You have decided to list your house with an experienced realtor.  You see several other houses in the neighborhood that are for sale for $225,000.  Your realtor has shown you lots of data indicating that yes, houses in the area are listed for $225,000, however the houses that are selling are being sold for $185,000.  So of course, not wanting to lose money, you decide to list your house for $225,000 and will allow the realtor to have the listing.

A couple weeks have now gone by and nobody has seen the house.  You are thinking what is wrong with the realtor??  The realtor has asked you to reduce your price to at least $199,000 so the right buyers will find your house.  In the next three weeks, two houses in the area sell, both for less than $185,000.  You are now six weeks into having your house on the market and still nobody has come to look at your house.  You now agree to drop the price to $199,000, even though the market has dropped another 4% in the last 2 months.

This is sort of like trying to catch a ball that is rolling downhill and had a headstart.  The ball already has momentum and you are just getting started.  The long and short of it is that you are not going to catch that ball as it speeds downhill.  This is the same as trying to catch up with a declining real estate market.  Another month goes by and at last you decide to price the house just below market value, which is now at $180,000.  Within a week you get 2 offers - of $170,000 and $174,000 and reject both as too low.  Neither buyer is interested in counter offering your list price.  A few more weeks go by and no one else has offered on your home.  You fire your realtor and go looking for another agent.  All of them tell you that now your house is worth $165,000 and you are furious.  At last, you list for $159,000 just to get rid of this headache and get a full price offer in five days.  At last, success!!

The moral of this little fable is that if you price your house right at the beginning, you will very likely get an offer right away and get nearly what the list prce was.  The higher the house is priced above the market, in the end the less you will get for the house.  This is basic market economics.  When the supply of houses in a given price range exceeds the demand, the price needs to be set accordingly, that is just at or below the market value.  Setting a price far above market value will only cause the commodity, in this case a house, to become stale and ultimately unsellable.  The market sets the price, not the seller or the real estate agent.  If you don't need to sell don't.  The current real estate market is a buyer's market, especially in Florida.  Sellers must understand that the housing prices have fallen to 1999-2001 levels, as reported by the usually optimistic National Association of Realtors. 

Be smart, price your house right.  Do that, and it will sell.