How to Respond (Calmly) When a Lower-Priced Listing Comes on the Market When You’re Selling

If you’ve ever watched The Price Is Right, you’ve seen it happen: Contestants guess the price of a blender, a vacation, or maybe even a new car. Everyone gives it their best shot to come as close as possible to the actual price…until one strategic player waits for their turn and says, “$1.”

And sometimes, it wins—not because it’s the right price, but because it’s just lower than everyone else. There’s nothing wrong with doing it. It’s totally within the rules. But it’s certainly aggravating for everyone that had to come up with a thoughtful number to be at the mercy of someone who has had the privilege of seeing what they bid.

Real estate has its own version of that moment.

Maybe you’ve done your homework. You’ve looked at the comps, talked through pricing with your agent, and listed your home at a number that feels justified and market-appropriate. And then, a new listing pops up nearby—similar home, size, condition and neighborhood… lower price. Probably not as absurd as a mere dollar, but lower enough to attract buyers and potentially steal them from you.

It’s completely normal to feel unsettled. Frustrated. Even a little blindsided.

While this can happen in even a strong sellers’ market, it’s something you may start seeing more as the market is shifting in many areas. And if it does, take a breath—this doesn’t automatically mean your pricing was wrong, or that you even have to adjust your own price.

A lower-priced listing nearby isn’t the end of the world. But it’s worth watching closely, and talking through with your agent.

Did They Just Undercut You? Maybe Not.

Unfortunately, your home doesn’t exist in a vacuum and the market can change even once you decide upon a price for your home and list it. What felt like a smart, competitive price one day can suddenly feel precarious if a new listing shows up down the block for less.

Sometimes it’s a home you were already aware of—one you used as a benchmark when working with your agent to set your own price—and then that seller drops their price unexpectedly.

Other times, it’s a brand-new listing that swoops in and surprises everyone with a price tag that undercuts yours.

While it’s likely the seller (and their agent) took your price into account when they chose theirs, it’s not always a direct reaction to your listing. In fact, their reasons might have little to do with you at all.

Here are a few possibilities:

• They’re in a rush. A seller on a tight deadline—whether due to a job relocation, divorce, or financial need—may price their home aggressively to get a fast offer.
• They’re hoping to start a war…but not with you. Some sellers intentionally list low to spark a bidding war and drive the price higher through competition.
• They’re responding to the market. Conditions change. Interest rates shift. Buyer activity ebbs and flows. A well-timed adjustment could mean they’re picking up on subtle trends you haven’t yet considered.

It Could Actually Benefit You…

Real estate isn’t priced like gas at competing stations, and one lower priced listing doesn’t instantly drag down the value of every home in the neighborhood. It may attract attention and get buyers lining up to see it and make offers, but only one of them is going to successfully buy it.

A thoughtful, up-to-date Comparative Market Analysis (CMA) should already reflect what buyers are actually willing to pay for your house, based on recent sales, not just new listings. As long as there aren’t a flood of other homes hitting the market at lower prices, your home still has a solid footing.

In fact, as long as your price is justifiable, a lower-priced listing nearby might work in your favor:

• It may actually sell for more money. If the lower-priced home triggers multiple offers and ends up above asking, it could raise the benchmark for future comps.
• It could generate more showings for your house. Even if your home is priced higher, buyers are likely to come look at yours as well at least for comparison. And if there’s a bidding war on the lower-priced house, buyers who lose out on the neighbor’s home may set their sights on your property next.
• It might make your house look like a better bang for the buck. If their home doesn’t measure up, yours may seem like a better deal by comparison, even at a higher price. Sometimes, being just a little more expensive—but clearly better—can feel like a steal.

…But Could It Affect You? Sure. Should You Panic? Nope.

Yes, a lower-priced home could impact how buyers perceive your property. It might change the dynamics slightly—more competition can do that. But it doesn’t automatically mean you’re overpriced or that you need to act fast.

The key is to stay objective. Look at the big picture.

How does the new listing truly compare to yours in terms of condition, upgrades, and appeal? Are buyers responding to it in a meaningful way, or is it just getting attention because it’s new and cheaper?

Ask your agent to help you assess whether the other listing is shifting buyer behavior or just adding some noise. It may warrant a wait-and-see approach… or it may justify a price adjustment down the line. Either way, the decision should be based on data and strategy—not emotion.

Bottom line: Don’t ignore it, but don’t let it rattle you either. The best response is thoughtful, not reactive.

The Takeaway:

If your house is on the market and a new listing comes on at a lower price, it’s certainly something you should be aware of and take into consideration. However, as long as your home is priced appropriately based upon recent sales in the area, it doesn’t mean you have to immediately drop your house to compete with them.

Stay focused on your own pricing strategy, watch how the market responds, and lean on your agent’s insight to determine if any adjustments are truly necessary. One lower-priced listing doesn’t automatically change your home’s value—it just means it’s time to keep your eyes open and your decisions grounded in data, not drama.