0 Seller's Guide: Setting Your Price

Putting a "for sale" sign in the front yard is just the beginning. Make sure you know what to expect as the sales process begins.

During this phase of the home selling process, your Realtor will help you set your list price based on:

Pricing considerations. In setting the list price for your home, you should be aware of a buyer’s frame of mind. Consider the following pricing factors:

If you set the price too high, your house won’t be picked for viewing, even though it may be much nicer than other homes on the street. But compared to other houses for sale, your home simply looks too expensive to be considered.

If you price too low, you'll short-change yourself. Your house will sell promptly, yes, but you may make less on the sale than if you had set a higher price and waited for a buyer who was willing to pay it.

Using comparable sales. No matter how attractive and polished your house, buyers will be comparing its price with everything else on the market. Your best guide is a record of what the buying public has been willing to pay in the past few months for property in your neighborhood like yours. Your Realtor can furnish data on sales figures for those "comps", and analyze them for a suggested listing price. The decision about how much to ask, though, is always yours.

Considering market conditions. When real estate is booming and prices are rising, houses may sell in a few days. Conversely, when the market slows down, average days on market can run into many months. Your Realtor can tell you whether your area is currently a buyer's market or a seller's market. In a seller's market, you can price a bit beyond what you really expect, just to see what the reaction will be. In a buyer's market, if you really need to sell promptly, offer an attractive bargain price.

Estimating net proceeds. Once you’ve been given an estimate of market value by your Realtor, you can get a rough idea of how much cash you might walk away with when the sale is completed. This can be particularly useful as you start looking for another home to buy.

Check back soon for Part 3: Staging Your Home.

-Eric