Over pricing poses risk.

Realtors often warn sellers about the danger of overpricing a property. 
In a market where prices are decling, sellers who “test the market with a high price usually end up with a lower price than those who price realistically.

Houses that are priced right are selling.  Overpricing extends days on the market and guarantees that you will sell your home for less in a declining market.
Everything’s a function of price.  With a high price, the property stays on the market as buyers ignore it in favor of lower priced competitors.  And in an environment of falling prices, a house that sells three months from now is going to command a lower price than one that sells today.

Pricing a house a little below the competition not only catches buyers interest it also reassures them they will not kick themselves later for over paying, if as expected prices drift lower in 2008.
To find that right price, real estate agents should look at recent sales of similar properties, as well as what is currently on the market nearby.  Then adjust for such factors as the amount of living space, number of bathrooms and bedrooms and the condition of the house.  And if an agent sees that prices are trending downward, he *or* she should adjust for that too.  They should aim to under price the competion.  You can’t just try for a higher price because you really want it, the way to get a higher price is to create a sense of urgency by setting a lower price.