking offer-related questions. Maybe there are unusual circumstances affecting the weekend.

I’m not advocating automatic Monday price reductions. I’m advocating Monday diagnosis.

If the evidence tells me we have narrowly missed the market, I want to know that now. Because if we wait until everyone agrees the listing is stale, we’ve solved the wrong problem. We finally proved the price was wrong. But the buyers we wanted may already be gone.

A Price Reduction Doesn’t Rewind the Market

This is the most important thing I want you to understand if you’re considering lowering your asking price.

You can change the number whenever you want.

You cannot recreate Tuesday.

You cannot make the buyer who went under contract Wednesday become available again. You cannot force the experienced buyer who dismissed your house two weeks ago to suddenly start paying attention. And you cannot assume the buyers entering your listing on Day 25 are the same buyers who were watching on Day 1.

That’s why reducing later can produce such a frustrating result. You finally arrive at the price buyers may have wanted originally. And nothing happens.

The natural reaction is: “We lowered the price. Why aren’t buyers coming?”

One possible answer is uncomfortable: the buyer who would have cared about that price isn’t shopping anymore.

My St. Louis Market Study Is Why I Take This Seriously

I studied 2,369 St. Louis-area transactions using MARIS MLS data because I wanted to understand what happened as sellers missed their initial market window.

I looked at what sellers ultimately received compared with their original asking price. That distinction matters.

If a seller publicly reduced the price, they came off the original asking price. If they negotiated below the original asking price to secure the contract, they came off the original asking price. Either way, they failed to secure the price they originally entered the market trying to achieve.

The pattern was hard to ignore. Listings that secured their original asking price or better were heavily concentrated early. Once sellers missed that early opportunity and had to move away from their original asking price to secure a contract, they rarely made it all the way back.

That doesn’t mean waiting itself caused the outcome. Some houses were overpriced. Some had condition issues. Some faced stronger competition.

But as a seller, that’s not a reason I’d be comfortable wasting the early market. It’s the opposite. If your best probability of protecting your original price exists early, I want to learn as much as possible from those first buyers and react while I still have them.

Sometimes You Miss the Market by $5,000

When sellers hear the word “overpriced,” they tend to picture a ridiculous price. A $400,000 house listed at $450,000. That’s easy to diagnose.

The dangerous miss is much smaller.

Imperial wasn’t being ignored. Buyers weren’t laughing at the price. They were coming through the house. They liked it. Two buyers independently ranked it second.

We weren’t $50,000 away. We were close enough that changing the equation by $5,000 brought both buyers back into the conversation.

That’s why you shouldn’t automatically interpret “no offer” as a complete rejection of your house. Sometimes buyers are telling you: almost.

Your job is figuring out what “almost” means before they buy something else.

You Have to Get Them Back at the Same Time

There’s another part of the Imperial story that’s easy to miss.

Getting one buyer back would have been good. Getting both buyers back at the same time changed the situation.

Think about the difference.

One buyer looks at a listing that’s been sitting for three weeks. They wonder: Why hasn’t anyone bought this? How much negotiating room do I have? What can I get the seller to take?

Now imagine two motivated buyers reconsidering the same house during the same window. The question changes: Am I going to lose this house to the other buyer?

That’s why the goal isn’t simply generating another showing. The goal is to recreate concentrated buyer attention. That’s what your original launch gave you. And if we’re trying to recover from a pricing miss, that’s what I want to attempt to create again.

Think of the Price Reduction as a Second Launch

This is the biggest change I’d make in how sellers think about reducing their price.

Don’t think: We’re dropping the price.

Think: We’re relaunching the value proposition.

Who passed on us? Why? Are they still available? What did they choose instead? How far away were we? What has changed? And is the change significant enough that someone who already said “no” has a reason to look again?

That’s very different from repeatedly shaving a few thousand dollars off a listing and hoping somebody eventually bites.

If we’re going to use a price reduction, I want it to do something. I want buyers to reconsider. I want agents who showed the house to have a reason to call their clients. I want buyers who passed online to reconsider the comparison. And, whenever possible, I want that attention compressed into the same window.

I don’t just want a lower price. I want another decision.

And Sometimes You Don’t Need to Reduce the Price at All

One of my Wintergreen listings taught me the other side of this.

We initially launched the property with an arbitrary offer deadline. But we were dealing with an exhausted buyer pool. These buyers had already been through competition, deadlines and multiple-offer situations.

Then the deadline passed. And something interesting happened.

The listing essentially relaunched itself. We didn’t change the asking price. What changed was the context. The pressure of the artificial deadline disappeared. Buyers could reconsider the house without feeling like they were walking directly into another forced competition.

And the property ultimately sold over asking price.

That’s why the lesson here isn’t: reduce faster.

It’s: figure out why the buyer didn’t choose you—and determine whether you can give them a reason to reconsider while they’re still a buyer.

Sometimes that’s price. Sometimes it isn’t.

What If Your House Has Already Been Sitting?

Then we have a different problem.

The original launch is gone. The actively writing buyers who saw the house when it was new may have moved on. Some may already own another house.

So I don’t want to pretend that dropping the price $5,000 on Day 35 magically puts us back on Day 1. It doesn’t.

At that point, I want to determine what it would take to create a real second look. Maybe that’s a meaningful price correction. Maybe the house needs a condition change. Maybe the presentation needs to change. Maybe something about the original launch suppressed buyer response. Maybe the economics tell us it’s better to adjust the price than spend money trying to improve the condition.

Or maybe we need to think about an actual relaunch strategy.

But whatever we do, there needs to be a reason. Because “it’s cheaper now” isn’t always enough to make a buyer reconsider something they’ve already rejected.

Related

Why Is My House Getting No Showings in St. Louis? →

So Should You Lower the Price of Your House?

Maybe.

But that’s not the first question I’d ask.

If you’re considering a price reduction right now, start here:

Who are you trying to get back? Who saw the house? Who almost chose it? What did their agents tell you? What were they comparing you against? Are those buyers still available? And what would have to change for them to reconsider?

Because the best opportunity may not be some buyer who discovers your house three weeks from now. It may be the buyer who almost bought it three days ago.

That’s why I don’t want to wait for a listing to become obviously stale before deciding what went wrong.

If the first weekend tells us we’ve narrowly missed, that’s when I want to pay attention. That’s when I want to follow up. That’s when I want to diagnose. And if the evidence tells us an adjustment could change the decision, that’s when I want to have that conversation with the seller.

Because once those buyers are gone, we’re not fixing the original launch anymore. We’re starting over with a different buyer pool.

And that’s a much harder problem to solve.

Full diagnostic

20 Questions That Will Tell You Why Your St. Louis Home Didn’t Sell →