The Oxford English Dictionary traces the earliest known use of the term “wiggle room” back to 1941, in a Nevada newspaper called Reno Evening Gazette.
If you look around online, some sources say it was used literally to describe having a little physical space, like room for your toes to wiggle around in your shoes.
Over time it evolved to be something people used to describe having a little space to move in a budget, a deadline, or a negotiation.
How often do you actually use the term, though? Unless negotiating is part of your job, it’s probably not a term that comes up all that often. But when you do, there’s a decent chance it involves buying a car, discussing a salary, or… buying or selling a house.
Real estate agents hear it regularly. You might think they hear it mostly in the middle of a negotiation, but it often comes up long before there’s an offer to negotiate.
It’s a phrase that often comes up right around the time an agent recommends a listing price and the homeowner says something like:
“Shouldn’t we ask a little more so we have some wiggle room?”
It’s an understandable concern. Your home is probably one of your biggest assets. You don’t want to leave money on the table, and you figure buyers will want to negotiate anyway. Starting higher seems like a sensible way to protect what you actually hope to get.
The trouble is, the wiggle room you build in can leave you having to do quite a bit of wiggling just to get someone interested.
Buyers Don’t Know You’re Waiting to Wiggle
The way a lot of people think real estate negotiations play out goes something like this: The seller asks high. The buyer offers low. They go back and forth until they meet somewhere in the middle.
For instance, you’d be happy settling on a sales price of $500,000, so you figure why not ask $525,000 and let a buyer feel good about negotiating you down? Actually, let’s make it $539,000 so maybe you can get a little bit more than $500,000…
There’s just one problem with that plan. It depends on a buyer agreeing to participate.
Buyers have much easier access to listing information than they did before online home searches became commonplace. They can compare your house with others for sale, often see listing dates and price changes, and review available information about recent sales. And most buyers have an agent who is helping them understand the market on an even deeper level.
There’s a good chance they have a very solid idea of what your house is worth.
So in this scenario, let’s presume a $500,000 sales price is about how much the recent data supports. You might get a buyer who comes in with a lower offer right away to try and negotiate a deal with you. But a lot of buyers will just assume a seller who just listed at $539,000 isn’t eager to hear that they think it’s worth $500,000. (Let alone receive an offer much lower than that to give themselves wiggle room!)
So buyers wait for a price reduction. Or buy another house that’s priced more accurately at the moment.
Meanwhile, you’re waiting for someone to make an offer so you can show how reasonable you’re willing to be.
Unfortunately, buyers can’t see the reasonable price you have tucked away in your head. They see the one attached to the listing.
As time passes, you may need to lower the price just to generate interest. The longer your house sits on the market, the more buyers may start to question its value. Some may even wonder whether something is wrong with it, when overpricing was what kept it from selling.
The cushion intended to protect your proceeds can end up costing you time, carrying expenses, and potentially money on the sale.
You Choose the List Price. Buyers Let You Know if It Was a Good Choice.
Agents approach pricing disagreements differently.
Some will decline a listing if the owner insists on a price they can’t support. Others may offer little pushback. Many will explain their recommendation, respect your decision, and help you evaluate the response once the house hits the market.
Ultimately, you have the final say on the asking price. Your agent brings the market analysis and advice to help you make that decision.
But choosing a number doesn’t make buyers willing to pay it. Or even come see your house. And there’s not much your agent can do to negotiate the highest possible price for you if buyers aren’t coming to see the house, let alone make an offer.
The goal is to identify a justifiable price range based upon recent sales that also makes your house appealing compared with the alternatives currently on the market. Buyers already watching the market may be ready to act when a home fits their needs and budget… and is priced appropriately.
That doesn’t mean there’s never a strategic reason for building in some wiggle room. It really depends on the current local market conditions and your specific situation. Your agent can help you weigh those factors and decide how much room makes sense, without stretching the price beyond what buyers are likely to consider.
A little extra room in your shoes can help you move comfortably. Too much in your asking price can leave you standing around waiting.