While there have been volumes written about pricing a seller's home and while none of the pricing tips presented in these blog posts are new or earth shattering, it is important to restate the obvious. Although real estate agents know this information intuitively, sellers don't often realize the facts and need to be informed so they don't make false assumptions and do make an informed and factual decisions.
Tip #4: The price you paid for your home does not affect its current value.
This is a hard truth for sellers to accept. In fact, some Greater Cleveland, Ohio homes are worth less, and in some communities, far less than the owner paid in the past 2-7 years. Some communities have held up better than others. Some homes may sell for more than they did a few years ago, depending on a variety of factors such as the condition of the home (which can influenced by staging, re-design and/or renovation), price, demand, utility, location and other factors.
I have sold homes, both as a buyer's and a seller's agent, for 10-20% less than the former purchase price, even homes that have been improved. Everything depends on supply vs. demand and local market conditions. If a seller is unwilling or unable to adjust to the realities of the market, they either have to:
Wait until the market meets their expectations (could be years);
Lower the price;
Make changes to the condition to warrant a higher sales price (not a given).
If you have taken out 100% financing and need to break even to close on your home, the simple fact is the home may not sell as the market may not respond to the sales price and you may not be able to write a check at closing to sell the home. This has caused many a seller to postpone moving plans, or worse yet, to negotiate with a lender to short sale their home. In a worst case scenario, the seller may walk away from the home, and the foreclosure process begins.