Depends on the property. And yes, I feel your pain. However, overpaying at the height of one market does not justify overpricing in another.

Based on what the market says it is worth.  What they paid for it has nothing to do with what it will sell for.  Pull good comps and prepare a good cma.

Correctly for the current market. Some agent told me yesterday when i called about a listing,  "They paid $450,000.00 for it in 2005". What someone paid 10+ years ago means nothing in the current market.

I price it to sell. If the seller disagrees, let them use someone else.

Honestly.

As others have commented I feel their pain but today's buyer is not willing to pay more than it is worth today.  

Option 1--take a loss

Option 2--continue to live there

Option 3--use it as a rental

Option 4--short sale, deed in lieu or foreclosure

Option 5--PRAY for a miracle!

I price it so it will sell, unless the seller insists on overpricing, but I will not take the listing if it is totally out of reach.

Why are they selling if it is worth half it's purchase price?  I  would encourage them to keep it, as a rental if necessary and let it pay for itself over time.  Otherwise, there are two options:  1) Lose a ton of money by presenting a check at closing  or 2) turn it back to the bank in lieu of foreclosure and mess up their credit.  

As for how to price it... the same as any other property, based on comps and market conditions.

CMA.  market price has zero to do with what they paid in 2005

Ginger,

The market determines its worth.  They need to see detailed comps.  A

You price according to the current market.  Fortunately, here in the Dallas area, home prices have been soaring.

I price a property based on recent comp sales. What the seller paid for a property does not affect current market value.

Just because they paid a lot means nothing.   How about buying a car for $50,000 and then sell it a few years later for $25,000

I have seen similar situations in our community, based on when the property was purchased and today's values.  The Seller knows what he wants, and he does not want to lose - he has done no updates - he sees (maybe not really) the comps - the reality is not pretty Ginger Harper.

Lots of research, local stats and knowing the market.

Ginger Harper Comps never lie. Not good news for the sellers.

Some times you have to encourage them to take the sour tasting medicine and sell at a loss.  Just price it accordingly to the market.

Good comps and the market will help me with listing price.

What they paid for it in 2005 has nothing to do with what it is worth today. They can pay the loss, or give it back to the bank. However, doing a short sale just because the value has dropped has never sit well with me. They agreed to buy it for the price they paid in 2005, so commit to your word and agreement. I hate when people just give it back to the bank, just because they can. Where are your morals?

I have always had good fortune in this subject. Knowing what it costs to build, sq foot for the area, tax value and comps validate my outcome

That's pretty tough but it is the reality of where things are - the price in the market as it was when they bought. Can they even manage a sale in this situation? Short sale? Is selling the right thing to do? I feel for them

How?

Community stats, market adjustment then allow the owner to place value by assessing the tangible assets of the home using the CIS Score.

Of course Z-devils number, banks number and tax appraisers number is presented with "Which one do you want to believe and where do the think the truth is?"

They tend to choose the number whose origin they understand, the CIS Score.

What they paid in 2005 is irrelevant and they know that. They just need someone to actually TELL THEM THE TRUTH. The truth could be, if you don't have money in the bank, you will not be able to sell.

take a loss or live there until the property regains equity....or lose it to the bank!!! 

Less of a pricing problem, more of a convincing problem.

Our values are increasing like crazy around here, and could be a different answer in two months. 

Ultimately the seller prices the property.  I'll present comps and suggest a list price and expected sales price as well as how long it should take to be sold.

We call that a loss don’t we?  You still need to price at market value today.  What are the comps? That is how you price it. 

Accurately based on Market Data!

Carefully.

According to the current market if you want to get it sold!

Carefully and by asking lots of questions.  Do they really want to sell?  Need to sell?  Can sell?   

Good luck.

Obviously, that's too bad, too sad for the seller. But the numbers don't lie... you have to price based on recent comparables and with an eye towards knowing it will appraise for a buyer's loan. We all know that what a seller paid for a property "whenever" has no bearing on what it's worth today.

The seller sets the price. But if you are asking how I consult to get a reasonable starting price, I educate them if needed before we discuss price. We go over what the proerty may appraise for and what comparable properties have sold for recently. If the sellers still need a reality check I ask for an appraisal. If a buyer can't get the financing the house won't sell unless you market is hot with cash buyers.

Get several opinions then find the mean.

Using valid information and other factors.

You ought to try pricing in my area. It's extremely rural and there are no similar properties. I just listed a unique stone and wood home on 78 acres with a sauna and a studio. That was tough. I was worried about under pricing it, but since it's been a month +, and we haven't had an offer, I don't think under pricing is a problem. 

2005 has bounced back in San Diego, so they need to short sale it or have the seller cover the difference with cash, wait for the market....or you walk!

CMAs