Dear Sue,
I really liked your article today. 
Over and over again, while researching the history of comparables for an appraisal, I see properties that rack up many hundreds of days on the market and end up selling for prices far less than they would have if they were priced right from the beginning.
I’ve graphed the financials of one of these properties in this graphic (see graphic). 
This is a real home in the Auburn area. Based on the eventual sales price and 1 percent depreciation in the market, this property seems to have been overpriced by more than $40,000 when it was first listed.
Over the course of four price reductions over eight months, they finally got it priced right (the December 2007 price reduction finally gets the blue line below the yellow one, and it contracted 43 days later). But the eventual sales price was about $35,000 less than the depreciation rate suggests it would have sold for in its first month on the market. 
Another way of thinking of it is this. It cost this seller $140 every day to have this property on the market at a 1 percent depreciation rate. That’s more than a lot of people’s take-home pay. I don’t think most folks can afford to play the negotiation game reader Savvy Sam was proposing in this market.
In many markets in the area depreciation rates of 2 percent and higher are commonly seen. At that rate the financial benefit seen from selling quickly and efficiently far outweighs any potential gain you might expect to see from hard-nosed pricing and negotiating that result in a longer marketing time.   
— Jared Mickel 
Dear Jared,
Thank you for such a wonderful visual!
Agents can try to explain this to their clients until they are blue in the face but when an appraiser provides such a clear picture it is hard to deny the facts.
Understanding the disastrous consequences of pricing high in a declining market is a matter of good Home $$$s and Sense!
Sue Thompson is owner and sales manager of HomeTown Realtors. She can be reached at seesue@seehometown.com.