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The decision to list a home is often motivated by necessity—whether due to relocation, financial reasons, or lifestyle changes. However, in today’s market, some sellers list their homes without an absolute need to sell, hoping to “test the market” and see what offers they receive. While this approach may seem harmless, it can have unintended negative consequences on both individual sellers and the market as a whole.
How Increased Inventory Weakens Demand
In real estate, supply and demand dictate market conditions. When more homes are listed, buyers gain more purchasing power by having increased options. This dynamic:
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Reduces a sense of urgency—Buyers feel less pressure to act quickly when they know there are multiple comparable homes available.
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Shifts leverage to buyers—With more listings to choose from, buyers can afford to be selective and make lower offers to test seller motivation.
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Creates longer market times—Homes without highly motivated sellers often linger on the market, making newer listings seem more attractive in comparison.
Buyers Are Testing the Market—And the Sellers
Unlike sellers, many buyers in our area are not in a “need to buy” scenario. They often approach the process with a strategy of testing seller motivation by making low or contingent-heavy offers to see how flexible a seller is. When they find a seller with a true urgency to sell, they negotiate harder and often secure a property for less than they might have in a market with tighter inventory.
The Impact on Comparable Sales (Comps)
Every home sale contributes to the comparative market analysis (CMA) used by appraisers, agents, and future sellers to determine home values. When sellers list without a genuine need to sell and eventually settle for lower offers, they inadvertently drive comparable sales prices down.
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Testing the market leads to lower-than-expected closing prices.
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Lower sales prices affect all future listings in the area.
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Appraisers use these comps, which can result in lower home valuations.
If too many sellers take this approach, it can create an artificial price suppression that impacts all homeowners looking to sell in the near future.
When Is the Right Time to Sell? ⏳
If you’re considering selling, ask yourself: âś” Do I have a real need to sell, or am I just testing the market?
âś” Would I accept a lower-than-asking offer if necessary?
âś” Am I prepared for extended market time if demand is diluted?
If selling is truly necessary, pricing strategically and working with an experienced real estate professional can help you maximize value without contributing to market dilution.
Thinking about selling? Let’s discuss whether now is the right time based on your goals and the current market. A strategic approach ensures your home is positioned for the best possible outcome!
Posted by Kevin E Yankow on
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