I've had (and have) several customers who just couldn't seem to let go of the past and come to grips with the reality that we face in today's market. As a result, their homes didn't sell. In most cases, these were folks who've been in the homes for years, some for decades. Most of them had been financially conservative, so they had either paid off the mortgage or had a very small mortgage left. You would think that they would be in the perfect position to be aggressive on the pricing of the home and sell it as quickly as they desired. Most were at transitional periods in their lives - newly retired or about to retire. Most had some form of retirement income or savings, but all had counted on their homes as a part (for some a big part) of their retirement nest eggs. Now when it came time to cash in, they found themselves locked into one of the worst real estate markets in decades. And most just couldn't let go of their expectations and hopes and deal with the reality that they found themselves inhabiting.
A part of what has caused this mindset is the myth that real estate values "always go up". We've lived with that myth for as long as I can remember. It got slow sometimes, but values always went up. Well, not any more. At least not in Michigan. We've seen home values drop in Michigan anywhere from a few percent to over 20 percent in the last 18-24 months. There really hasn't been any real appreciation since the 911 terrorist attacks. Things changed forever after that date and have been flat or going downhill ever since. What didn't change, and hasn't changed yet, is the relentless march upwards of the "assessed value" of homes and the resulting taxes - an unexpected result of the Headlee Amendment in Michigan. People kept seeing the annual assessors notification that their State Equalized Value had increased again, another 5% as allowed by Headlee, so they assumed that the market value was tracking along with that increase. It was not! Realtors haven't found any value in using the SEV as a pricing guide for 2-3 years.
So, here we are in 2007 and the prices are down again. What's a seller to do? First, decide if you really want to sell. Perhaps you HAVE to sell. If the answer to either is Yes, then find a good Realtor and let them do the research on what your house is worth on the market today. Don't start out by telling them - "This is what I have to get for the house." Quite honestly, the market just doesn't care what you want or need to get from the house. There is so much choice out in the market right now that buyers have become conditioned to very quickly by-pass and ignore any homes that they feel are overpriced. You have to be competitively priced, no matter what that number turns out to be. So, once the Realtor returns with their CMA (Comparative Market Analysis) and a suggested market price - listen to them! Don't say, "I hear you, but my house is worth more than that." No, no it's not. The Realtor makes no money just listing your house. He/she only make their commissions if they can sell it. An honest Realtor will walk away from an overpriced listing, rather than waste their time and money trying to market a house that obviously won't sell at the asking price. Some Realtors will take the listing, but they've already started writing the script for the price reduction meting with you in 30-45 days.
Second, get you head around the reality that the house you paid $60-80,000 for in the 1970's is not now going to bring you that $300,000 windfall that you had hoped to realize when you sold it. If the Realtor has informed you that $250,000 is the best that you might do in the market today, then start re-aligning your plans for that number, instead of setting your jaw and insisting that you get the $300,000. The old retort, "I'll find someone else who will list it for that", is just a charade played upon oneself. Even if you do find someone to list it overpriced, that means nothing to the market and it will just sit there.
So. let go and get on with life. Stuff happens and in this case it happened to the value you hoped was in your home.