Yes, "going down by 1/3" would mean what you say - but they wrote "going down TO 1/3 of": "asking me to go down to 1/3rd of my price because of where I lived".

Yes, "going down by 1/3" would mean what you say - but they wrote "going down TO 1/3 of": "asking me to go down to 1/3rd of my price because of where I lived". I read "going down to 1/3" differently than "going down by 1/3". "going down to" leaves you with 1/3; "going down by" leaves you with 2/3.