Buyers today are very savvy. They may have looked at a hundred homes online and visited dozens. Buyers know the market and the competition, or they will find out.
A high priced home can boost the home out of a buyer’s search range. For example, those looking only up to $1 million will not see a $1.1 million home, which is unfortunate, especially if that is ultimately your target price.
A high price helps sell your competition’s home to buyers, not yours. Brokers will show your property for the wrong reasons.
Lowering the sales price later on can result in a lower sales price than it could have sold for if the home was priced correctly from the start. The Seller would lose the difference on the sale in addition to any carrying costs for that period.
Overpriced homes will not appraise. If there is a loan involved, the deal will most likely fall through, unless the price is reduced to appraisal. As above, the home would have sold earlier and perhaps for more if it were priced right at the beginning.
Buyers who look at the home when it is overpriced often form a negative attitude or opinion on the property, and a price reduction will not bring them back. Brokers who get negative feedback are less likely to bring other clients.
Most of the interest in a new listing will happen within the first few weeks; overpriced homes miss the interest and excitement of a new listing.