Overpricing vs. Underpricing: Which Strategy Works Best in Today’s Market?

When selling a home in Vancouver, Washington, or Portland, Oregon, one of the most important decisions you’ll make is setting the right price. The real estate market in the Pacific Northwest is constantly shifting, with inventory levels, seasonal trends, and buyer demand all affecting how quickly a home sells and for how much. Price your home too high, and it could linger on the market, frustrating buyers and lowering its perceived value. Price it too low, and you might leave thousands of dollars on the table.

As a local realtor, investor, and remodeler licensed in both Oregon and Washington, I’ve guided countless sellers through the complexities of today’s market. In this article, we’ll explore the pros and cons of overpricing vs. underpricing, uncover which strategy works best in today’s Vancouver and Portland markets, and provide actionable tips to help you sell your home quickly and for top dollar.

Understanding the Market: Why Pricing Matters

Before we dive into strategies, it’s essential to understand why pricing your home correctly matters more than ever. Real estate markets are fluid. What sold for top dollar six months ago might be outdated today. Buyers are savvy—they compare homes online, analyze comps, and are often aware of current trends before they even step into a showing.

Here’s the reality:

• Overpricing can make a home “stale” on the market. Days on market (DOM) climb, which can signal to buyers that something is wrong with the property.

• Underpricing can spark interest and multiple offers, but may also risk selling below market value if not carefully managed.

Inventory levels play a huge role too. In a high-inventory market, homes priced too high will get lost among similar listings. In a low-inventory market, buyers may be more willing to stretch, but pricing must still reflect reality.

Overpricing: The Aspirational Approach

Some sellers are tempted by what I call “aspirational pricing”—pricing their home above market expectations in hopes of a windfall. This strategy rarely works in today’s market, and here’s why.

Why Aspirational Pricing Fails

1. Inventory is Up
   Today’s market is seeing more inventory than in recent years, giving buyers options. When a home is priced too high, buyers simply move on to something that feels like a better value.

2. Expectations vs. Reality
   Buyers expect homes to be priced fairly relative to comps. Overpricing can create skepticism and reduce trust—not just in your home, but in the listing agent.

3. Market Shifts Quickly
   Overpricing may work in theory if the market is rapidly appreciating, but the reality is that markets can shift in as quick as 1-2 months but in 3-6 months you should expect the market to be different because of the seasons of buying through the year. If your home sits too long waiting for a “perfect” buyer, you risk having to lower the price later, often below what it should have been initially.

4. The Domino Effect
   Days on market increase, agents show the property less, and marketing efforts lose traction. The longer a home is listed, the more buyers wonder, “Why hasn’t it sold?”

The Result

While aspirational pricing might feel tempting—after all, who doesn’t want top dollar?—it’s a risky gamble. Most of my clients who tried aspirational pricing eventually had to adjust, often getting even less than they would have had they priced with the market initially. My advice: don’t do it. Correct pricing from the start is key.

Market Pricing: Hitting the Sweet Spot

Now let’s talk about market pricing, the strategy I recommend for the vast majority of sellers. Market pricing is all about understanding the current landscape and pricing your home in a realistic, competitive range.

How Market Pricing Works

1. Comparative Market Analysis (CMA)
   A CMA looks at recently sold homes similar to yours—size, condition, location, upgrades—and provides a baseline for pricing. But it’s not just about past sales. You need to consider:

   • Current active listings

   • Homes pending sale

   • Days on market for comparable homes

   • Seasonal fluctuations

2. Timing Matters
   The market isn’t static. What sold for $500,000 six months ago might now be worth $480,000—or $520,000. That’s why looking at comps from the past 1-3 months and assessing current market conditions is critical and understanding if the market is trending up, down or flat from those.

3. Seasonal Trends
   In the Pacific Northwest, for example, spring and early summer often see more activity, while fall and winter can slow down. Pricing slightly below competition during slower months can help generate buyer interest.

The Benefits of Market Pricing

• Faster Sales: Homes priced near market value typically sell faster than overpriced homes.

• Maximized Exposure: Correct pricing attracts buyers, generates traffic, and increases the likelihood of offers.

• Trust & Credibility: Buyers and agents appreciate honesty, which helps when negotiating offers.

Market pricing isn’t static; it’s an ongoing evaluation. I always tell my clients: we’re not just pricing a house; we’re pricing for the right buyer at the right time.

Underpricing: The “Deal” Strategy

Underpricing can be a strategic play to generate interest and even multiple offers, but it’s not without its challenges. Some sellers call this the “FOMO” strategy—Fear of Missing Out—but it requires trust, transparency, and expertise to pull off successfully.

