If you are not flexible on your price, I wouldn't stay on the market for an extended period of time. In today's market, a listing that has been on the market for several months will rarely bring in a full price offer.
Good luck with your decision and hope your house sells for the price you want in the time frame you've set.
There are three main items which effect the sale of your home: Price, Promotion, Presentation. You state that you have done all you can do to get your house ready and the feedback has been good. This tells me your home PRESENTATION is being well received. You also indicate that your agent has done a great job with PROMOTION. That leaves PRICE.
Having said that, the average Days on Market (DOM) in all four quadrants of Rochester, MN area exceeds 100 days. If you are priced toward the higher end of the comp range, you'll need the full 100-120 days to get an offer. If you are priced toward the lower end of the comp range you'll sell closer to the 90-100 days area.
Finally, listen to your agent. You may be able to take a slight loss on this home and make it up on your next purchase. If you bought in 2003 or beyond a slight loss on your sale is not uncommon right now.
Rochester MN Real Estate Agents - David and Lois Marris
You write "But don't have to sell".
First, I would be very hesitant about listing your home. If your only motivation is to upgrade because interest rates are low, why would I invest my valuable resources to market a home with a seller that will only move "if I get my price"?
Second, if you looked at your market (see link), it is pretty stable right now. That mean, in this economy, that the only way you will find buyers buying a home is if the home screams "you'd be foolish not to buy me". A home priced at market value is this economy will generally not sell because there are home priced UNDER market that buyer CAN and DO buy.
More time on market will not yield better results. As a matter of fact, if you do not receive at least 10-12 showings or one offer in the first two weeks, you are over-priced.
To answer your question more specifically, I give my sellers a price that should get their home sold within 60 days. The average time on the market is more than double that in our area, but it doesn't pay to be in the 'middle of the pack' these days! Good luck!!