I think we're going to see some pretty significant price reductions (unique to each area). 

. $13k is a hard pill to swallow but the sooner you can recognize what you did wrong and move on the quicker you can make some money.

I'm going to go out on a limb and guess that you may be timid at price reductions given your bigger financial circumstance.

It may be good to know this if you encounter a problem with a difference in square footage estimates to explain to the other party that it is just a difference in the way measurements are taken and could save you from a price reduction of over $7,000.   

It's common to see $80,000 price reductions to $120,000 price reductions.

The only ways I know how to safely get him cash sooner are: 1. seller rent back (we're already planning on doing this one) 2. offer to release 25k now in exchange for a 50k price reduction to justify the risk, and if he tried to breach contract or cancel the sale we could record a 50k lien on title (but that means we may have to wait decades to get our money back if he doesn't sell now) Anyone ever done this? 

Zillow also adjust prices in areas where they want to buy saw a 20% reduction in online prices just before they make offers.

The property was originally listed as 430K  and sat on the market for 35 days with a couple price reductions down to 375K.

After 60-90 days, multiple price reductions, and extra $10-12k in holding costs, house closes for lets say $419,000. 90% chance we could have gotten multiple offers and sold for around $435,000 if we listed at $425,000. 

Then invest that money wisely and grab some gains in the market, while you wait for a reduction in rates, and then buy your dream home in San Diego.