The right price produces the best return. Too high a price is costly because it causes a property to miss its market. When a price is too high, those buyers for whom the home would be right won't see the house because it is out of their price range. Buyers who are in the price range suggested by the asking price will not see the property as a good value and will buy something else. Further, agents will be reluctant to show the property, except perhaps to make a competing property look like a good buy.
Sellers often feel that they want to test the market at a high price.
While there may seem to be no harm in starting high and lowering the price if necessary, testing the market can be risky. A property receives its fullest exposure in the first three to five weeks on the market. The best buyers for any property are those choice prospects who will see a property during those first weeks. If it does not appear to be a good value, they will decide not to buy, and it is rare that such buyers return to a property later even if the price is reduced. Thus, the person who tests the market may turn away the best of his potential market.