In many markets, sellers will face the toughest competition not from fellow homeowners but from banks and builders. Both will be willing to cut prices dramatically to sell a foreclosed or new home.
Go to Zillow.com to see how much nearby homes fetched recently. Once you've figured out what a buyer might pay, price your house 5% below that.
Sound painful? A recent study by a New Jersey appraiser found that houses priced below market ended up selling for more than similar houses listed above market. That's because lower prices attract more buyers.