Sellers often think their home is worth much more than the current market value. Those thoughts are sometimes based on what they feel they need to get out of the property or anecdotal evidence they see of what the neighbor’s house sold for.
A good real estate broker uses a similar method for determining the asking price as an appraiser does for determining value. They research and document similar properties (in the area, size, age, features, etc) that have sold in the last 6 months and make adjustments for dissimilarities. They also look at market trends – has the market changed from a “sellers’ market” to a “buyers’ market” – like has just happened.
I am seeing a huge amount of price reductions on the market right now. In some cases the seller just missed the sellers’ market by a few months. In other cases, the real estate agent they hired “bought the listing”. In other words, told the sellers what they wanted to hear, knowing that the home would likely not sell and that seller would be placed in a position to have to drop the price in order to get the home sold. Unfortunately, needing to drop the price once or multiple times generally nets the seller less than they would have received if they had priced the home correctly in the first place.
The take-away message if to price your home correctly and be realistic with market conditions. Looking at a neighbor’s home sale or looking at sites like Zillow and Redfin are not necessarily the best way to determine your market value. Talk to a reputable realtor with a breadth of experience.