"A home priced right is half sold."
Listing a home at too high a price is the biggest mistake home sellers make. A high price will discourage buyers from even looking at a home they might otherwise be able to afford. In addition, realistically priced homes in the same neighborhood will look better by comparison.
Of course, you don't want to set your sales price too low, either. The idea is to net the most money possible from the home sale. The price you set should reflect what other comparable homes in the area have recently sold for. It should leave some space for making concessions in order to close the deal. And it should take into consideration current trends--whether it's a buyer's or seller's market.