In an effort to connect some empirical data to the commonly held belief that overpricing a home will cause a drawn out sale and pricing a home at or below market value will lead to a quicker sale, Zillow tracked all homes listed on their site over the course of a year.
What they found was that homes that sold almost as soon as they hit the market had sale prices that were only about 1 percent below list price. Homes that were on the market for about two months sold at 5 percent below and homes that were listed for eleven months ended up selling at 12 percent below list price.
Homes with a sale price 10 percent below the list price were on the market for five times as long as homes that sold at the list price. But homes where the sale price was almost 10 percent above the list price spent a similar amount of time on the market as homes that sold at the list price. This shows overpricing could lead to a strong penalty but pricing a home below list may not necessarily help a home sell more quickly.
For the full analysis and interactive charts and graphs, follow the link below.