Setting the Selling Price for Your Home

(3 of 6)

Setting the Selling Price for Your Home

Setting the selling price for your home involves knowing what it is actually worth and what comparable homes in your area are selling for. To know what it is actually worth, the home must be appraised. To know what comparable homes in your area are selling for, you need access to sales data. The recent sales prices of comparable homes are the biggest factor in setting a selling price.

Where to get selling prices

You can find sales data on your own through certain Websites that provide it, such as Zillow.com. You can input your address and receive information about what homes in your area have sold for. You can also find it through your city property tax assessor’s Website. Real estate agents also keep this information handy.

Where to find asking prices

The selling price of a home is usually not the same as its asking price. The asking price is what the seller is hoping to get; the selling price is what the seller actually got. Usually, sellers err on the high side; if they don’t sell it within a certain time period, they lower the price. Asking prices can be found on real estate Websites such as Realtor.com and Homegain.com. You can also find them in the classified ads in your newspaper or online.

Setting the price of your home requires studying prices of recently sold homes in your area, the values of existing homes, and the general trend of prices. If you set the price too high, buyers will avoid it until you drop the price. If you set it too low, you miss out on making a profit—and that profit could recoup the cost of improvements you have made on it.

Many factors go into setting the price. Among them are:

• Prices of recently sold homes in your area
• Values of existing homes in your area
• The trend of home prices in your area
• The appraised value
• The location
• The house’s amenities (new furnace, well-insulated front door, etc.)
• Upgrades
• Its general maintenance and upkeep, and condition of appliances
• Its curb appeal
• Current interest rates
• Your need for money
• The price you paid when you bought it (if it was too high, this may prompt you to increase your asking price)
• How badly you want to move

The price you set will reflect these. As a rule, the asking price is usually set a few percentage points higher than the fair market value of the home. Real estate agents are trained to help you set your price and change it, if needed, as time goes by. They are also trained to negotiate with buyers on prices. Alternatively, you can set the price yourself and change it yourself as need be.