Pricing a Listing: Under, At, or Above Market?

By Michał Babula · ~8 min read · 2026-10-02

The Pricing Conversation Nobody Likes

Every agent knows the moment. You've done the CMA, you've looked at the absorption data, and your number is $40,000 below what the seller saw on Zillow's Zestimate last Tuesday. Now you have to sit across the table from someone who has emotionally priced their home based on a number generated by an algorithm that has never been inside the property.

Pricing strategy is where agents earn their commission — not in the paperwork, not in the open house. Getting the price right at launch is the single variable that most determines whether a listing sells at full value, above it, or drags on the market until everyone's embarrassed. And yet a lot of agents still treat the pricing conversation as a negotiation with the seller rather than a presentation of evidence.

This post is about the evidence — and how to present it.

When Under-Market Actually Works

Conditions for a Bidding War

Pricing 5–10% below the comp average is a legitimate strategy, but only when a specific set of conditions is in place. Get this wrong and you've just given the buyer a discount.

The conditions that need to stack up:

• Low inventory. If absorption rate puts the market at under two months of supply, demand is outrunning stock. Buyers are already competing. A below-market price becomes a magnet, not a concession.
• High search volume in the price band. Dropping from $510,000 to $489,000 pushes you under a portal filter threshold. More buyers see it. More buyers means more offers. This is one case where portal mechanics actually work in the seller's favour.
• A property with broad appeal. Bidding wars need multiple motivated buyers. A four-bed family home in a good school catchment will attract them. A two-bed with a converted garage in a niche location probably won't generate the competing offers you need to justify the low launch price.
• Offer deadline set at launch. The strategy only works if you create the artificial scarcity deliberately. Set a review date — typically five to seven days out — and communicate it in every channel from day one.

In my experience, agents who run this well in competitive urban markets regularly see final sale prices 3–8% above the asking price. That's real money. But the strategy depends on all four conditions holding.

When Under-Market Just Loses Money

In a balanced or buyer's market — absorption rate above four months — pricing low rarely triggers a war. It just anchors the negotiation at a lower number. Buyers don't feel urgency; they feel like they've found a motivated seller. They offer below the already-low ask, and now you're negotiating from a weak position.

I've spoken to agents who tried this in slower suburban markets and ended up 12–15% below where a clean at-market price would have landed. The seller blamed the agent. The agent blamed the market. Neither was entirely wrong, but the pricing strategy made it worse.

At Market: The Highest-EV Default

If I had to pick a default position for most listings in most markets, it's at market — priced within 2% of the weighted comp average, adjusted for condition and features. From agents I've spoken to across different markets, this approach delivers the best expected outcome in roughly 70% of situations.

Here's why the math works. At-market pricing:

• Attracts buyers who have been tracking the area and recognise fair value immediately
• Minimises days on market (DOM), which matters because DOM is visible on Zillow, Rightmove, Idealista — every portal shows it, and buyers use it as a proxy for "what's wrong with this place"
• Reduces the probability of an appraisal gap killing the deal after a bidding war inflates the price beyond what a lender will support
• Gives the seller a clean story: "We priced it right, we got an offer in the first two weeks, we didn't have to chase"

The expected value argument is simple. A property priced 8% above market that eventually sells after 60 days of reductions typically nets the seller less than the same property priced correctly and sold in week two — once you account for carrying costs, price reduction psychology, and the concessions that come after a long DOM.

The Above-Market Trap and the Three-Week Cliff

Sellers want to "leave room to negotiate." It's a reasonable instinct applied to the wrong transaction type. In real estate, the negotiation happens at offer stage — and if you never get offers, there's nothing to negotiate.

The three-week threshold is real. Once a listing passes 21 days on market without an accepted offer, buyer behaviour shifts. They start asking what's wrong. They assume something isn't disclosed, the seller is difficult, or the property has a structural issue. None of those things may be true — but DOM creates the perception, and perception drives offers.

After 21 days, you typically need a price reduction of at least 3–5% just to reset buyer interest and flush the listing back to the top of portal search results. By that point, you've already absorbed the stigma. The reduction gets you views again, but the offers that come in are lower and the buyers are more aggressive on conditions.

One agent I worked with in a mid-sized Polish city (Wrocław market, not naming the agent) launched a flat at 15% above the Otodom comp average because the seller "knew what the flat was worth." After six weeks, two price drops, and one failed sale that fell through on financing, it closed at 7% below the original comp average. The seller would have been significantly better off pricing at market on day one.

Above-market pricing does occasionally work — when the property is genuinely unique, when there's no comparable, or when you have a specific buyer already in conversation. Those are real scenarios. They're also not the norm.

Reading Absorption Rate Before You Price Anything

Absorption rate tells you how many months it would take to sell all current inventory at the current pace of sales. The formula:

Absorption Rate (months) = Active Listings ÷ Monthly Sales Volume

The general framework most agents use:

• Under 2 months: Seller's market. Under-market pricing can trigger competition. At-market pricing will likely still produce strong offers quickly.
• 2–4 months: Balanced market. At-market is the strongest default. Under-market pricing rarely generates bidding wars; above-market pricing will sit.
• Over 4 months: Buyer's market. Price at or slightly below market. Condition and presentation matter more. Expect longer DOM regardless.

Pull this number for the specific property type and neighbourhood, not the city-wide average. A market can be a seller's market for three-bed semis and a buyer's market for one-bed flats simultaneously. City-level data will mislead you.

Once you have the absorption rate, you have the context for the pricing conversation. Without it, you're guessing.

The Comps Script That Gets Seller Buy-In

The goal isn't to win an argument with the seller. It's to get them to the same conclusion you've reached, through their own reasoning. Here's the structure I've seen work consistently:

Step 1: Start with the sold data, not your recommendation. Put three to five closed comps on the table — similar size, condition, location, sold within 90 days. Don't say anything. Let them look. Ask: "What do you notice about these prices?"

Most sellers will start making the comparison themselves. They'll spot the range. You haven't said a number yet.

Step 2: Walk through the adjustments together. "This one sold for €320,000 but it had a renovated kitchen. Ours doesn't, so we'd adjust down maybe €10,000–15,000 for that. This one is 20 square metres smaller, so we'd adjust up." Do this out loud, with the seller doing some of the reasoning. When they adjust the comp, they own the logic.

Step 3: Introduce the DOM data. Show them what happened to listings that priced above this range. Not as a threat — as data. "This one launched at €355,000, sat for 11 weeks, reduced twice, and closed at €308,000. The sellers wanted more and ended up with less."

Step 4: Present the absorption rate. "Right now there are about 3.2 months of supply in this area for this type of property. That means buyers have options. They're not in panic mode. If we price above market, we'll wait."

Step 5: Give them a range, not a number. "Based on all of this, the market is telling us €295,000–€310,000. I'd recommend launching at €299,000. Here's why that specific number works." Then explain the portal threshold logic if it applies.

The seller who feels like they've built the number themselves is far more likely to accept it — and far less likely to call you six weeks later blaming you for their overpriced listing.

Pricing is a conversation about evidence, not authority. Bring the evidence. Walk through it together. The right number becomes obvious.

Editorial review by Michał Babula (also the author) on 2026-10-02. In v1 of this blog, author and reviewer are the same person — I'm flagging that honestly rather than pretending otherwise.