5 Steps to Picking the Right Home Sales Price

Determining the right home sales price is a combination of knowing the strengths and weaknesses of your home, comparing the home to other homes for sale locally, adjusting for trends in the market and vetting your findings with professionals in the industry.

Step 1--A Realistic Appraisal

Home sellers often overestimate the positives of their property and underestimate the negatives. The first step in establishing the right home sales price is to dispassionately inventory your home’s strengths and weaknesses.

The location of the property is a prime consideration, and it is very unlikely that a home sales price that is high for the neighborhood will attract potential buyers. The condition of the property is the second component to be appraised. This includes landscape, the home exterior and the interior.

With the Internet, you can see photos showing the condition of homes in your area that have sold or are for sale. Compare your home to those. Be honest and be prepared to adjust your home sales price accordingly.

Step 2--Compare Homes Listed in the Area

Because of the Internet’s impact on residential real estate, most communities have at least one real estate company posting all homes that are listed locally with the Multiple Listing Service. This means you can see what others are asking for homes near you.

Using the inventory of strengths and weaknesses from Step 1, compare your home to others that are similar, including being in similar neighborhoods, to find a range for the right home sales price.

Step 3--Review Market Trends

A little bit of research in local newspapers and business publications can provide insight into the direction of prices in the market. If a market is strong, you can risk a higher home sales price. If a market is falling, you can set a price that will make your home stand out from the competition.

Step 4--Ask a Professional

If you are working with a real estate agent, the agent should have access to additional information on homes that sold to include the actual sales price of homes and the number of days the homes stayed on the market. This information is valuable to review and will give you an idea of the profit to be expected from a given home sales price and how long you might have to wait to close a sale.

Armed with both listing and sales prices of other homes, you can adjust your home sales price based on realistic market conditions balanced by your desired profit and desired time to closing.

If you are not working with a real estate agent, consider paying for a professional appraisal of your home, which will provide the same local sales comparisons.

Step 5--Remain Flexible

After a home sales price has been set, the job might not be done. Changes in the market can create a need to re-evaluate the home sales price that was initially set. Remain ready to reconsider your home sales price if the house does not move or offers are not meeting your expectations. 

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