Like most answers in real estate, it depends. With pricing it depends on the market conditions:
Sellers Markets: In seller markets, you really can’t go wrong with pricing strategies- Pricing Above the market, At the market, or below the market will all work. This is the only time that pricing over market works. How much you can price over the market value depends on how fast prices are going up, 5%-10% is a realistic number to price over the last comp unless the market is going crazy (10 to 20 offers on houses) then maybe 20%. As a general rule of thumb, I try to never price higher than 10% of the market value because you usually won’t get many showings and ZERO OFFERS.
Balanced Market: In Balanced Markets, Either pricing at market or pricing below market are good strategies. Pricing Above market will result in a wasted 30 -45 days an a price reduction before being able to sell.
Buyer Markets: In Buyer Markets, the best pricing strategy can be to list below the market value. When buyers think that values are declining they are hesitant to buy (wouldn’t you feel silly buying something and it goes immediately down?). So to get buyers off the fence sometimes you need to give them a bit of deal to commit. For sellers in declining markets, you are usually best served to sell sooner rather than later, as the long market times can dramatically increase your holding cost, and if values are declining at 5 to 10% a year, you are losing about 1% per month. That may not seem like a lot but if it takes 6 to 12 months to sell that can be a serious dent in your final sale price, and you might be in the same situation you were in a year ago except now you have a lower price.