The overwhelming majority of letters I received this month were about pricing listings. So, let’s dig in on how you and your sellers can get the advantage in this market.

Over 79.5% of Canadian homes listed for sale today aren’t selling, according to an estimation based on Canadian Real Estate Association (CREA) data. Sellers can’t understand why their homes aren’t moving, and agents are struggling to tell the truth. This isn’t a small issue – it’s the defining challenge of our market.

Why We Keep Getting It Wrong?

The Bidding War for Listings

Too many agents set their suggested list price higher than they know is reasonable because they fear losing the listing to a competitor who promises more. In some cases, this is fully conscious. They know the market won’t support the number, but they also know another agent will come in and tell the seller exactly what they want to hear.

Other times it’s unconscious bias. Because we want the listing and don’t want to disappoint the seller, we start seeing evidence that supports a higher number, even when the data doesn’t. The pressure of competition makes it easy to round up without realizing it.

The Skills Gap

I’ve seen several CMAs recently where agents used the MLS tools in ways that don’t establish accurate market value. They’re not choosing comparables effectively, they’re not making accurate adjustments, and they’re using average asking price data. This leads to recommended prices that can be significantly higher than market value.

Wishful Thinking isn’t A Strategy

I’ve watched agents give higher prices because they’re sad the seller will lose money. I get it, but contributing to unreasonable expectations doesn’t help a seller who needs to sell.

Many agents simply don’t believe real estate prices have dropped as much as they have, or they assume recovery is around the corner. We don’t want the market reality to be true, so we replace it with positivity.

I’ve started using a new term: practical optimism. Be realistic about market conditions and positive about a potential sale. “While the price won’t be what it was in the COVID bubble, there are buyers out there, and with the right strategy and positioning, we should be able to get your home sold.”

Why Sellers Overvalue?

They Love What’s Theirs
People overvalue their own assets. Research shows that someone’s maximum willingness to pay for an object is typically lower than the least amount they’re willing to accept to sell it. That gap is huge in real estate.

The Waiting Game
Most sellers have accepted recent market depreciation, but many feel if they wait they’ll get a higher price. Interestingly, if you ask them directly whether the market will improve soon, most admit it’s unlikely. They just don’t want to accept it applies to them.

The Old Playbook
Many sellers stick to the belief that if they ask more, they’ll get more. They imagine perfect buyers are waiting who will pay above market, or that overpricing leaves room for negotiation. It almost always costs them.

Contributing to This Mindset :

• The Trust Gap : The trust deficit in real estate creates skepticism when an agent gives them a lower but more accurate number. They think you just want a quick commission.

• The “I Have Time” Myth : Some sellers feel that if they’re willing to wait, they’ll get a higher price. Agents reinforce this by suggesting a time/price relationship. That’s true in a rising market—not in a flat or falling one.

• Industry Conditioning : Listing presentations have long been about promising high prices and flashy marketing, not the harder, more valuable skills of strategy and negotiation.

The Strategic Edge of Pricing Right

Here’s the opportunity : there are a finite number of buyers in the market, and they will offer on and purchase the properties that are most attractive, typically a combination of the home’s attributes and the asking price. With most homes overpriced, you and your seller have a chance to price realistically, attract quality buyers, and secure a market value offer.

Think about this: if every listing got reduced to the current market value tomorrow, and the number of buyers remained fixed, the market value would fall quickly and significantly. So use those overpriced properties as the lever to get your client’s home sold.

In a balanced market, it’s not about the highest asking price. It’s about the highest probability of a successful sale.

Communicating The Truth

Truth – Empathy – Clarity – Courage

Truth : Assess market value accurately without bias. This isn’t what you want it to be worth; it’s what a buyer would be willing to pay.

Empathy : The truth is hard for some sellers to hear, but supporting unrealistic expectations is unprofessional and could be damaging. Let them know you understand how difficult this might be.

Clarity : Communicate directly. Avoid long-winded hedging that leaves sellers with false hope.

Courage : Deliver the truth. Most people need it.

And when they say another agent gave them a higher price? Respond truthfully: “I have no doubt. There are lots of agents who will tell you what you want to hear to get the business. What data did they show you, and do you believe it?”

The bottom line
The agents who master the skill and gather the courage required for accurate pricing are the ones who will thrive in this market. Not the ones with the highest promises.

Negotiation Intelligence : Mastering The Art of Pricing in A Stalled Market by Suze Cumming | Real Estate Magazine