If you and your agent have overpriced, fewer agents will show your property. After all, they are Realtors, and it is their job to know local market conditions and property values. If your property is dramatically above market, why waste time? Their time is better spent showing properties that are priced realistically.
Later, when you drop your price, your property is "old news."
You will never be able to recapture that flurry of initial activity you would have had with a realistic price. Your property could take longer to sell.
Even if you do successfully sell at an above market price, your buyer will need a mortgage. The mortgage lender requires an appraisal. If comparable sales for the last six months and current market conditions do not support your sales price, the property won’t appraise. Your deal falls apart. Of course, you can always attempt to renegotiate the price, but only if the buyer is willing to listen. Your property could go "back on the market."
Once your property has fallen out of escrow or sits on the market awhile, it is harder to get a good offer. Potential buyers will think you might be getting desperate, so they will make lower offers. By overpricing your property in the beginning, you could actually end up settling for a lower price than you would have originally been offered.
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