An overpriced house discourages prospective buyers from making offers since the difference between the asking price and market price becomes substantial.
Agents lose interest in property that is overpriced.
They do not spend as much time in moving the house as they would if it were priced right. Agents avoid showing overpriced houses in order not to lose credibility with buyers. Prospects who learn about the house from the sign get turned off if it is overpriced. They do not pursue the matter to see the house. Financial institutions and mortgage companies finance only a percentage of the real value of the house.