Price reduction on your asking price should be a last resort. Imagine you are asking $390,000 for your property and your agent advises you should drop the price $10,000 to get the market interested. This means you will be selling at $380,000 but you know the buyers will try and get you down further. They will look for faults that they can use in their favour and put in an offer well below your expectation in order to cover the costs of repairs. All of a sudden the best price you are being offered is $365,000. You are now down $25,000 from your expected selling price.
Now, imagine this scenario with some changes to the story. The property has been sitting at $390,000 and instead of a price reduction, you call in a property stylist. The property is reviewed, basic changes have been put in place and you may have spent maybe a few hundred to a few thousand depending on the issues. Even if you have spent $2,000 you are still better off by $8,000 than if you had taken the price drop. Now consider that the property looks much better and the agent feels they can actually increase the asking price to reflect the changes which the market are looking for in their new homes. An asking price of $415,000 is applied and the property sells in a few days. Now, minus your investment you are $23,000 up on expectation and almost $50,000 better off than if you had gone with a price reduction.
While this example may seem idealistic, we have seen examples of where people make a commitment and invest in their property at sale time and see wonderful results in relation to the asking price and how long they are on the market for.
Either way, once you drop the asking price you cannot go back up.