I guess this begs another question immediately, i.e. "How does one know a property is overpriced?" Of course the only certain way to know is put it on the market and see if someone will pay the listing price. That almost never happens. The buyer generally pays more than or less than the asking price. The job of the Realtor is to help the owner determine a price based on location, amenties and condition...and using the sale of other properties as a guide. Even with a lot of research it is difficult to get the price exactly right. What we do know, however, is that when a house sits on the market for months, there is no buyer who is willing to pay the list price, and the process is generally painful for both the agent and the owner.
I've linked an article here which I find interesting and maybe a bit harsh, but in most ways, on the money. (I disagree with one of her conclusions that agents don't care whether the property sells or not... that's not my experience during my 27 years of this.) But it is interesting and informative reading. More at: