Fire Sale

So you want to sell your house
A man much wiser than I (a low hurdle), one who's made millions in residential real estate over the past 35 years, told me recently that he saw a house in Florida much larger and nicer than his own, selling for 50% of its original asking price. He sold his current house by cutting 15% off what he paid for it in 2005 (and ignoring the money he'd spent on improvements) and made the deal. His thinking was that, yes, he was losing money on his sale, but was buying a much more valuable property at a bargain price, thereby more than making up what he'd "lost".

That makes sense to me, especially the part about cutting 15% off what your house was worth 3 years ago. And if you can take advantage of this market to switch to a nicer house, so much the better. Money is fungible, after all, so in evaluating your own house sale, pay attention to the other end of the transaction and see whether you net out ahead of the game.

If you're not planning on buying another house but still want to sell your existing home, that theory is still a good idea. Use a good real estate agent to provide the market value of your house - owners themselves tend to be too emotional to do this objectively - then price it at least 10%, and maybe even 15% below what houses comparable to yours are asking. You may have to cut your price still further but at least you'll get the attention of every buyer out there. Yours will sell, while your competitors's linger.