Imagine yourself in their shoes. If the seller were the buyer(s), they too would want to get the most property for a fair market value. If the buyer imagined themselves as the sellers, they wouldn’t want to make an offer that is below fair market value.
The changes in the market should in no way affect the seller’s (or buyer’s) opinion of fair market value. Fair market value is a finite number and what one paid for the property alone does not alter that number. Sure, well done upgraded features and amenities may. A home is worth what the closed comps show it is worth – and it is only worth what a buyer is willing to pay. Therefore, whether the owners paid a fraction of the list price and are original owners, or whether they purchased within the last decade when prices were higher, does not make a difference. Market value is market value and that is the truth.
With that said, here are the dangers of being unrealistic on market value and pricing too high: