If you start out selling your home with a high sales price, then drop it later -- your house is "old news." You will notbe able to recapture that exciting activity you would have had with a realistic price. Your house could take longer to sell.
Even if you do successfully sell at an above market price to an uninformed buyer, your buyer will need a mortgage loan. The mortgage lender requires an appraisal. If comparable sales for the last six months and current market conditions do not support your sales price, the house won’t appraise. Your deal falls apart. Of course, you can always attempt to renegotiate the price, but only if the buyer is willing to listen.
Your house could go "back on the market."
Once your home has fallen out of escrow or sits on the market awhile, it is harder to get a good offer. Potential buyers will think you might be getting desperate, so they will make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received.