If a house is listed for sale and then, a short while later, the price is dramatically reduced, what does that tell you? I view this as an admission of guilt. The price was wrong. Everyone knew it was wrong, but there was some hope held, either by the seller or the agent, that perhaps the price would catch one buyer. When the price is adjusted quickly and meaningfully, the unspoken truth is that the price was wrong and it was never right. Is it a case of no harm no foul, should you list too high and correct yourself midstream? Unfortunately, no. Markets take notes. Markets see your public facing pricing and judge you off of it, whether fair or not, that’s the outcome.
This is a reason sellers might consider using an off-market listing approach, should it fit with their preferred selling method. If you test a price off-market for a month or two, you can easily discover if your price is wrong. If the first person who looks at your house offers you exactly what you want for it, then you know you were priced too low. Conversely, if a few buyers consider it and pass on it for various reasons, and you end up getting an offer that’s 10 or 20% below your ideal sales price, then you know that your price is high. If you shop a price for a month or two or three and no one even wants to look at your house, then you know you’re absolutely crazy. Off-market listings are like market beta tests. You get to figure out what’s right or wrong without exposing the property to the market, because once you do so, the only correction is a meaningful price reduction and that’s when you tell the market that you admit your mistake and you were wrong. The issue is, like elephants and my wife when I say something I shouldn’t have said, even if it’s clever or otherwise poignant, the market doesn’t forget.