Pricing Your Home to Sell

Pricing a house for sale is like putting a value on an old friendship; the goal is to list it low enough that a buyer feels he has negotiated fair value, but high enough to produce your anticipated return on investment. Market conditions drive sales prices.

You should never "just pick a price" and hope for the best. Pricing a property too high actually will impede offers on a property, rather than encourage them. Based on numerous studies, while it is true that almost every buyer will initially offer less than the asking price, the majority of sales are finalized at a figure close to asking price. Ask your agent about the current ratio.

Due Diligence

If you do your homework, you can assess the likely range of property values in your area by comparing similar properties in the neighborhood. Features vary, of course, from one home to another, but appraisals depend on common features, including total square footage, construction materials, size of lot, age and condition. When you investigate comparable properties, you will have a starting point for your pricing.

Depending on how your home stacks up against other available properties, you can set a price based on your individual circumstances. If the truth hurts, you might consider making updates and improvements to bring your home up to par. If, on the other hand, your home incorporates many high-value features that others do not possess, you should be aware that you might not recoup the total cost of some items.

Wait or Reduce Price?

Studies confirm that the longer a property remains on the market, the lower the actual selling price will be. Your goal, then, is to price your home at a point that reflects its value in relation to other properties, and to leave minimal room for negotiation. In consultation with your real estate agent, develop a strategy for dealing with time on market, and for possible price reductions in order to encourage offers.

Once you have made the decision to list your home, it is only natural to hope for a quick sale. You should develop a time line as seriously as you set the price, and as realistically.