How Underpricing Works

• Price your home slightly below market value—often 25,000 to 100,000 under ask depending on the home starting price.

• The goal is to create urgency among buyers, leading to competitive offers.

• This approach relies heavily on strong marketing, staging, and negotiation skills.

Considerations & Risks

1. Ethical Guidelines
   Realtors must abide by the rules of the National Association of Realtors (NAR) and state licensing regulations. Underpricing must never be misleading; the intent is not to deceive buyers but to encourage competitive bidding.

2. Special Seller Mindset
   Not every seller is comfortable with this strategy. It takes confidence and trust in the realtor to price below perceived market value and rely on offers to bring the property to its true worth.

3. Negotiation Expertise Required
   Underpricing is not just about the listing price—it’s about managing offers, timing, and contingencies. You need an agent who can navigate multiple offers, counteroffers, and appraisal issues without compromising your interests.

When Underpricing Works

• Highly Competitive Markets: In fast-moving markets with low inventory, underpricing can trigger bidding wars.

• Desire for Quick Sale: Sellers needing to relocate or close quickly may benefit.

• Unique or Highly Desirable Properties: Homes with rare features or premium locations can attract multiple buyers, pushing the final price up.

In today’s market, with inventory levels up and buyers more price-conscious than ever, market pricing is the strategy I recommend for the vast majority of sellers. It’s realistic, ethical, and maximizes both exposure and final sale price without unnecessary risk.

Real-Life Examples from the Vancouver & Portland Area

From my experience in Vancouver, WA, and Portland, OR, here’s what I’ve seen:

• Homes priced aspirationally often sit for months. Buyers browse, compare, and pass over properties with inflated expectations. By the time sellers reduce the price, the “stale listing” perception has already set in.

• Market-priced homes tend to sell in a matter of weeks, sometimes with multiple offers if priced right in a hot neighborhood.

• Underpriced properties, when handled ethically and strategically, can generate competitive bidding—especially for homes in sought-after areas like Felida, Salmon Creek or Fishers Landing Vancouver, Camas or close-in Portland neighborhoods.

One client had a beautiful mid-century home in a desirable SW Vancouver neighborhood. We priced it slightly below comps to spark interest. Within 10 days, we had three strong offers and sold $30,000 above what market comps suggested—because we created the right environment for competition, not desperation.

Practical Tips for Sellers

1. Trust Your Realtor
   Your agent has access to the latest market data, trends, and buyer behavior. Their insight is invaluable for making informed pricing decisions.

2. Know Your Market Seasonality
   Certain times of the year are more competitive. Spring and early summer often bring more buyers. Price strategically to attract attention when buyer activity is slower.

3. Don’t Rely on “Feelings”
   Pricing based on emotion—what you think your home is worth—can backfire. Trust comps, market trends, and professional guidance.

4. Be Ready to Adjust
   Market conditions change. If your home isn’t getting traction, reassess your strategy quickly. Minor adjustments early can prevent prolonged time on market.

5. Transparency and Ethics Matter
   Always follow ethical guidelines. Whether pricing below market or in the competitive range, honesty builds trust, preserves reputation, and ensures smooth transactions.

What This Means for 2025

Looking ahead, the market will continue to fluctuate. Here’s my recommendation for sellers as we approach the end of 2025:

• Inventory Considerations: Expect moderate inventory levels, which means competition among sellers will be noticeable.

• Pricing Strategy: Stick with market pricing as your default. Only consider underpricing in very competitive or unique scenarios. Avoid aspirational pricing—it’s a losing game.

• Seasons Matter: Remember the seasonal patterns for SW Washington and Portland—spring through early summer is your best window for strong buyer interest.

By approaching pricing strategically, ethically, and with market insight, sellers can maximize both the sale price and the speed of sale.

Final Thoughts on Overpricing vs. Underpricing

Overpricing, underpricing, or hitting the market-perfect price? The answer isn’t one-size-fits-all, but in today’s environment:

• Avoid aspirational pricing—it rarely works and can hurt your sale.

• Focus on market pricing—this balances realistic value with buyer interest and is the safest strategy.

• Use underpricing strategically—only for specific circumstances, and always with a skilled realtor at your side.

Pricing a home isn’t about luck—it’s about data, strategy, and execution. With the right approach, you can sell quickly, confidently, and for a price that reflects the true value of your property.

If you’re thinking about selling your home or want a quick, professional assessment of your property’s value, don’t wait—reach out today. I can provide a personalized pricing strategy, market insights, and guidance to help you sell fast and for the right price. Whether you’re ready to list now or just exploring your options, I’m here to help every step of the way.

📞 Call or text me today at (503) 884-2387 or send a message through my website. Let’s get started on your next move!