Truth of the matter is, what the house around the corner or three doors down is currently listed for has little or no bearing on what your house is worth - period.
Mistake number 2 that sellers make is paying more attention to what other active listings are priced at rather than what the last 4-5 comparable houses actually SOLD for. Until a house sells, its nothing more than a listing and most listings are overpriced.
Are other listings in the neighborhood competition? Maybe, Maybe not. It depends on if they are price competitively. It depends on where they are located, upgrades, amenities, seller's motivation etc.... It is your Realtor's job to help you determine which houses are direct competition and which houses are not.
Prior to listing a house for sale, I make an effort to tour the closest active competition and make comparative notes. I welcome the home owner to join me in this process. No doubt, it is important to be educated about the other homes for sale in your area. (If your Realtor is not doing this, he/she is doing you a disservice as a seller). A buyer who comes into your neighborhood to view your house is most likely going to look at others of similar size and price. If they like the neighborhood, they will probably choose between 2-3 and yours better be on that list.
However, it is equally, if not more important to research and study the most recent sales in the neighborhood, paying special attention to list price to sales price ratio, days on market, levels of inventory, as well as upgrades and location of houses that are selling.
There are numerous other variables that factor into an accurate market analysis that I will no go into here. Pay more attention to Sold and you will be a happy Home Seller and not just a Listing.
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