Here ia another great article by George Smith and David Compton are the Sudden Success Team. David Compton is Vice-President and Director of Education. With 22 years as a real estate trainer/speaker, he has trained over 15,000 new real estate agents.

REASONS SELLERS OVERPRICE THEIR LISTING: The Seller's Ego: Most sellers feel that their home is unique and they often have emotional feelings that lead them to overpricing.

 Others "Gave Theirs Away": Most sellers feel that they will be able to strike a better bargain than their neighbors. This false feeling of superiority leads them, again, to overpricing.

The "Market" has No Relevance: Because they feel that their home is so unique, they believe the fluctuations in the marketplace will have no effect on the home's salability. They simply feel that their home stands above and beyond the market.

Misinformation: This is probably one of the biggest factors that leads to overpricing today. The frenetic buying that drove prices through the roof over the past several years has subsided; however, some sellers are in denial about this fact, especially when it comes to their neighborhood and their home.

Costs and Appreciation: Sellers usually overestimate the cost of additions and upgrades to their home, and their contribution to appreciation of its value. Some even make improvements that are disproportionate to the area, either in grandeur or in utility of the property. For example, a pool in an area with many retirees will often detract from, rather than add to, value. Appreciation is always relative to comparable properties in the marketplace.

Recapture of All Improvement Costs: Sellers who make improvements and enhancements to their home will want to recoup their cost of the improvements. Thus, they often inflate the costs. For instance, a full-wall built-in salt-water aquarium may not have the same appeal to the homebuyers that it had for the sellers.

Seller's Financial Needs: When a seller has priced their property based on their needs, this often will also lead to overpricing. If their needs are high, it will often lead to exorbitant overpricing. This is especially true when they are moving to an area where housing prices are much higher than the homes in their present neighborhood.

DANGERS OF OVERPRICING: Minimizes offers: An overpriced house will often discourage buyers from making offers. Buyers have more choices now and the sticker shock may cause them to look at those choices.

Declining Salesperson Enthusiasm and Response: Salespeople are much less enthusiastic about showing properties that are testing the market at too high a price. Again, they will lead their buyers to an increasing number of alternatives.

Less Qualified Buyer Exposure: Overpriced properties fail to attract qualified buyers, and often attract the "wrong" buyers.

Decline in Showings: Other agents will avoid showing overpriced properties so they can maintain credibility with their clients.

Lose Prospects From Sign Calls: Prospects who are exposed to the property from the sign will often get turned off if it is overpriced.

Limits Financing: Lenders finance a purchase based on the appraised value of the property. If the property is overpriced, the loan-to-value ratio will be lower, creating a challenge of how to handle the difference, which may cause the transaction to fall through.

Ultimately, Less for Seller: An overpriced property often remains on the market much longer. More shelf life will often decrease the value of the home, much as it does to merchandise in a retail store. The seller will still bear the cost of maintaining the home, and may become more desperate as the home fails to sell. This will often result in a lower price for the seller than if they had priced competitively at the outset.

BENEFITS OF COMPETITIVE PRICING: More Salesperson & Buyer Enthusiasm: Salespeople and buyers are often excited about competitively priced properties. There will be greater interest from more people and that may trigger competitive bidding.

Shown to Sell, NOT Just Compare: The property will be shown by other agents with the intention of buying the property, and not just comparing it with a similar home down the street that is a better deal.

Faster Sale: Competitively priced properties just sell much faster than overpriced ones. If time is a factor to sellers, which it should be, there is no refuting this fact.

Higher Price: A house that sells within the first 30 days will often bring the highest possible sales price. That amount will continue to decline as time passes.

Ability to Move to Next Home: Eight out of ten buyers sell their previous home before buying a new one. The time it takes to market a competitively priced property is shorter, which will allow them to purchase another home and move in a more reasonable amount of time.