Where is it written that you can't lose money in real estate?

I often hear sellers say that they need to net a certain amount from the sale of their property due to the balance of their mortgage, the price of their future home, or the desire to pay off debts.  Unfortunately, none of this is relevant to the price.  I've even heard this remark from AGENTS who should know better!! 

Market value is simply what someone is willing to pay.  If someone bought at the top of the market and needs to sell when there's been a downturn in the market, chances are they will not recoup all of their costs. 

Of course, no one likes bad news and sellers often go with the agent who quotes them the highest price. 

Case in point:  Almost a year ago I met with sellers who wanted to sell their house and move to a retirement community.  I told them they could expect around $315,000.  They had a well-maintained, but never updated 50-year-old ranch.  First, they listed it for close to $400k and lowered the price to $375k after four months.  I doubt that they got many showings. Next, they listed with another agent for $365k and recently lowered the price to $340k. 

No harm done?  Not so.  During this time the market has taken a significant downturn and they will now be lucky if they get $300k for their property, and will probably get less than that.

Another example:  Earlier this year, I had clients interested in a house that was listed for $290,000 down from $340k.  My clients wanted to put in an offer around $250k.  The agent told me that the owner "needed" to net a certain amount because he had paid $270,000 for it.  My clients' offer was rejected.  I noticed that it recently closed for $228k.