There's a saying that describes expired listings in the real estate business: "The second mouse gets the cheese." After a home fails to sell because the first Realtor has allowed clients to make serious mistakes, the next Realtor, if he's a good one and markets the home properly, can step in and sell it.
What kind of mistakes? One fatal mistake is pricing a property too high. Sellers would say that it's worse to price it too low, to "leave money on the table." They are mistaken. An under-valued property will usually bring in multiple offers - astute buyer's agents know the market and can smell value a block away. An over-priced property will just sit on the market until its contract with the listing agent expires.
When a seller interviews potential real estate agents, it's easy to see how they can get excited by a Realtor promising to sell the property for a lofty price. Choosing the listing agent who suggests the highest price is the worst fatal mistake a seller can make.
How much do you think your home is worth? It doesn't matter, actually. Nor does it matter what your agent thinks. The only person whose opinion matters is the buyer who makes an offer. Pricing a home is partially science - getting the comparative market data, adjusting for the differences among similar homes, tracking the changing market and taking stock of present inventory. Pricing is also part intuition on the part of the Realtor or appraiser. And in the end, the market dictates the price.
How much does that expired listing cost the seller? In real terms, all those extra mortgage payments that could have been avoided had the listing sold quickly. Add to that the intangible value of keeping the property spotless, and the hassle of dashing out during showings. It also affects the value because it's not a fresh listing anymore. It's gone stale, dated, a market-worn home that was overpriced for too long.