I was recently talking to a guy about listing his house.  His home was on the market for over $4 million; it was worth less than $3 million but it was a very nice house.

When I explained to him that I did not think that we could get the home sold at that price his reply was, “you only need one buyer”. 

In a fast market that may be true, but in a slow real estate market like we are experiencing today that one buyer does not exist because the one buyer is very sophisticated and he will research the market.  There is no way someone is going to pay $4.5 million for a house that is only worth $2.8 million.  The reason being is they would probably look at the other homes that are in the $3 million range and realize that these are as good or better values.

People always try to justify their high price by saying things like that they had their home professionally decorated therefore assuming that the other people did not have their homes professionally decorated. 

We always get the quality construction pitch – I had a better builder – which may be true but it depends on who is determining who the best builder is.

I was on a listing appointment and I was going over the real estate comps and the seller said that the only reason a particular house sold for $400,000 was because they did not have any ceiling fans and they had four ceiling fans.  That might be a true statement, but four ceiling fans does not make your house worth $100,000 more than a similar house on a similar lot that is similar in age. 

It is important to realize that in a slow real estate market that there is a limit to what a house would sell for and trying to ask significantly more than that is just not going to happen. 

One of my favorite Realtors used to ask how much advertising and promotion would you have to do in a slow market to sell a house for 20% more than market value.  The answer is – impossible – it cannot be done.