Total Days on Market

The first part of the problem is that sellers place an emotional premium on their home that a buyer does not. Sellers have fallen in love with all the nuances of the home and tend to overlook the flaws. Buyers focus on the flaws as things they will need to fix later. 

I have literally shown home owners neighbors houses that are larger and more updated and had them look me in the eye and say, well ours is worth much more then that!

The second issue is this. Lets say your neighbor has an identical home to yours and it came on the market last year at $500K. You went to the open house and looked through and decide that it was a comparable home to yours. In most sellers minds they will mentally set the value of their home at $500K, and go about their lives. In a few months the neighbors home sells and you greet the new neighbors.    Lets say the home took 75 days to sell. Not bad in today's market. By the chart below however, the house would have sold for about 10% less then the list price. With our example that would be about $450K. Lets also assume the seller agreed to pay some of the buyer's closing costs to the tune of about $5,000. Now the house has only sold for a true net to the seller of $445. You however still have $500K on your mind. This doesn't even begin to address the emotional premium owners place on their home or depreciation in the market over the past few months. The end result? 

Big gaps between Buyers and Sellers.

Moral of the story? Price it right the first time or pay for it later.