Why Overpricing Your Home Backfires: A Simple Guide for London-Area Sellers
November 4, 2026
When you sell your home, it is natural to want the highest price possible. Your home holds years of memories, and you may have put a lot of money and care into it. So it can feel smart to start with a high price and "leave room to negotiate."
Here is the surprising part: pricing too high usually means you end up with less money, not more. It also tends to take longer, cost more along the way and add a lot of stress.
This guide explains why, in plain language, with real numbers from research and from our own market in London, Middlesex and Elgin.
How buyers shop for homes
To understand pricing, it helps to think like a buyer.
Most buyers start online. They type in a price range, such as $500,000 to $600,000, and look only at homes that fit. If your home is worth $575,000 but you list it at $625,000, many of the buyers who would love it never even see it. They are searching in a lower price range.
The buyers who do see your home are shopping at the higher price. They compare it to other homes at $625,000, and those homes often have more space, newer kitchens or bigger yards. Next to them, your home looks like a poor deal.
Think of it like a lemonade stand. If every stand on the street sells lemonade for $1 and you charge $3, people walk right past. Your lemonade might be great, but nobody stops long enough to find out.
Today's buyers are also well informed. They can see what nearby homes sold for, and they usually have a REALTOR® and a lender helping them check the numbers. An overpriced home stands out quickly, and not in a good way.
Why the first few weeks matter most
A new listing is like a new movie coming out. Everyone pays attention on opening weekend. Buyers who have been waiting get an alert on their phone, and many book a showing right away.
If your home is priced right, that first rush of buyers is your best chance at strong offers, and sometimes more than one. If it is priced too high, those buyers look, decide it is not worth the price and move on. That first wave of interest does not come back.
The research backs this up. A 2026 US study by Realtor.com, based on property records and MLS® data, found:
- Homes that sold within four weeks got about 1.8% more than homes that sold at the average of 52 days.
- Homes that sat for 18 weeks or more sold for about 1.3% less.
That is a gap of about 3% between homes that sold quickly and homes that sat. On a $600,000 home, 3% is roughly $18,000.
What happens when a home sits on the market
When a home does not sell, buyers start to notice. Every listing shows how long it has been for sale. After a few weeks, buyers begin to wonder: "What is wrong with it? Why has nobody bought it?"
Even if nothing is wrong, the home starts to look like old bread on a store shelf. People pass it by and reach for the fresh loaf.
This usually leads to a chain of events:
- The home sits. Showings slow down because the price scares buyers off.
- The price gets cut. The seller lowers the price, sometimes more than once.
- Buyers smell a deal. They see the price drops and often offer even less, because they think the seller is ready to give in.
- The home sells for less. In many cases, the final price ends up lower than what a fair starting price would have brought in.
Our local numbers show how much the market has changed. In October 2026, the typical home in the LSTAR area took 29 days to sell. In October 2021, it took just 7 days. Homes sold for an average of 96.8% of their list price, which means buyers paid about $3 less for every $100 of asking price. On a $600,000 home, that is roughly $19,000 below asking.
That 96.8% is the average for every home that sold, including the ones priced right from the start. Homes that start too high and have to cut their price often end up even further below where they began.
The other hidden costs of overpricing
A lower final price is not the only problem. Overpricing can hurt you in other ways too.
- You keep paying for the house. Every extra month on the market means another month of mortgage payments, property taxes, utilities, insurance and upkeep. If your home sits for three or four extra months, that can add up to thousands of dollars.
- Your plans get stuck. Many sellers are also buying their next home. A home that will not sell can delay a move, cause you to miss out on the next house or leave you trying to manage two properties at once.
- You help your neighbours sell. When your home is priced too high, it can make other homes nearby look like a better deal. Buyers tour yours, then buy the one down the street.
- The bank may not agree with the price. Most buyers need a mortgage, and lenders often order an appraisal to check the home's value. If the price is higher than the appraisal, the buyer may need to come up with more cash, ask for a lower price or walk away.
