The First Price Drop: What Sellers Should Know Before Reducing Their Listing Price

Emotional attachments to our homes can be pretty strong. Maybe it served you and your family well, you put a lot of work into fixing it up, or there’s just something about it that stands out to you—something that justifies a high price. 

When it comes time to sell that house, sometimes it will sell at the initial price…but many times, it will not. According to the Federal Reserve Bank of St. Louis, almost 189,000 more U.S. sellers reduced their listing price in June of 2026 than the previous December. Even though it may not sound ideal, it’s important to remember that the initial price was just a part of an overall strategy. A price reduction is often a smart next step—and a good real estate agent knows exactly when and how to do it effectively.

Honestly, selling a house can be stressful. So it’s natural to have questions as the process unfolds. Those can range from “Why isn’t my house selling?” or “Do I really need to reduce the listing price?” The answers to these questions can be tricky. 

While sometimes a price drop makes sense, it should not be an automatic reaction to a house sitting on the market for longer than anticipated. And the best way to avoid a price drop on a house is to understand why sellers end up reducing their listing prices. Some price drops are avoidable if the seller puts in a little extra work or is a bit more realistic before the first listing goes live.

Here are the most common reasons sellers end up reducing their listing prices:

A good real estate agent will know to do comparative pricing and price the house strategically. Your agent might recommend pricing high at first in a hot market or if their trained eye perceives another beneficial reason to do so. However, some sellers want to price high for less strategic reasons. They might make the mistake of going by the listing price of nearby homes instead of the price the homes actually sold for. Sellers might also hope to maximize their profit, leave “room for negotiation,” or their personal attachment to the home might make them perceive the house as more valuable than it is to others. Whether the initial high price was part of a strategic plan or a misunderstanding about the value or market, a price drop can help garner more interest.

Even when a house has great bones, no serious problems, and is in a good location, potential buyers might have a hard time seeing past clutter, bold wall color choices, or unkempt hedges. While these are relatively easy fixes, some buyers prefer a move-in ready house…or they simply have a hard time imagining the house differently. Sellers can opt to make the changes, but if they are too busy or in a hurry to sell, a price drop may be needed instead.

Many buyers aren’t interested in having to make a lot of repairs and racking up additional costs after buying a house. Problems caused by deferred maintenance can require things like HVAC servicing or roof repairs that might be off putting to buyers. If buyers aren’t making offers because of these problems, sellers usually have to choose between doing the maintenance or repairs or reducing the price.

Sometimes inspections reveal issues that the seller didn’t even know about, like structural defects, amateur electrical work, or hidden water damage, causing buyers to back out. Sometimes negotiations can be made—usually involving price reductions—but sometimes buyers just back out, leaving the home on the market too long. This can force sellers into making a price drop on the house.

Sometimes the housing market can shift even within a short amount of time. This might be from a recent change in mortgage rates, seasonal shifts, sudden macroeconomic events, or policy changes. When a local market shifts from high demand to higher inventory, sellers often reduce prices to reignite interest and compete with similar listings.

In some cases, sellers might end up with a sudden surge of competition. This might be especially common in the spring, when many sellers are listing. Or, in areas with a lot of families, more houses might be listed right around the end of the school year. To stand out, sellers often consider a price drop.

The first couple of weeks that a house is on the market can give sellers and their real estate agents a good idea of whether the original listing price matched market expectations or not. Sometimes houses end up being overpriced because sellers might rely on home price estimators that aren’t taking all relevant factors into account, the market changes, or buyers simply want to try to get a high price for their house. Other times, the house really is worth the price, but the listing isn’t doing it justice.

Whatever the cause, something probably needs to change if your listing has the following issues:

• Too many days on market: This will depend on whether you are in a seller’s market or a buyer’s market. St. Louis is currently considered more of a seller’s market. So, if the house has been on the market for a long time—around 45 days—this is likely a sign something should change.

• Low buyer interest: Most real estate agents agree that if a listing has generated little to no interest in the form of page views or showing requests within about two weeks, a change might be in order.

• Potential buyers have had negative feedback:- Another potential issue is that people want to see the house, but when they do, certain complaints keep popping up. Potential buyers may be turned off by repairs that are needed but weren’t clear in the listing, a pervasive smell in the house, or if the listing photos make the house look a lot nicer than it does in person. 

• Poor online engagement: This goes along with low buyer interest. But if online listings aren’t even getting clicks, there’s a good chance that viewers see that price and can automatically tell that it is too much, even based on one picture of the front of the house and the location. 

Once it’s clear that your house isn’t getting enough attention to sell any time soon, your real estate agent should be considering a home price reduction strategy. This might first involve making some changes to the listing, like adding a virtual tour or updated professional photos, or staging the house better for showings. If this doesn’t work, it’s probably time to reduce the listing price.

It can be frustrating when your home is stuck on the market. It can also be overwhelming if you’re trying to buy a house at the same time, and timing is crucial. This is why it’s essential to have an experienced real estate agent by your side. A good agent can help you determine when it makes sense to price high, interpret feedback from prospective buyers, and compare nearby recent activity. They can work through your options with you realistically and help you build an effective home price reduction strategy. 

Examples of ways a real estate agent can get your home sold faster include:

• Helping you determine if it’s worth doing repairs or improvements instead of a price reduction.
• Determining the percentage of reduction that will sell your home without needing further reductions. Often, a reduction of around 2-5% is needed to increase interest.
• Doing fast comparisons with recent listings and taking any market changes into account.
• Applying years of experience and insight on home sales.
• Helping you factor in potential negotiations with buyers over maintenance or repairs.

The real estate agents at BHHS Select Properties know the real estate market and how to help sellers maximize their profit even if the first listing price was off. Find an office near you to get help figuring out the best price for your home and getting buyers in the door.