Goldilocks found that one item was too hot, another was too cold, and one was just right.  The pricing a short sale listing needs to follow the Goldilocks principle, not too high, not too low, but just right.

If you price the house too high, you will not get showings and offers.  To get the short sale process started, you normally have to present an offer to the lender, and you need to price well to get an offer.

Why not price too low?  You want to get an offer to start the short sale process, but if the offer is outrageously low the lender will not even open a file to review it.  Also, if you do not generate an offer that is close enough to the market value for the lender to accept, you will not get the lender approval so you will not close the sale. 

What is just right?  You want to stand out below the price of the other homes for sale, because you will have to give the buyer an incentive to go through all the difficulties of a short sale. 

There is an exception to the Goldilocks rule.  If you are facing foreclosure, do whatever it takes on the price to get an offer. 

Which side to your err on?  Go toward the low side in pricing instead of the high side.  It is better to have offers to submit, and get a counter offer from the lender, then try to get the buyer to accept the lender’s counter offer than to have no offers at all. 

For a more detailed discussion on this topic, please go to http://shortsalesr.us/short-sale-dos-and-donts/do-price-the-home-like-goldilocks/.