- It is tiring. Keeping a home spotless for showings week after week, especially with kids or pets, wears people down. Sellers who are worn out often accept a lower offer just to be done.
Why this matters even more in our market right now
In October 2021, the typical home in our area sold in just 7 days, often with many offers. Back then, even an overpriced home could still sell. Today is very different.
Here is what the London and St. Thomas Association of REALTORS® (LSTAR) reported for October 2026:
- 557 homes sold, about the same as September but 7.5% fewer than October 2025.
- 3,247 homes were for sale at the end of the month, the most for any October in at least ten years. That works out to 5.8 months of inventory. In other words, if no new homes came up for sale, it would take almost six months to sell every home already listed. In October 2021, it was less than one month.
- Only 39 homes sold for every 100 new listings. The Canadian Real Estate Association says a balanced market is between 45 and 65. Below that, buyers have the upper hand. LSTAR's chair said the market is showing "signs of a buyers' market."
- Typical home values dipped. LSTAR's benchmark price, which tracks the value of a typical home, fell to $538,000. That is 4.0% lower than September. For two-storey homes, the benchmark is 7.0% lower than in July.
- Average prices vary a lot by area. The average sale price was about $597,000 in London, $514,000 in St. Thomas, $587,000 in Central Elgin and $774,000 in Middlesex Centre.
In simple terms, buyers have lots of choice right now, and values have eased since the summer. That has a big lesson for sellers: a price based on what a neighbour got a few months ago may already be too high. Buyers can take their time, compare many homes and skip the ones that seem overpriced. Pricing it right from day one matters more today than it has in years.
A note for town and rural sellers: In smaller towns and rural parts of Middlesex and Elgin, fewer homes sell each month. That means there are fewer similar sales to compare to, so pricing takes extra care. Things like wells, septic systems, acreage and outbuildings can change a home's value a lot, and buyers will look closely at each one.
How to price your home the right way
The goal is not to pick a low price. It is to pick the right price: one that matches what buyers are actually paying today.
- Look at what has sold, not what is for sale. A list price is just a wish. A sold price is what a buyer actually paid. Recent sales of similar homes nearby are the best guide.
- Compare fairly. Size, age, condition, updates, lot size and location all matter. A home with a new roof and kitchen is worth more than the same home that needs work.
- Look at your competition. Buyers will compare your home to every other home for sale in your price range. Walk through those homes in your mind and be honest about how yours stacks up.
- Think about the price range buyers search in. Sometimes pricing at $599,900 instead of $605,000 puts your home in front of many more buyers.
- Get your home ready. Small repairs, a fresh clean and good photos help your home look its best at the right price.
- Be ready to adjust quickly. If you get very few showings in the first couple of weeks, the market is telling you something. A small change early is far better than a big cut later.
Your home is worth what a willing buyer will pay for it. A careful price brings in more buyers, more interest and often a better result.
How I can help
Pricing a home is part numbers and part judgment. It takes a close look at recent sales, your home's features and what buyers in your area are doing right now. As a licensed real estate broker serving London, Middlesex County and Elgin County, I help sellers set a price based on facts, not guesses.
When you work with me, I will:
- Prepare a detailed market analysis of recent sales and current competition near your home
- Walk through your home with you and point out what adds value and what buyers may question
- Explain the trade-offs of different pricing choices honestly, so you can decide with confidence
- Watch the response closely after listing and recommend changes early if needed
If you are thinking about selling, I would be glad to sit down with you and talk it through. There is no cost and no obligation.
Disclaimer
This article is for general information only and reflects information available on November 4, 2026. Market conditions change often, and every home and situation is different. Statistics are drawn from the sources listed below and are not a guarantee of any result. Dollar examples are simplified illustrations. Nothing in this article is legal, tax or financial advice. The Realty Firm Inc. is a real estate brokerage registered with the Real Estate Council of Ontario (RECO).
